Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How Apple Sidesteps Billions in Taxes

nytimes.com

Post reply on HN
Print view View original

171–180 of 215 posts

Re: How Apple Sidesteps Billions in Taxes

#171

Post by hej »

bmelton wrote: post #48
hej wrote: post #38

Earlier quoted context omitted.

> Playing within the rules created by society is not morally wrong. There are people who honestly believe that? It’s not that simple, it really isn’t. I, for example, think there are many immoral but legal things and I want it to stay that way. The law is not supposed to perfectly mirror our morality, that would be a clusterfuck, tyranny, and otherwise a really bad idea. (For example: I think not tipping in the resta…

The best way I can visualize it is like playing a game of poker. Bluffing is misrepresenting what you have to fool your opponent into something you don't, or more commonly, something better than you actually have. There are a variety of ways to bluff, with either betting patterns or by outright lying verbally. There are different rules in different casinos that determine whether or not you're allowed to talk about yo…

That was a nice explanation of why what’s moral doesn’t map to what's legal. I’m not sure what your point is, though.

Re: How Apple Sidesteps Billions in Taxes

#172

Post by hej »

philwelch wrote: post #62
hej wrote: post #38

Earlier quoted context omitted.

> Playing within the rules created by society is not morally wrong. There are people who honestly believe that? It’s not that simple, it really isn’t. I, for example, think there are many immoral but legal things and I want it to stay that way. The law is not supposed to perfectly mirror our morality, that would be a clusterfuck, tyranny, and otherwise a really bad idea. (For example: I think not tipping in the resta…

Taxes are purely a construct of law though. The only reason it's immoral not to pay taxes is because it's immoral to break the law, at least if the law is just. But we're not talking about people breaking the law, we're talking about people obeying the law. Think of it this way: if you can get an effective tax rate of x% by doing this and y% by doing that, and x other laws that allow you to effectively lower your eff…

No, it’s not necessarily immoral to break the law. There is it again, the error to try and map morality to laws perfectly.

Whether or not not paying taxes is immoral (by abusing obvious loopholes) is different from the law.

Re: How Apple Sidesteps Billions in Taxes

#173

Post by yequalsx »

yummyfajitas wrote: post #133
yequalsx wrote: post #104

Earlier quoted context omitted.

I fully agree that the losses from the War on Iraqis/SS/medicare/etc don't outweigh the profits made by taxing Apple/etc and providing them with a few cheap services (corporate registration, enforcement of contracts, etc). That's a separate issue. Ironic that you mention SS and Medicare. Two programs designed to help companies out (and people too). Do the cheap services include a road system? Do they include an educa…

The cheap services do indeed include a road system, which tends to be paid for by property taxes in a given locality. Apple pays for CA roads in proportion to the land they own in CA. Their works also pay for roads via gas taxes, and charge Apple commensurately. Why should Apple be taxed on profits earned in Ireland to pay for CA roads? As for protection from enemies, we should simply stop defending Ireland. Then Ire…

The first part of the article was about Apple avoiding California taxes by having a small office in Reno. You haven't shown that Apple pays its fair share of California's road system (don't ignore the federal road system), schools, sewers, police protection, or its use of American soft power for its purposes overseas.

But supposing Apple does pay it's share of all these things. Given our current deficit and that a large portion of our deficit goes toward maintenance of both soft and hard power and that such power is used for the benefit (not solely) of large corporations its clear that business are not paying their share of the burden. And a large portion of the current deficit comes from stabilizing the economy. Without infusions of cash into the system after Lehman went bankrupt Apple would have been greatly disrupted.

Corporations in the U.S. currently sit on a great hoard of cash. I don't know another hoard of cash government can access to pay for the maintenance of the system. From you last paragraph it seems it would be advisable for you to read the Wikileaks cables. Your view about the role of military power and its relationship with soft power the use of said power for the benefit of corporate interests appears to naive.

In an environment where public policy has been co-opted by corporate interests to serve business interests to the detriment of other interests it's hardly reasonable to think that "we should simply stop defending Ireland". Why would businesses want such a thing when they benefit from our power without having to pay for it?

Re: How Apple Sidesteps Billions in Taxes

#174

Post by FireBeyond »

yummyfajitas wrote: post #94
jarek wrote: post #76

Earlier quoted context omitted.

Wall Street does care about there the money is. That is why tech companies have spent huge sums lobbying for a repatriation amnesty.

Tech companies want repatriation amnesty so they can invest the money in the US. I have no idea why we want to prevent them from doing this.

So they can invest -some- of the money in the US.

And pay salaries, bonuses and dividends with the rest - without paying the appropriate corporate income tax rate first. That's why.

Re: How Apple Sidesteps Billions in Taxes

#175

Post by robatsu »

forrestthewoods wrote: post #34
jacquesm wrote: post #30

Earlier quoted context omitted.

Of course it is an issue of morality. I could choose to avoid paying taxes in the society that I'm a part of. It would be in my economic interest to do so. But it is morally wrong because it is that same society that enables me to make my money in the first place. Simple, right?

That doesn't make any sense at all. Tax avoidance is perfectly legal. Tax evasion is not. Playing within the rules created by society is not morally wrong. Every deduction you take on your personal income taxes falls under tax avoidance which you can't possibly be describing as morally wrong. "The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by mea…

I agree with the SCOTUS sentiment, but in other related areas, strict adherence to the law with the underlying intent to remain legal but avoid the spirit of the law has been cracked down upon.

In the case of cash transactions, with the 10k reporting limits, people are now routinely prosecuted for "structuring" their >10k transactions into a series of For my part, I'm on the side of the tax avoiders & believers in privacy, but it wouldn't surprise me to see the government's views/regulations on tax avoidance come around to their current policies on currency controls.

Re: How Apple Sidesteps Billions in Taxes

#176

Post by jandrewrogers »

Drbble wrote: post #116
jandrewrogers wrote: post #31

Earlier quoted context omitted.

Short-term capital gains are already taxed at income rates. Long-term capital gains are lower in part because they are not inflation protected, which can substantially discount the real returns. Having a lower tax rate is simpler than computing inflation-adjusted returns for every long-term transaction. For example, if you buy an asset for $500k and sell it for $600k ten years later, you actually lost money after adj…

That's silly. The government does lots of inflation adjustments andbracketing and phaseouts in financial programs already. And "long term" starts at two years, where inflation is just barely relevant.

That is factually incorrect. In US dollars, investments lose 2-3% of their value annually due to inflation, compounded for multi-year investments. In most cases, there are no adjustments for that in the US tax code. For long term investments this has a large, material impact on the expected return on investment. Any accountant worth a damn can figure this out for you and anyone investing takes it into consideration. This includes investors in startups.

Investing in startups returns a couple points over investing in boring things like corporate debt and startups have higher risk. Unless you think more social good comes from investment in corporate debt than startups, it would be foolish to incentivize everyone to ignore startups because the risk adjusted returns are better elsewhere. I accept that some people think investing in startups is a waste of money but I would prefer that our tax code does not force that to be the case.

Re: How Apple Sidesteps Billions in Taxes

#177

Post by jandrewrogers »

jusben1369 wrote: post #115
jandrewrogers wrote: post #31

Earlier quoted context omitted.

Short-term capital gains are already taxed at income rates. Long-term capital gains are lower in part because they are not inflation protected, which can substantially discount the real returns. Having a lower tax rate is simpler than computing inflation-adjusted returns for every long-term transaction. For example, if you buy an asset for $500k and sell it for $600k ten years later, you actually lost money after adj…

That's really not the reason short term and long term are taxed differently. It's based on a perceived notion that we want to reward long term investment as a preferable activity over shorter term speculation.

I agree, this is partly the case. There are a number of incentives in the capital gains tax code beyond the well-known ones that are structured very much for the benefit of long-term investments in smaller companies. There is no rational tax basis for this benefit except to benefit small companies.

The argument about inflation adjusted returns is really the baseline case. Most investors account for it. However, they also adjust for risk as well. I would prefer investments in tech startups to be attractive, net, after accounting for the tax code relative to boring investments like debt instruments.

Re: How Apple Sidesteps Billions in Taxes

#178

Post by AlisdairO »

philwelch wrote: post #90
AlisdairO wrote: post #81

Earlier quoted context omitted.

> The only reason it's immoral not to pay taxes is because it's immoral to break the law, at least if the law is just Surely it's also immoral because it's moral to contribute to the society you benefit from, particularly when the laws are constructed to attempt to make you do so, even when there are loopholes?

If it had to do with contributing to the society around you, surely it would be the same obligation regardless of the tax laws, wouldn't it? Yet no one voluntarily pays more than the tax rate, and nearly everyone takes all the deductions and tax credits they can.

Right - the difference between the two is that deductions and tax credits are explicitly entered into the law to define what someone should be paying. The corporate tax rates that Apple pays in California are instead a reflection of the law's inability to effectively extract the money that society wants to - loopholes are involuntarily, while tax deductions are intended.

Re: How Apple Sidesteps Billions in Taxes

#179

Post by jarek »

el_presidente wrote: post #148
byrneseyeview wrote: post #124

Earlier quoted context omitted.

The maneuver you describe is equivalent to incorporating in Delaware (or Nevada, I suppose). You can compound your wealth in the low-tax environment, but you will pay taxes when you try to transfer it to yourself. Just like Apple, in this case. Under the current legal regime, they have successfully deferred taxes, not evaded them. It's the same way I carefully evade sales taxes by saving some of my money instead of s…

How much of your paycheck do you save? Apple can afford to wait until the government passes a Homeland Investment Act type law to avoid paying those taxes. OTOH, most people need to pay for things like food, clothes, whatever they're using to post comments on websites, etc.

This is a bad analogy to start with, but Apple's profit is around 24% of their revenue, which would be comparable to saving 24% of your paycheque, which is not at all unreasonable.

Re: How Apple Sidesteps Billions in Taxes

#180

Post by DavidAbrams »

California rips companies off and begs for this kind of behavior.

Ask anyone who has started a small business in California. For example, your business can make zero dollars (or even lose money), and you will still owe California $800. EVERY YEAR.

Fuck you, California.

Post reply on HN