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Paradise Papers: Dear Tim Cook

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Re: Paradise Papers: Dear Tim Cook

#211

Post by soVeryTired »

dbatten wrote: post #162
bauerd wrote: post #20

Earlier quoted context omitted.

I'm not sure what your argument is. Is it (a) that tax avoidance is morally justified, (b) morally justified only in the business context or (c) not of concern, because the business and the moral are two separate contexts?

I think the argument is stronger than that. It's not that tax avoidance is morally justified, it's that corporations have a fiduciary responsibility as stewards of their shareholders' investment to maximize the return on that investment (within the bounds of what the law allows). That includes reducing costs and, yes, that includes reducing tax burden. Tax avoidance within the bounds of the law is not just morally ju…

You can't equate a fiduciary duty with a moral obligation. It is legal for a firm to outsource manufacturing to a sweatshop in a country with lax child labour laws, but I don't think many people would argue that it's moral to do so.

The law is not the arbiter of morality.

But I do agree that the solution is to fix the tax code. And to implement better international tax treaties.

Re: Paradise Papers: Dear Tim Cook

#212

Post by schalab »

sfifs wrote: post #115
nickpp wrote: post #99

Earlier quoted context omitted.

By default, big companies always get preferential treatment from governments. Open a mega-factory? They get tax cuts, cheap real estate, free utilities. Why? Those shiny new jobs look great on a politician's resume for the next election... What does the little business guy get? A letter of "don't forget to pay your taxes in full or else" It's time to accept the fact that governments are NOT a fair and impartial warde…

Those with wealth will always try to capture the system - whether its formal or informal. The natural state of any business is to try and become a monopoly because that maximizes rent taking ability - NOT competition. Practically the ONLY power able to stop monopolies from forming is the government. In absence of the government's ability to "meddle", businesses can and will cut deals with big competitors and squelch…

There used to be a lot of natural factors which worked against monopolies.

Every new market you introduced your product in brought along with it a layer of bureaucracy and middle management, which left you more bloated and unwieldy.

This allowed smaller,local companies to have an agility and responsiveness advantage even if they offered the same service at a higher fee.

Computers and the internet have made the process of expanding a lot smoother with instant inventory management, communication etc.

Not sure what government can do to stop this. The more power you give to the government, the more lobbyists and corruption it will result in. And even if they do manage to sign some legislation, there will be workarounds and loopholes.

I am struggling to even think of rules that would efficiently limit the growth of Amazon,Google etc. Cap their market share somehow? Tax companies which have more than x% of market share at an exorbitant rate?

Re: Paradise Papers: Dear Tim Cook

#213

Post by yardie »

bmomb wrote: post #108
sschueller wrote: post #86

Earlier quoted context omitted.

Same goes for US individuals living abroad not having any business relations or even holdings in the US. Yet they are required to file and pay US taxes in addition to local taxes.

But as an US citizen you still use some US benefits like the army and international protection, right? (I'm not from USA or currently living abroad but i think that is "fair")

Tell that to the US citizens and NGO workers in Yemen. You think the US military or State department did anything for them? [0]

British, Dutch, and German citizens were evacuated by their governments.

[0] https://travel.state.gov/content/travel/en/YemenCrisis.html

Re: Paradise Papers: Dear Tim Cook

#214

Post by bryananderson »

It is so, so important to our social contract that everyone plays by the same set of rules.

Right now, I think that a lot of people (such as small business owners who will never employ an army of offshore tax lawyers) are realizing that this is not the case.

Hopefully this disillusionment will be a vehicle for positive change, but the past and present provide abundant evidence that there are tyrants and charlatans aplenty waiting to capture the popular anger and turn it to their own purposes.

It is in all of our interests - from the richest to the poorest - to keep this from happening.

We need to return to the lesson of the Progressive Era. There is an alternative to chaos, and it is to build a society in which the average person can justifiably say that the system works for them, too, and not only for the wealthiest.

Re: Paradise Papers: Dear Tim Cook

#215

Post by chestervonwinch »

fsloth wrote: post #157
nickpp wrote: post #99

Earlier quoted context omitted.

By default, big companies always get preferential treatment from governments. Open a mega-factory? They get tax cuts, cheap real estate, free utilities. Why? Those shiny new jobs look great on a politician's resume for the next election... What does the little business guy get? A letter of "don't forget to pay your taxes in full or else" It's time to accept the fact that governments are NOT a fair and impartial warde…

The charitable interpretation is that large companies create demand for services in the community where they are located, thus functioning as an economic stimulus. The demand may entice smaller companies to co-locate in the same neighborhood. With this interpretation it would make sense to entice large corporate entities to arrive and/or stay put. Of course, the path from economically motivated kick backs to pure cro…

There is an amount that the gov loses by allowing tax breaks and other perks to such businesses. Is this amount recovered (by some measure) through the assumed economic stimulus?

I'm certain that someone has looked at these numbers in case studies, but I don't have the time to wade through literature currently.

Re: Paradise Papers: Dear Tim Cook

#216

Post by eru »

yardie wrote: post #200
eru wrote: post #167

Earlier quoted context omitted.

A flat tax on income would help, but it's still a tax on income, and so you can move that around with clever transfer pricing etc. Land value tax works even better: it's physically impossible to move or hide land.

Somehow I doubt the person making $20k/year paying the government 20% would see it the same way as the person making $100k/year.

What do you mean?

A few points, but I am not sure which one you are referring to:

- interesting enough actual taxation in the US seems to be mostly flat in practice (after a certain threshold): rich people get more deductions and can hire lawyers to use all the loopholes

- you can have a mostly fixed marginal rate of taxation on income, but still have progression in average rates. Eg give everyone $10k/year as an allowance, and tax at a fixed 20%.

- for taxes on income there's a trade-off between equality, ability to pay, but also blunting incentives and raising revenue. Luckily, if you tax land value instead, you can tax away essentially the whole of land rent without blunting any incentives to work or invest. (So the whole conundrum about the right way to tax income can be mostly side-stepped.)

I'm about to move to Singapore. They have a progressive income tax system with almost no deductions, but the maximum marginal rate is 22%. (VAT is 7%.) Since there system is so simple and rates are low, it's usually easier to just pay instead of trying to find loopholes.

Re: Paradise Papers: Dear Tim Cook

#217

Post by yardie »

onan_barbarian wrote: post #130
bmomb wrote: post #108

Earlier quoted context omitted.

But as an US citizen you still use some US benefits like the army and international protection, right? (I'm not from USA or currently living abroad but i think that is "fair")

This is incredibly stupid. A US citizen abroad gets very little additional protection from the "army and international protection" that the other citizens of the country in which they are generally resident get; i.e. a US citizen in Germany or Japan gets a lot and a US citizen resident in, say, China or Indonesia gets nothing. This is one of the dumbest arguments I have ever heard for this kind of wacky double taxati…

This and "US healthcare subsidizes cheap healthcare for the rest of the world" are 2 of the stupidest, jingoistic statements that people make for paying too much for so little.

Re: Paradise Papers: Dear Tim Cook

#218

Post by fastball »

tankenmate wrote: post #102
fastball wrote: post #69

Earlier quoted context omitted.

My point is that this isn't about morality. Taxes are not a moral problem. Tax evasion is a moral problem because breaking the law is a moral problem. I don't think forcing people to pay any amount of money (taxes) is moral. Is it good for society? Yes. Is it moral? Who knows? How are you so easily making moral judgements when morality is so subjective? I find the idea of forcing my morality on anyone else repugnant,…

I'll quote the first sentence from your post, "I think tax avoidance is morally justified." But more broadly, laws are not always moral. If you equate laws with being moral (or equitable which is hopefully a subjunct matter), then personally I think your view of the world is far more black and white than reality. In my view morality (and part of which is equality) should lead to legality not the other way around.

I don't think laws are moral. I think that, in a functioning democracy, laws are dictated by whatever views are currently held to be moral by the largest portion of participants in the democracy. Laws are what the largest proportion of people in a pure democracy have agreed is moral. If you think laws are consistently being put into place that don't reflect the morality of the populace, then you have an issue with your democracy, and that needs to be sorted out first.

I personally do not believe in objective morality. I'm not religious and without believing in a prime mover I think that's a very hard claim to make.

Re: Paradise Papers: Dear Tim Cook

#219

Post by repomies691 »

loceng wrote: post #188
styx31 wrote: post #80

What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate. But there are these big companies which can afford to create offshore companies/holding just to evade some tax system, and lower their tax rate. So, what? The tax rate of a country is now "artificial", because it will never be applied to all revenues from all companies, because th…

These companies evading taxes are responsible for increased hardship and suffering of a society as well, leeching off of the nations they exist in, and being able to outcompete the honest organizations and people in them. The damages are far greater than the tax avoided. "They are doing it too" isn't a valid excuse either.

So... Basically Apple is increasing the suffering by creating all those laptops and iphones? That is very difficult for me to grasp. Apple creates computers and phones which make peoples lives a lot better, and people are willing to pay for those. Why is the suffering increasing? I guess world would be a better place if apple would pay more taxes, but I'm pretty sure that world would be worse place without Apple, whether it pays taxes or not.

Re: Paradise Papers: Dear Tim Cook

#220

Post by whym »

crummy wrote: post #21
wjnc wrote: post #8

Dear Herr Krach, thank you for your letter. I think you misunderstand how business works. Apple is a profit seeking corporation. Profits we make, we hope to distribute to our shareholders. Paying taxes is an obligation with which we comply, both to the letter and in spirit. We meet such obligations, but not nilly-willy. Our shareholders would not look kindly upon executives who pay more taxes than necessary. Avoidanc…

Tim Cook doesn't always act at the whim of his shareholders, though: http://articles.latimes.com/2014/mar/01/business/la-fi-tn-ap... > Danhof had spoken earlier in the meeting, criticizing Apple's connection to trade industry groups that believe people are causing global warming. Later, Danhof asked Cook if he would promise to commit to projects that help the environment or fulfill other social justice aims only if t…

Not all the shareholders oppose it. The image of the company "doing the right thing" would be favorable to its shareholders.

In fact, the same article suggests that apparently many of them agree with Cook:

> "If that's a hard line for you," Cook continued, "then you should get out of the stock."

> As Danhof sat back down, the audience applauded.

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