Paradise Papers: Dear Tim Cook • Hacker News Board

Re: Paradise Papers: Dear Tim Cook

#261

Post by DanielBMarkham » Wed, Nov 08, 2017, 1:19 PM UTC

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…

This is the problem with a complex and byzantine tax code: entities that can manage and manipulate the complexity profit by it. Entities that don't have those kinds of resources are stuck.

It would be good if folks from all political walks of life could come together for some kind of tax simplification. I highly doubt this will ever happen, though, as tax law is used as just another club by big businesses to beat down the small. They have the money, and they're willing to pay-off the political class to make various arguments about how simplifying things would be bad for the little guys. That's not changing. (This has nothing to do with current politics, by the way. I am not following the U.S. tax discussion and it's not relevant to my point. My point is that whether it's business, tech, or government, complexity itself is an enemy)

Re: Paradise Papers: Dear Tim Cook

#262

Post by mrob » Wed, Nov 08, 2017, 1:20 PM UTC

_acme wrote: post #153

styx31 wrote: post #137

Earlier quoted context omitted.

All companies are supposed to be equals regarding taxes. If a part of them can trick this rule, then it is not fair and must be fixed. I agree that there is a part of entrepreneurship which include being able to understand the rules and laws and use them efficiently, but all these familiarities used to game the system are only valid if only a minority of the people use them. One people finding this trick is ok, but b…

All companies are supposedly equal in doing business, but some manage to compete better than others. Taxes are just another area of competition.

Competition in business is beneficial to society as a whole, by providing better products and services. Competition in tax avoidance has no plausible benefit. It's spending resources to solve an entirely artificial problem. If the problem was removed then the resources could instead be spent on something useful to everybody.

Re: Paradise Papers: Dear Tim Cook

#263

Post by dontreact » Wed, Nov 08, 2017, 1:20 PM UTC

Maarten88 wrote: post #242

dontreact wrote: post #171

Earlier quoted context omitted.

Another reason would be that it could be argued that this unfair if they are selling products with very different margins in different countries.

That is what they argue now, they argue their margin in EU is almost zero. But because they transfer costs internally in any way they like (abusing the IP laws that they need to do business in the first place), they can make the profit appear in any country they want. If countries want to stop missing out on these taxes, I think they should just stop accepting the whole argument. If companies really accept lower marg…

Does this work for non-tech companies or other companies who really do have different margins in different countries? How do you decide who to enforce it for?

Re: Paradise Papers: Dear Tim Cook

#264

Post by kogepathic » Wed, Nov 08, 2017, 1:21 PM UTC

CamTin wrote: post #140

earthtolazlo wrote: post #111

Earlier quoted context omitted.

You are welcome to give up your American citizenship if that income tax becomes too burdensome for you.

There are actually things like the expatriation tax and "name and shame" provisions which discourage people from renouncing for tax purposes. Also (note that I am not an accountant or lawyer and this is not advice), most ordinary people won't see any problem with taxation while abroad beyond the actual inconvenience of filing a 1040 because the foreign earned income exclusion ( https://www.irs.gov/individuals/interna…

> most ordinary people won't see any problem with taxation while abroad beyond the actual inconvenience of filing a 1040 because the foreign earned income exclusion

Well that and most banks refusing American customers because they don't want to deal with FBAR/FINCEN reporting.

My American friends here in Europe have a really difficult time opening a bank account due to this rule.

Re: Paradise Papers: Dear Tim Cook

#265

Post by [deleted] » Wed, Nov 08, 2017, 1:23 PM UTC

[deleted]

Re: Paradise Papers: Dear Tim Cook

#266

Post by nickpp » Wed, Nov 08, 2017, 1:23 PM UTC

schalab wrote: post #212

sfifs wrote: post #115

Earlier quoted context omitted.

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 proces…

You raise some good points. But I strongly believe in the innovative solutions brought forth by the free markets. It's not called "the invisible hand" for nothing.

I am old enough to remember when whole IT industry used to be in the shadow of Microsoft (and IBM before that). Nobody could see a solution out of it! The government even tried to fix the problem and failed.

Ten years later, Microsoft is becoming a nice player in the industry, not even mentioned when in "largest sharks in IT" lists. The invisible hand of the free market at work...

Re: Paradise Papers: Dear Tim Cook

#267

Post by Cakez0r » Wed, Nov 08, 2017, 1:23 PM UTC

Swinx43 wrote: post #131

patrickaljord wrote: post #96

Earlier quoted context omitted.

Apple do pay their taxes just like you for everything they sell in the US. It's what they sell outside of the US that they don't pay, but they do pay in those other countries. The biggest unfair advantage they have against you is if you sell to overseas markets (you're paying US tax, not them) but if your market is US only then Apple isn't paying less than you are.

While I appreciate the sentiment it is time to start taking a more global look at these antics of companies. I run my own company in the UK and I know for a fact that apple makes a massive amount of money selling in this country. Now as a small business owner I am taxed at 20% on corporate profit. (19% going forward now due to a tax cut in corporate rates introduced during the last financial year). You then also get…

That's an interesting case to bring up. In the UK, it is very common (I'd go as far as to say it's the norm) for software contractors to start a single-person limited company and pay themselves through a mixture of salary and dividend in order to optimise their taxes. I wonder how many of these people consider that they are committing "tax avoidance" and "exploiting legal loopholes" too.

Re: Paradise Papers: Dear Tim Cook

#268

Post by cm2187 » Wed, Nov 08, 2017, 1:23 PM UTC

dontreact wrote: post #258

cm2187 wrote: post #233

Earlier quoted context omitted.

If you don't have control over foreign loopholes, you eliminate them by applying to companies what you apply to individuals in the US. I.e. that US companies may not pay less taxes than they would pay if their activity was all in the US. It would of course increase the effective tax rate in for US large companies a lot, but the US corporate tax rate is very high vs other countries. If it becomes efficient you can aff…

I don't think getting rid of these foreign loopholes is as simple as you think it is. 1. What counts as a "US Company"? 2. So you're proposing that Apple pay the U.S. taxes on sales in Germany? Also that every country should do this?

1. Companies which parent owner is based in the US. Companies are already paying taxes based on consolidated regime, it is just that they consolidate all entities within a tax jurisdiction. So the concept exists, it could just be extended.

2. You wouldn't have a double taxation. You would apply to companies what the US applies to US individuals. If you have a subsidiary in Germany and paying local taxes of 10, but that would be paying 15 if you had the same income in the US, then you owe 5 to the US taxman in addition to the 10 you owe to the German taxman.

Re: Paradise Papers: Dear Tim Cook

#269

Post by m12k » Wed, Nov 08, 2017, 1:23 PM UTC

tyingq wrote: post #240

loceng wrote: post #188

Earlier quoted context omitted.

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.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

Agreed, the only sane solution to this is a massive overhaul of international tax law. Shaming companies just isn't a scalable solution in any way. There's a massive opposition against this both from multinationals and tax haven countries though - this article is a good way to start making it obvious to normal citizens that this issue should be on the ballot.

Re: Paradise Papers: Dear Tim Cook

#270

Post by owenversteeg » Wed, Nov 08, 2017, 1:23 PM UTC

adventured wrote: post #88

almostarockstar wrote: post #60

As an Irish citizen, I feel embarrassed by the way we have dealt with Apple (and other behemoth corps). We simultaneously gave these organisations "free parking" and a "get out of jail free card". I don't blame Apple for taking advantage though. I would.

That free parking increased Ireland's economy by nearly six fold in a mere 25 years. It took Ireland from a second tier economy, to a first tier economic power ($300b in GDP with a mere 4.7m people). From sub $15,000 GDP per capita in 1993, to surpassing the US in GDP per capita at $62,000. You can tell it's the large foreign corporations causing it, because of the big gap between the growth in domestic income and th…

And that's the problem: if the tax law changes to be more "fair", Ireland gets screwed. Like you said, the Irish government is fighting the EU decision to give them more taxes because if companies were forced to do that they might leave Ireland.