Earlier quoted context omitted.
Who committed the "fraud"? Apple, the Irish government, or both?
http://europa.eu/rapid/press-release_IP-16-2923_en.htm is the link to the EU press release that answers your question. Irish govt. tax deal is in violation of EU tax law and the EU recommend that the Irish govt. seek recompense to the tune of €13bn plus interest .
Commission says Ireland granted undue tax benefits of up to €13B to Apple
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Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#302Earlier quoted context omitted.
Who committed the "fraud"? Apple, the Irish government, or both?
The fraud is that there are many who feel no company should be able to shop around for a better tax deal and no country should be allowed to give them. This isn't about fairness but instead so that other countries don't have to correct their spending issues and can inflict the same pain on their contemporaries. Even in the US there are politicians who want to have all states implement similar taxation rules or penali…
I don't think 'fraud' means what you think it does.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#303Earlier quoted context omitted.
Countries provide a service (infrastructure, social programs, court system) based on a price (taxes). There is a floor for those costs. There is a minimal amount of tax required to provide those services. I think it's a bad idea to tell a country that they can't charge a lower price (taxes) in order to sell more business (have companies move there).
> There is a minimal amount of tax required to provide those services. And you can go lower than that amount if you attract an abnormal amount of companies through an abnormally low tax.
Overall I'm happy that gov'ts have to compete for companies. It's a great way to force them to be more efficient. If they never have to worry about their spending, why would they ever control it?
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#304Earlier quoted context omitted.
Dude, can I politely ask you to increase the amount of commas and periods you use? Otherwise you're really hard to follow :) > everyone else is mostly still locked within their own countries That's not really the case. In fact, in a lot of sectors purely-national players are now the exception, not the rule. You have Portuguese building companies winning UK contracts, and French companies outsourcing to Czech companie…
>Dude, can I politely ask you to increase the amount of commas and periods you use? Otherwise you're really hard to follow :) My english teacher flashback: Long sentence -3 pt. >That's not really the case. In fact, in a lot of sectors purely-national players are now the exception, not the rule. You have Portuguese building companies winning UK contracts, and French companies outsourcing to Czech companies. All that w…
Poland will have to join the Euro or leave, eventually - that's what the treaties they signed force them to do. Considering their relationship with the UK, I think the "leave" option is pretty realistic at this point.
> the EU is explicitly "anti-federation" at least on paper
No, the EU is about "ever closer union". The maintenance of individual national identities is clearly a "necessary evil". The long-term objective is to have a permanent, harmonised union where countries can resolve their differences without ever resorting to war - in other words, a federation. Chances are that this federation will never be as culturally cohesive as the US are, that it will actually be smaller than it is today (possibly even smaller than the current Eurozone), and that it will be less centrally-manageable than the US... but it will be a federation regardless.
Otherwise we'd have kept the Common Market we had in the '80s, with all the instability that the multi-currency setup brought. For all its faults, the Euro kept inflation and borrowing rates extremely low and stable for almost 20 years now. The minute we manage to disentangle public-debt markets from nationalistic sensibilities, we are golden.
> Yes but any US state will have more political pull over the the Federal government or any of its institutions
No, I don't think so. States do suffer a lot even in the US setup. As I said, the difference is that at the top you have someone who cares deeply about electoral colleges, especially in marginal states. In the EU there is nothing of the sort, so all pressure has to come from coordinated alliances between member states in the Council.
> If Janet Yellen would say to Alabama what the ECB said to Ireland or Greece
California, one of the most powerful states in the US, has been on the verge of bankruptcy for several years now. The FED certainly won't alter their monetary policies to suit Californian public debt, it's totally out of the question. You don't see in the US what you see in EU because they don't even entertain the idea that California should have its own currency. The FED looks at the US economy as a whole and does what it needs to do to keep the overall system afloat; if that means Alabama gets screwed, so be it. That's also what the ECB does, more or less.
In fact, EU states have a nuclear option that US states don't: they can leave. Greece could (and IMHO should) have left, but they came to the duel underprepared and eventually blinked first. Ireland is not in that position because it relies too much on its status as "tax haven cum operational base" for companies entering the EU market. So you can't leave and you can't keep being a tax haven, but if you play fair you can keep all you got and keep building from there.
> is also hardly representative of the actual elected governments of the various member states
I disagree there, I personally think the opposite is true. National governments hold too much sway on EU policies. The Council (i.e. governments) sets the agenda and then hides behind the Commission tasked to implement it. Some Commissioners are little more than puppets doing their governments' bidding (one McCreevy comes to mind, as well as one Dijsselbloem more recently...). EC governments nominate ECB figures then hide behind them when they have to make unpopular choices. They vote for directives in political contexts ("I give you this so you give me that") then feign ignorance when obligations come due.
I think EU institutions represent EU governments all too well. EU people, that's a different story - they have EuroParliament, and a fairly sane justice system, but could do with more representation.
> most EU states do not want federalization
Most EU states say they don't, but in practice they do. It makes life easier for everyone, keeps the peace, and protects the block from US/Russian/Chinese power. There will always be critics, but hey, that's life.
> if Ireland was setup as a tax haven like Luxembourg the EU wouldn't give a damn
Actually Luxembourg was in a pickle not long ago, because of their tax affairs. The difference is that Luxembourg will never be a competitor to large countries "where it matters", so it's given a bit of leeway; plus, its representatives are first-class and know how to play the game. The Netherlands is the other country with iffy tax arrangements, and they compensate again by playing the game (which means, they take the hit for France or Germany when there are hard decisions to make).
> it's an island with 5M people
Norway has the same population. Actually, Norway has 5M and Ireland 6+M.
> I don't understand what does naval access have to do with this argument
I'm just saying there are many ways to attract business.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#305Earlier quoted context omitted.
>Dude, can I politely ask you to increase the amount of commas and periods you use? Otherwise you're really hard to follow :) My english teacher flashback: Long sentence -3 pt. >That's not really the case. In fact, in a lot of sectors purely-national players are now the exception, not the rule. You have Portuguese building companies winning UK contracts, and French companies outsourcing to Czech companies. All that w…
>Poland, Denmark, and the Eastern/Baltic states are really lucky that they held their currency. Poland will have to join the Euro or leave, eventually - that's what the treaties they signed force them to do. Considering their relationship with the UK, I think the "leave" option is pretty realistic at this point. > the EU is explicitly "anti-federation" at least on paper No, the EU is about "ever closer union". The ma…
No, it hasn't. It was, until the supermajority budget requirement was removed, in perpetual legislative budget crises engineered by the legislative minority which had sufficient clout to prevent a supermajority, but it has never been "close to bankruptcy".
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#306Earlier quoted context omitted.
>Poland, Denmark, and the Eastern/Baltic states are really lucky that they held their currency. Poland will have to join the Euro or leave, eventually - that's what the treaties they signed force them to do. Considering their relationship with the UK, I think the "leave" option is pretty realistic at this point. > the EU is explicitly "anti-federation" at least on paper No, the EU is about "ever closer union". The ma…
> California, one of the most powerful states in the US, has been on the verge of bankruptcy for several years now. No, it hasn't. It was, until the supermajority budget requirement was removed, in perpetual legislative budget crises engineered by the legislative minority which had sufficient clout to prevent a supermajority, but it has never been "close to bankruptcy".
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#307Earlier quoted context omitted.
The laws are designed to make the extortion impossible. If one state isn't allowed to undercut another for an individual company then the "or we'll take our business elsewhere" question isn't possible.
> The laws are designed to make the extortion impossible. If one state isbn't allowed to undercut another for an individual company then the "or we'll take our business elsewhere" question isn't possible. Those are EU laws. Apple could have taken their business anywhere else, including outside EU where such laws don't apply, and a country could undercut Irish taxes. That said, I'm not against an international agreeme…
Yes, Apple could do that. But then they'd have to pay EU customs and other costs that aren't applicable when you do business inside the EU. They choose to be inside the EU for a reason, and they should pay accordingly.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#308People here are commenting on Ireland (and other jurisdictions) engaging in tax arbitrage to attract companies and jobs. Competing on tax rates and negotiating tax deals were a huge MNC like Apple pays a ridiculous 0.005% is bad: morally wrong, cuts to public services, increases unjustifiable economic inequality and is just not fair on other much smaller firms who have to pay full whack on the tax. Apple, FBK, etc do…
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#309Earlier quoted context omitted.
> California, one of the most powerful states in the US, has been on the verge of bankruptcy for several years now. No, it hasn't. It was, until the supermajority budget requirement was removed, in perpetual legislative budget crises engineered by the legislative minority which had sufficient clout to prevent a supermajority, but it has never been "close to bankruptcy".
Fair enough, I don't keep up with Californian affairs that much. Still, I don't believe the FED ever considered substantially altering its monetary policies to suit a given state budget. Am I wrong?
Not only doesn't it, but monetary policy isn't a suitable tool for that anyway. Even for the federal budget; in fact, one of the major reasons for independent central banking is to provide assurances to the private economy, currency users, and, particularly, those financing government debt that monetary policy will not be used to address the currency-issuing-government's fiscal condition (a trend that was distressingly common even in large, basically stable governments before independent central banking, and produced distrust in both government securities and currency.)
OTOH, the federal government's fiscal policy often directly addresses issues that may be particular pressures on state fiscal condition (and, indeed, many government programs -- including the big social benefit programs like Medicaid -- have regular adjustments to federal/state sharing ratios based on relative state economic conditions that are entirely designed around the premise that state economic conditions will drive state fiscal conditions and ability to participate.)
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#310Earlier quoted context omitted.
> There is a minimal amount of tax required to provide those services. And you can go lower than that amount if you attract an abnormal amount of companies through an abnormally low tax.
You could have a lower tax rate and make it up with volume, but you can't go below a certain tax revenue and still keep a level of infrastructure or social programs. Overall I'm happy that gov'ts have to compete for companies. It's a great way to force them to be more efficient. If they never have to worry about their spending, why would they ever control it?