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Paradise Papers: Dear Tim Cook

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Re: Paradise Papers: Dear Tim Cook

#511

Post by clamprecht »

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…

We need a service that makes it easy to setup whatever structures are necessary to pay the same taxes as Apple et al. Hear me out. Let's call it "Double Irish as a Service", referring to the famous Double Irish tax strategy[0]. Similar to Stripe Atlas, you sign up, and it sets up whatever structures and accounts are necessary to get the tax advantages. Then, once every company can do this (and not just the big companies), then the laws may change.

0. https://en.wikipedia.org/wiki/Double_Irish_arrangement

Re: Paradise Papers: Dear Tim Cook

#512

Post by tankenmate »

fastball wrote: post #486
explainplease wrote: post #464

Earlier quoted context omitted.

> I personally do not believe in objective morality. Then why is murder wrong?

Who says it's wrong?

If you truly question the morality of murder then it might not be far wrong to say that you are a sociopath.

Re: Paradise Papers: Dear Tim Cook

#513

Post by TrinaryWorksToo »

chii wrote: post #454
TrinaryWorksToo wrote: post #235

Earlier quoted context omitted.

Think about it this way, if I had an objectively better phone than the iPhone I would go out of business because Apple keeps more of their money in dishonest tax schemes. They hurt innovation. And that money is supposed to go to governments to use, which it doesn't, hampering the ability for others to thrive. Now there's is less competition

> I had an objectively better phone than the iPhone I would go out of business because Apple keeps more of their money in dishonest tax schemes. why would that happen? unless apple uses their tax dodged profits to directly prevent you from operating, which would be illegal to do in the first place.

It wouldn't have to be direct to have an effect. If their reduced taxes causes education to be underfunded, I cannot hire enough talented engineers, for example.

Re: Paradise Papers: Dear Tim Cook

#514

Post by SaltyBackendGuy »

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?

It's too bad we can't legislate morality. As long as politics is in bed with corporate interests the bigger bank roll wins.

Legality != Morality

Re: Paradise Papers: Dear Tim Cook

#515

Post by arethuza »

balabaster wrote: post #494
arethuza wrote: post #485

Earlier quoted context omitted.

J.K Rowling, author of the Harry Potter books and who is fairly wealthy has an interesting moral stance on paying tax: "... I am indebted to the British welfare state; the very one that Mr. Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that…

Another reason I think she's an amazing woman to look up to and aspire to be like... but I'm not making 7 figure royalty cheques. I'm paying the same taxes (give or take) as everyone else that can't afford to leverage West Indies tax shelters. In the meantime, I'm stuck utilizing tax loopholes that save me tens of dollars a year.

I think was I was probably reacting to "everyone leverages the opportunities they have." and I was pointing out that there are some people, like Rowling, who avoid paying very large amounts of tax (tens or hundreds of millions in her case) for largely moral reasons. I'm just happy that people like that exist.... :-)

Re: Paradise Papers: Dear Tim Cook

#516

Post by dahart »

nickpp wrote: post #266
schalab wrote: post #212

Earlier quoted context omitted.

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 pl…

The "Invisible Hand" was a phrase coined by a Scottish economist who lived in the 1700's, Adam Smith. Do you think he had any concept of US based global computer corporations the size of IBM, MS, or Apple?

Free markets are not the only source of Invisible Hand. There's a growing mountain of actual evidence that regulations also often come with Invisible Hands that are larger than the hands of free markets. Take the environment [1], for example. There's no amount of Invisible Hand that offsets pollution that kills people. The Porter Hypothesis [2] is the name of the invisible hand inside the debate on environmental policy.

[1] https://www.epa.gov/sites/production/files/2017-08/documents...

[2] https://en.m.wikipedia.org/wiki/Porter_hypothesis

Re: Paradise Papers: Dear Tim Cook

#517

Post by mprev »

Cakez0r wrote: post #331
mprev wrote: post #302

Earlier quoted context omitted.

Maybe 15 years ago. IR35 has made that approach tax-neutral, at best.

I am new to the contracting game in the UK, but I haven't met a software contractor yet who isn't using this approach. My accountant even recommended it to me when I set up. It is definitely a non-trivial tax saving. Do you pay yourself dividends from your company? Or do you use your profits to increase your director salary so that you pay tax at the same rate as a full-time PAYE employee? Not meaning to call you out…

I didn't say anything about avoidance, so I'm not sure your questions about dividends etc were directed at me.

At the turn of the century, it was common for software developers in the UK to leave their job on a Friday and then show up to do the same role at the same desk on the following Monday but suddenly they were a LTD company acting as an independent contractor. IR35 sought to put an end to that. It didn't apply to genuine freelancers, although there were risks.

And, I'm not sure I understand what you mean about not meeting a software contractor who isn't taking that approach ... as that approach is the very definition of software contracting :)

Re: Paradise Papers: Dear Tim Cook

#518

Post by TrinaryWorksToo »

valuearb wrote: post #403
TrinaryWorksToo wrote: post #235

Earlier quoted context omitted.

Think about it this way, if I had an objectively better phone than the iPhone I would go out of business because Apple keeps more of their money in dishonest tax schemes. They hurt innovation. And that money is supposed to go to governments to use, which it doesn't, hampering the ability for others to thrive. Now there's is less competition

Apple is the biggest taxpayer in the world. It pays every bit of tax it owes. It should be taxed less, not more. Corporate income taxes are corrosive to maintaining our society.

I'm not going to argue whether or not it pays all the taxes it owes. I'm pointing out that if they have access to offshore accounts that most businesses can't, they gain an unfair advantage over those other businesses. If you want to remove corporate income taxes, it should happen at the same time, not selectively to larger corporations.

Re: Paradise Papers: Dear Tim Cook

#519

Post by simonh »

Clanan wrote: post #281
tyingq wrote: post #240

Earlier quoted context omitted.

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?

The fix can certainly involve appealing to morals and human responsibility. A company is, after all, just a group of people. This should be a very strong tactic considering how liberal Silicon Valley is. The major players preach constantly about progressive ideals, yet fail to do more than the minimum when push comes to shove. My business partner and I purposefully pay normal taxes, avoiding accountants' crazy tax re…

>The fix can certainly involve appealing to morals and human responsibility...

Are you really suggesting the management and board of every major company in the world should meet to decide how much tax they should choose to pay each year? Even if they did, where should they choose to pay it? Should Apple Pay more tax in China where the phones are assembled? In America where they are designed? In the countries where they are sold? What criteria do they use to decide?

That might conceivably work for one company, on some tax issues, for a while. These are companies that operate simultaneously in multiple countries with different tax systems. They can’t be expected to choose to pay more tax here or there.

I do agree these companies pay too little tax, but expecting them to pay more voluntarily is never going to work.

Re: Paradise Papers: Dear Tim Cook

#520

Post by Flenser »

pavlov wrote: post #498
dijit wrote: post #473

Earlier quoted context omitted.

What if they've done that already though. What if the reason big companies avoid tax is that the shareholders ensure someone values fiscal results over supporting the country they earned the finance in is in the directors chair.

Yes, that's exactly why American corporations do the things they do. It's not a legal obligation though. Shareholders could choose to have corporations managed differently. That kind of "pro-tax" activist shareholders don't exist, but it's not inconceivable that large public funds (pensions etc.) could become such.

Perhaps if governments started penalising corporate tax avoidance by confiscating a percentage of a company's shares the shareholders would be incentivised to make sure whoever is running the company will pay taxes fairly.
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