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Paradise Papers: Dear Tim Cook

projekte.sueddeutsche.de

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Re: Paradise Papers: Dear Tim Cook

#531

Post by tooltalk »

sfifs wrote: post #170
nickpp wrote: post #151

Earlier quoted context omitted.

Monopolies are granted by governments. The free market has a natural solution to monopolies, it's called competition - startups. Big Cos will always lobby governments to add rules and regulation to raise the barrier of entry on their market and thus reduce competition. They, in fact, buy their monopoly from the government. Solution? Take away the government's ability to grant monopolies.

In any free market, the giant incumbent will either buy out or copy and squelch startups that threaten them unless restricted by anti trust. Witness how Facebook treats competition in the social space. Or how Oracle treats the database space. Or how Microsoft funded Apple's survival and Intel ensured AMDs. If there are sufficiently few rules and an lack of power in the government to enforce (Korea, Japan, Italy), gia…

I think the companies you cited are not very good examples of monopolies or monopolistic behaviors: I've always viewed FaceBook as a fad, just like MySpace that once dominated the social space. Or is there any particular behavior that you find out of ordinary? As for Oracle, while their product has dominated the database (and niche CRM) market, FaceBook, Microsoft use their own or other non-Oracle products. In fact, I have seen more companies using noSQL, Postgresql/MySQL (and its variants) in recent years. Having worked in the wall street tech since late 1990's, I remember how everyone moved from Sybase to Oracle and MS SQL, and now to distributed DBs like Cassandra, etc. Apple faltered because of many bad decisions the company made in the 90's and Apple's revival was Steve Jobs's doing, not Microsoft's funding -- though Gates's decision to support MS Office certainly helped.

Not sure about Italy, but the economies of Korea and Japan were orchestrated by (or in very overt collaboration with) their gov't. In case of Korea, they instituted import-substitute-industry model that prevented foreign competitions (by policies of gov't) so their domestic industry had chance to grow and compete and a few chosen companies were given favorable contracts/loans/grants; likewise in Japan their model was better known as "Japan Inc." to describe their alliance between business and gov't interests. It wasn't an "lack of power" that resulted in the structure that we now see in both countries -- they are the intended products of explicit gov't policies.

Re: Paradise Papers: Dear Tim Cook

#532

Post by unixhero »

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…

That is where you are wrong. A cannot be thought of as a "group of people". A company is a legal entity, which can do absolutely ANYTHING within the law. It, the corporation, will by default do everything in its power to maximize shareholder value and that is it.

Beyond that, there's Corporate Social Responsibility, but of course that is downstream from the corporation's main objective, which is to maximize profits.

The corporation is to be understood as an "individual" and is legally so, but one which has limited legal liability.

Re: Paradise Papers: Dear Tim Cook

#533

Post by improbable22 »

chii wrote: post #445
improbable22 wrote: post #363

Earlier quoted context omitted.

But will people travel to this tax haven to buy their computers? Will Apple's employees all move there to write software? Nope. What we mean by Apple operating in (say) Germany is these things: they make sales there, and they have employees there. Where the letterhead says they're incorporated... isn't this just an implementation detail? It's like asking where their datacenter is located. It's in the cloud, who cares…

> Why not simply tax the things which cannot move, transactions involving real people who live in particular places? that's already happening. Unless you're implying increasing consumption tax (VATS, GST etc), or higher income tax for individuals (payroll tax, capital gains tax etc). The tax that's "missing" (read: dodged) is corporate income tax - which is a tax on the profits a corporation makes. But if you don't m…

Yes that's exactly what I'm implying.

We tax the money going from a human being into the corporation (VAT etc). And we tax the money coming out (Payroll etc).

The idea that we must tax the company's profits too (if they made any) is what seems strange to me. Because it depends then on defining which bit of a multinational made the profit, and there's no good way to do this. All it seems to do is encourage complicated schemes which the little guys can't afford. And I don't see the advantage over just taxing both ends of the pipe.

I know there are economists who disagree with me, and I don't understand their reasons. But all I'm seeing in the letter (and this thread) is personification, saying "the pipe must pay his share!" but the pipe isn't a person.

Re: Paradise Papers: Dear Tim Cook

#534

Post by [deleted] »

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?

[deleted]

Re: Paradise Papers: Dear Tim Cook

#535

Post by bambax »

> since 2010, Apple’s foreign-earned income has been taxed at a rate of between 1 and 7 percent. Mr. Cook, do you believe this comports with the “moral responsibility” you have advocated?

No, he doesn't believe that. He also doesn't care about "moral responsibility". He's the CEO of a mega-corporation. He cares about world dominance, competition, and profits.

It's completely useless to appeal to CEOs' moral sense; they probably don't have one and even if they do, they don't let it run their lives.

> Such “tax optimization” – albeit legal...

That's the whole problem. What would be useful would be to make laws that force corporations to pay proper taxes, and then ruthlessly enforce them.

Shame can help a little, maybe, but laws first.

Re: Paradise Papers: Dear Tim Cook

#537

Post by tooltalk »

adamlett wrote: post #313
nickpp wrote: post #151

Earlier quoted context omitted.

Monopolies are granted by governments. The free market has a natural solution to monopolies, it's called competition - startups. Big Cos will always lobby governments to add rules and regulation to raise the barrier of entry on their market and thus reduce competition. They, in fact, buy their monopoly from the government. Solution? Take away the government's ability to grant monopolies.

Monopolies are granted by governments Sometimes, sure. But far from exclusively. Monopolies arise naturally in unregulated markets. The free market has a natural solution to monopolies, it's called competition - startups. That’s like saying that natural selection is the solution to hereditary diseases. Not so comforting for those suffering now.

Do you have any examples of monopolies arise naturally in unregulated market?

Re: Paradise Papers: Dear Tim Cook

#538

Post by eecc »

nickpp wrote: post #224
eecc wrote: post #202

Earlier quoted context omitted.

"The free market has a natural solution to monopolies, it's called competition - startups." Please provide proof that markets never fail and indeed that the ideal Free Market exists. Take the time, I'll wait...

Sorry, I can't. I am a working man, not a philosopher. But please look around you. Every great thing around me was created by a free(-ish) market: this PC, my car, my job, the materials in my home, the heating engine, the food I get in the restaurant, the entertainment on my TV, everything. Then every crappy experience in my existence has something to do with the government: state hospitals, infrastructure, the DMV a…

PC "free market" only took off when someone found a means to legally screw with IBM's monopoly on the BIOS. You also seem to have forgotten why quips such as "Wintel", "Chipzilla", "M$", "Adopt Extend Extinguish" were created. And that's just limited to ICT...

Re: Paradise Papers: Dear Tim Cook

#539

Post by eggpy »

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…

A company is not just a group of people. At least, any publicly-traded company has a legal obligation to it's shareholders. The job of the Board of Directors is to ensure that the company is performing as optimally as possible to earn as much as possible for the shareholders. Morals aren't a part of the equation, it's all exploiting the confines of the law.

Re: Paradise Papers: Dear Tim Cook

#540

Post by jamesblonde »

valuearb wrote: post #468
jamesblonde wrote: post #407

Earlier quoted context omitted.

How would it benefit society? Reduced state income that could be used to invest in infrastructure and people? Will the companies invest that money with society's interest at best better than the govt would? I don't think so. What do Apple do with their money? They horde it, waiting for a windfall to bring it back to the States and pay low/no corporate tax on the repatriated profits.

You tax things you want less of, not more if. Taxing corporate profits is a tax on investment. Apples actual income tax rate is in excess of 60% if they repatriate. First, they have to pay corporate income taxes in all their foreign countries. Then, they owe 9% to state of California on what’s left. Then they owe 35% to the US treasury on what’s left. Then they pay the remainder as dividends, and shareholders owe up…

But you know that even if you eliminated corporate tax, companies would not pay out profits as dividends, if there was a loophole around it. And there are loads, of course. Share buybacks, for example.
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