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Paradise Papers: Dear Tim Cook

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Re: Paradise Papers: Dear Tim Cook

#551

Post by ben_w »

qznc wrote: post #526
simonh wrote: post #519

Earlier quoted context omitted.

>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 th…

My (ultra-simplistic) idea would to only tax land and VAT. Abolish all other taxes. Unfortunately, governments like fine-grained taxes because it gives them the illusion of control.

That’ll work great if every nation simultaneously agrees to it, but is potentially catastrophic if they don’t: all the tax-dodgers move to your country for tax purposes while continuing to make and sell everything else exactly as before.

And if every nation agreed to have identical tax laws, we wouldn’t have a problem with lawful multinational tax minimisation in the first place, because there would be no advantage to it.

Re: Paradise Papers: Dear Tim Cook

#552

Post by [deleted] »

Cthulhu_ wrote: post #320
PedroBatista wrote: post #288

Earlier quoted context omitted.

Laws are written by people ( sadly by lawyers paid by these companies in this case ), just change the laws. And by trying to do this we'll see creatures come out of the woodwork and previously virtue signaling personalities going strangely MIA.

One does not simply change the laws, just like you're indicating. You need a majority vote in a government or international thing to change laws, and those are easily influenced if you have more money than the GDP of many countries. Actually that makes me wonder when we'll see the first companies starting their own countries.

[deleted]

Re: Paradise Papers: Dear Tim Cook

#553

Post by ionised »

valuearb wrote: post #373
Clanan wrote: post #281

Earlier quoted context omitted.

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…

It would be illegal and unethical for Apple to pay more taxes than it owes. That money doesn’t belong to Tim Cook, but to Apple shareholders.

Why would it be either of those things?

Re: Paradise Papers: Dear Tim Cook

#554

Post by zajd »

nickpp wrote: post #543
zajd wrote: post #488

Earlier quoted context omitted.

What kind of role do you think the government should play? Should we continue to privatize things like prisons? Seems it would be difficult to incentive rehabilitation when prisons are paid per bed filled. On the other side, should we privatize the military? the fire department? the courts? the police? why not?

A role as small as possible, but not smaller. Specifics depends of the domain, and there you need a domain expert, which I am not. I just believe that as a general strategy, we should be continuously attempting to reduce govt power and involvement while allowing the free markets to work. I am worried that we are doing the opposite, where our current response to pretty much any issue is more govt regulation/interventi…

> I just believe that as a general strategy, we should be continuously attempting to reduce govt power and involvement while allowing the free markets to work.

Sure, I can agree with that. But what if the lack of government power is what is preventing free markets from working? Things like anti-monopoly legislation. I mean, I'll give you that the reason these things exist is because private companies use the government to enforce their monopoly. But how do you plan on opposing that without using some sort of anti-trust action?

Re: Paradise Papers: Dear Tim Cook

#555

Post by tooltalk »

taway_1212 wrote: post #542
nickpp wrote: post #277

Earlier quoted context omitted.

Nobody's denying the contribution of the govt $$$ to the creation of the PC. But I've seen computers build by governments. They were slow, huge, power hungry, expensive behemoths. They sucked. We're a long way from there. And free market brought us all the way here.

Are you aware of the fact that Sillicon Valley was created by the US Government?

Are you referring to the fact that SV was initially founded by the defense industry -- which was in turn all funded by the gov't -- in its early days?

Re: Paradise Papers: Dear Tim Cook

#556

Post by hennsen »

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?

I don’t necessarily believe it will work to beg them to show fairer behavior.

But then, the issue that many businesses and corporations don’t consider fairness and moral as factor in their decisions and behavior is an urgent one.

I think it’s a big problem that leaders of a company might even be sued by shareholders for taking a morally good decision (as long as the other option is just bad in terms if moral, but still legal) that leads to even a slight loss in financial gain for the company and shareholders.

This goes for such tax avoiding schemes but also for any other decision with effects on society and nature. Being fair and sustainable in society, social and environmental aspects simply is not a goal for any company that way.

Re: Paradise Papers: Dear Tim Cook

#557

Post by Swinx43 »

Cakez0r wrote: post #530
mprev wrote: post #517

Earlier quoted context omitted.

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…

Ah, my apologies. I got you mixed up with the parent comment poster. To explain anyway: As a contractor with a limited company, I have two options when it comes to moving money from my company to my personal account. 1) Set my salary to be the same amount as the money I've earned from contracting, thus paying the same amount of tax as a "regular" PAYE employee who works full time 2) Set my salary to be minimum wage a…

But have you done the calculation on option 2 to see what you will end up paying in tax (Both corporate as well as personal income tax) when you do pay out those dividends?

You will realise that you have not "avoided" any tax really compared to a normal salaried employee due to not being able to reduce your corporation tax in the way other big organisations do.

Accountants make it sound really good but when you get down to the actual tax being paid you are not saving much, if any given the new rules implemented in the last couple of years.

Have a look at the example that I have shown as a reply to your parent comment. I would be very interested to hear your take on this.

Re: Paradise Papers: Dear Tim Cook

#558

Post by valuearb »

dragonwriter wrote: post #487
valuearb wrote: post #437

Earlier quoted context omitted.

You still have double taxation because of dividend taxes. The US has one of the highest corporate tax rates already, as a country we’d be far better off making it zero.

> You still have double taxation because of dividend taxes. Corporations are distinct from their owners, that's the whole point of a corporation. That's not double taxation, it's single taxation of two separate entities, one of which acts as a liability shield for the other. > The US has one of the highest corporate tax rates already, Nominally, but one of the lowest effective corporate tax rates

Whether it’s two seperate entities or not, the disincentive is still the same. Investors who want to start a business in the US have to pay > 50% of their profits to taxes before they receive them.

And the high US Corp tax rate isn’t nominal, it’s real. Apple appears to pay a lower rate, but that’s only because of most of it’s profits are earned overseas.

If it paid 10% on two thirds of its earnings earned overseas, and 40% (state and federal income tax) on the one third earned in the US, it looks like only an 19% total income tax rate.

But when it returns the foreign earnings it pays another 40% state/federal on them, for a blended rate of 43%. And shareholders owe dividend and state taxes on top of that.

Tax deferral isn’t avoidance. Even if Apple gets a 10% repatriation holiday, their blended rate is still over 30% and total for shareholders over 40%.

Re: Paradise Papers: Dear Tim Cook

#559

Post by BearGoesChirp »

chris_t wrote: post #280
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?

This is the key point that is so often missed. Getting angry at Apple et al for following their incentives rationally is silly. I'd love to see journalists doing a better job of explaining the failures of the tax system rather than peddling pointless outrage, but I suppose that they too are following their incentives rationally; outrage gets more clicks.

>Getting angry at Apple et al for following their incentives rationally is silly.

That logic doesn't work because people do get mad at things they view as wrong even if they are currently legal (or were legal when they happened). In this case, people thing Apple has done wrong regardless of the legality of the action.

Re: Paradise Papers: Dear Tim Cook

#560

Post by peoplewindow »

toyg wrote: post #480
improbable22 wrote: post #448

Earlier quoted context omitted.

But this is exactly what happens now. And this is what the letter is upset about. He thinks Apple Europe Gmbh. made profit, and Apple's accountants say Apple Paradise Inc. made the profit, and we all think Apple Cupertino made the profit. And I don't see a good way to settle the argument, thus I suggest not having it. "tax has to be paid where they are created or used" Yes exactly. When they sell a cool computer for…

> Apple's accountants say Apple Paradise Inc. made the profit ... because they offset all local profits to expenses incurred in licensing the brand. > When they sell a cool computer for E2000, they have used their brand to sell it, and there tax is collected. But tax is supposed to be collected there and it's not , because Apple accountants immediately declare all profits as debits towards AParadise, so there is $0 p…

Yes, those countries with low corporation tax are so much like Somalia ... I think you lost the argument at that point. If Germany stops trying to tax companies that aren't German it won't turn into anarchy.
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