Paradise Papers: Dear Tim Cook • Hacker News Board

Re: Paradise Papers: Dear Tim Cook

#571

Post by peoplewindow » Wed, Nov 08, 2017, 5:02 PM UTC

germanier wrote: post #524

ptaipale wrote: post #510

Earlier quoted context omitted.

> It is not OK if the only presence they have is a mailbox and the actual act of operation is done somewhere else. As I said, the very point of EU (free movement of goods and capital) is that it is perfectly OK to have just a mailbox presence (e.g. to handle warranty claims and such, a service which is sold to the actual operating company in another EU country) and have the actual operation done somewhere else. I tak…

Sorry, I didn't make my point clear enough. Amazon does provide services from Luxembourg which would be fine if that's where they are actually based at. As far as I know they have some lawyers there but that's about their presence (which is what I meant with "mailbox only"). The actual service is peovided somewhere else. Making it possible to exploit that is definitely not the point of EU freedoms. I provided an exam…

The EU corporate tax regime was specifically set up (by Fritz Bolkerstein) to tax companies where they are registered, not where they nebulously "provide services", something you can't define and nor can the EU. That's exactly because the EU was meant to encourage businesses to move around the continent and set up wherever was more convenient for them.

Of course in recent years the EU got cold feet on the whole "four freedoms". Services never really happened. Capital is a joke - France and Germany ban foreign investments all the time and Greece had capital controls within recent memory. It's only migration the EU is really, really keen on, probably because that's the one that suits their political objectives the best.

Re: Paradise Papers: Dear Tim Cook

#572

Post by pavlov » Wed, Nov 08, 2017, 5:04 PM UTC

tskaiser wrote: post #544

pavlov wrote: post #465

Earlier quoted context omitted.

>... if those tax reduction schemes are legal many companies are legally bound by their stock holders to exploit them, or else be found negligent in their duties. That's not the case. There is no way a company's management could be sued for "gross negligence in tax planning". If shareholders are unhappy about this issue, their recourse is the same one that's always available to them: elect a new Board of Directors an…

I admit to be completely out of my depth, but my understanding is that it is a fiduciary duty of the directors to act in the best interest of the shareholders. Tax planning is a huge part of profit and thus shareholder value, so wouldn't such "gross negligence" represent a breach of fiduciary duty?

Suing directors for negligence is not easy at all. It's hard to imagine a shareholder lawsuit that basically says: "As a director you didn't guide management to move operations to Jersey, so we want you to pay us $100 million"... It's even harder to imagine a US court being friendly to such a case.

The greatest example of board negligence in this industry (that I can think of) in recent years would be when Hewlett-Packard's board hired Léo Apotheker as CEO in 2010. The board members had never met the man and his career had been on a different continent, yet they didn't even interview him in person before giving him the job!

Apotheker spent $10.2 billion to buy a British company named Autonomy. Soon after he was fired. Only a year later, HP was forced to write down $8.8 billion of Autonomy's purchase price.

That enormous loss was directly the fault of HP's board for hiring such a terrible CEO and letting him do the terrible deal. But shareholders didn't have any recourse; the best they could do is vote on a new board.

Re: Paradise Papers: Dear Tim Cook

#573

Post by fastball » Wed, Nov 08, 2017, 5:04 PM UTC

n4r9 wrote: post #496

fastball wrote: post #457

Earlier quoted context omitted.

Because a corporation is not a person? It's a collection of individuals, and if you are taxing all of the individuals fairly why do you need to tax the collective as well?

I feel like this is sliding towards a debate about the virtues of corporation tax full stop, which is a slightly different matter. I actually think the idea of a moral burden could reasonably be extended to entities such as corporations, but let's put that to the side for now. At some point in the process a decision was made - collectively, by people - to avoid paying the stipulated rate of tax in countries in which…

How is that hypocritical? Individuals try to minimize their taxes. So do companies. Except a company isn't actually benefitting because a country is just a collective.

Do you have a child? Do you not deduct that child in your taxes? What about a mortgage? Donations to charity? Etc. etc.

Re: Paradise Papers: Dear Tim Cook

#574

Post by peoplewindow » Wed, Nov 08, 2017, 5:04 PM UTC

gaius wrote: post #238

repomies691 wrote: post #219

Earlier quoted context omitted.

So... Basically Apple is increasing the suffering by creating all those laptops and iphones? That is very difficult for me to grasp. Apple creates computers and phones which make peoples lives a lot better, and people are willing to pay for those. Why is the suffering increasing? I guess world would be a better place if apple would pay more taxes, but I'm pretty sure that world would be worse place without Apple, whe…

Apple cannot exist outside of the "ecosystem" of infrastructure and institutions maintained by the State, i.e. ordinary taxpayers. Good luck getting your iPhone without roads, or keeping it without a police force. Tax evading companies like Apple and Google justify it by claiming that they create value in a vacuum, so should keep all of it.

Police and roads aren't services provided to Apple. They're services provided to you. I've never once seen a corporation travelling down a road - has anyone else?

The only government services corporations specifically use re legal services like courts and patent offices. Those have fees attached and in the USA the PTO is actually a profit center, so tax is irrelevant.

There's no moral argument for taxing artificial social constructs like corporations.

Re: Paradise Papers: Dear Tim Cook

#575

Post by ionised » Wed, Nov 08, 2017, 5:05 PM UTC

fastball wrote: post #457

n4r9 wrote: post #154

Earlier quoted context omitted.

Why is the burden not on both? Both Apple and the graduates are profiting from the subsidised education.

Because a corporation is not a person? It's a collection of individuals, and if you are taxing all of the individuals fairly why do you need to tax the collective as well?

So a person has a moral burden but a group of people don't?

As long as Citizen's United is a thing, the companies have a moral burden to go along with their supposed freedoms of speech.

Re: Paradise Papers: Dear Tim Cook

#576

Post by gaius » Wed, Nov 08, 2017, 5:08 PM UTC

peoplewindow wrote: post #574

gaius wrote: post #238

Earlier quoted context omitted.

Apple cannot exist outside of the "ecosystem" of infrastructure and institutions maintained by the State, i.e. ordinary taxpayers. Good luck getting your iPhone without roads, or keeping it without a police force. Tax evading companies like Apple and Google justify it by claiming that they create value in a vacuum, so should keep all of it.

Police and roads aren't services provided to Apple. They're services provided to you . I've never once seen a corporation travelling down a road - has anyone else? The only government services corporations specifically use re legal services like courts and patent offices. Those have fees attached and in the USA the PTO is actually a profit center, so tax is irrelevant. There's no moral argument for taxing artificial…

Tee hee, do iPhones teleport all the way from China into your hand then?

Re: Paradise Papers: Dear Tim Cook

#577

Post by peoplewindow » Wed, Nov 08, 2017, 5:09 PM UTC

secfirstmd wrote: post #283

belorn wrote: post #274

Earlier quoted context omitted.

Not only do they get tax cuts and cheap real estate from governments, they also get direct money. When google decided to create a data center in Sweden, the Swedish government gifted them $20 million in "establishment support". Money sent from the tax payer directly to the bank account of Google. Reason? So that google would pick Sweden. The politicians argument is that Sweden grain prestige if google has their data…

Ireland has the same problem. Attracting large amount of data centres which don't really create all that many jobs. It also then shifts the costs because the electricity demand is so huge and it strains infrastructure.

Taxpayer incentives to build datacenters are a good example of poor decision making by governments, and poor allocation of tax money. Seems like an argument to drop corporation taxes rather than increase them.

Re: Paradise Papers: Dear Tim Cook

#578

Post by peoplewindow » Wed, Nov 08, 2017, 5:13 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…

There are lots of complicated interactions with things like pension funds and mortgages that can easily push your "income" over $100k/yr even if your salary is nowhere near that level, which is at any rate, not all that much these days especially for people in the Hacker News industries.

It's a pretty terrible systems.

Re: Paradise Papers: Dear Tim Cook

#579

Post by tskaiser » Wed, Nov 08, 2017, 5:13 PM UTC

pavlov wrote: post #572

tskaiser wrote: post #544

Earlier quoted context omitted.

I admit to be completely out of my depth, but my understanding is that it is a fiduciary duty of the directors to act in the best interest of the shareholders. Tax planning is a huge part of profit and thus shareholder value, so wouldn't such "gross negligence" represent a breach of fiduciary duty?

Suing directors for negligence is not easy at all. It's hard to imagine a shareholder lawsuit that basically says: "As a director you didn't guide management to move operations to Jersey, so we want you to pay us $100 million"... It's even harder to imagine a US court being friendly to such a case. The greatest example of board negligence in this industry (that I can think of) in recent years would be when Hewlett-Pa…

Thank you for the insight. It is one thing what holds in theory, and quite another what happens in reality, as you point out.

Re: Paradise Papers: Dear Tim Cook

#580

Post by peoplewindow » Wed, Nov 08, 2017, 5:15 PM UTC

nhaehnle wrote: post #174

sschueller wrote: post #142

Earlier quoted context omitted.

Good luck with that, fee has increased significantly and you may be required to pay an exit tax: "The Exit Tax is computed as if you sold all your assets on the day before you expatriated, and had to report the gain. Currently, net capital gains can be taxed as high as 23.8%, including the net investment income tax."

This doesn't actually prevent you from leaving though, and is probably seen by many (most?) people as entirely fair.

It prevents you from leaving if you can't afford to pay the tax. And lol, how is an exit tax even remotely fair? Would you have described the USSR's exit visas as fair too? The US acts like it owns its citizens as property. The tax regime around citizenship is dangerously close to crossing the line to slavery.