Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Paradise Papers: Dear Tim Cook

projekte.sueddeutsche.de

Post reply on HN
Print view View original

681–690 of 817 posts

Re: Paradise Papers: Dear Tim Cook

#681

Post by libertyEQ »

dangerlibrary wrote: post #671
libertyEQ wrote: post #650

Earlier quoted context omitted.

Your comment basically breaks HN guidelines by calling into question the motivations of all commenters that disagree with you. Some of us simply believe that taxing corporations makes little sense because companies set their pricing with applicable taxes in mind. Ultimately, only people pay taxes, so only people that have not fully considered the implications believe they are "sticking it to the man," when in reality…

Your comment asserts that corporate tax has zero impact on corporate profit. If you don't fully agree with that statement, you may want to consider whether you fully agree with everything you wrote.

>Your comment asserts that corporate tax has zero impact on corporate profit.

I didn't intend to "assert" that, and I think it's fair to ask you to elaborate, as I believe there are assumptions embedded in your interpretation of what I wrote.

edit: Grammar.

edit1: Do you think Apple incorporates the cost of the tax burden into the price of an iPhone? I think it really comes down to whether you think Apple would reduce their unit price if it would ultimately result in gross profit increases. It's like taking VC financing, "Do you want to own 100% of a $500K/yr revenue company or 49% of a $3M/yr revenue company?"

Re: Paradise Papers: Dear Tim Cook

#682

Post by valuearb »

pwinnski wrote: post #622
valuearb wrote: post #468

Earlier quoted context omitted.

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…

This is not accurate. Currently they are paying between 1 and 7% on income, as the Paradise Papers document. If they re-patriated every bit of income to the U.S., they would owe an additional 35%. That brings the tax rate to 36-42% (actually slightly less since the 35% would be on the 99-93% remaining), and that's that. What they then choose to do with the money after that, and what taxes individuals pay on their own…

"What they then choose to do with the money after that, and what taxes individuals pay on their own investments, are not part of Apple's tax rate."

It's not part of Apple's rate, it's part of the rate at which the entire investment is taxed. The US taxes profits on corporate investments in the range of 35-70%, do you really think that's realistic? A business owner has a large number of countries they can just re-incorporate in to be able to keep 3/4s of their profits instead of less than half.

Re: Paradise Papers: Dear Tim Cook

#683

Post by valuearb »

pjc50 wrote: post #507
pc86 wrote: post #424

Earlier quoted context omitted.

Please explain the difference between "tax loophole" and "tax law."

With a so-called "general anti-avoidance rule" (GAAR) https://www.gov.uk/government/publications/tax-avoidance-gen... Effectively if your tax arrangements are weird enough they have to be submitted to a judicial-like body to determine whether they are for some sort of legitimate business purpose or purely for the purpose of tax avoidance. An example: https://www.gov.uk/government/uploads/system/uploads/attachm... "Pa…

Nothing Apple does violates GAAR. It pays all the taxes it owes in every country it does business in, then it takes the remaining profits and moves them to a low tax location because repatriating them to the US would cost at least 40% in additional taxes.

Re: Paradise Papers: Dear Tim Cook

#684

Post by pwinnski »

valuearb wrote: post #663
pwinnski wrote: post #622

Earlier quoted context omitted.

This is not accurate. Currently they are paying between 1 and 7% on income, as the Paradise Papers document. If they re-patriated every bit of income to the U.S., they would owe an additional 35%. That brings the tax rate to 36-42% (actually slightly less since the 35% would be on the 99-93% remaining), and that's that. What they then choose to do with the money after that, and what taxes individuals pay on their own…

Nope, Apple pays a world-wide rate of 24.6%. https://www.apple.com/newsroom/2017/11/the-facts-about-apple... And the real rate is actually higher because it doesn't count the deferred taxes they owe and will pay when they repatriate.

The statement from Apple includes "Apple’s effective tax rate on foreign earnings is 21 percent" but that is not the rate they've actually paid. They state elsewhere that they believe the majority of taxes should be paid in the U.S., but they're not actually paying them here, either. Instead they're holding the income off-shore to avoid paying the taxes where they say they should be paid, and waiting for the rate to be lowered or even eliminated in a one-time holiday.

IOW, that 24.6% absolutely does include the money they say they expect to owe when they eventually repatriate those earnings.

In the meantime, they earn returns on the money they've set aside that they "owe" for taxes they aren't actually paying, so deferring the payments is very profitable for them. They've even taken out large loans in the U.S. to pay dividends, because it was cheaper for them to borrow money and pay it back with interest than repatriate this money.

It's fair to say I love Apple, and I've been described as too ardent a defender of their, but they're being ridiculously disingenuous here, and it's clearly working, as you took that sentence from their statement at face value.

Re: Paradise Papers: Dear Tim Cook

#685

Post by valuearb »

rescripting wrote: post #506
pc86 wrote: post #424

Earlier quoted context omitted.

Please explain the difference between "tax loophole" and "tax law."

Exactly. Tax loopholes are like exploits. If they were all enumerated somewhere nicely then we could just patch them up. If you're planning on using exploits, you keep try and them secret. Once they are common knowledge they get patched (hopefully).

What Apple does is exactly what the US Tax code wants them to do, nothing secret about it. If it were to repatriate it's foreign earnings every year, it's tax rate would skyrocket from it's current 24.6% to around 50% (leaving less than 30% for shareholders after dividend taxes).

Re: Paradise Papers: Dear Tim Cook

#686

Post by n4r9 »

fastball wrote: post #573
n4r9 wrote: post #496

Earlier quoted context omitted.

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.

The hypocrisy is that he's publicly taken a principled stance about paying taxes whilst actually going against that in private.

> Individuals try to minimize their taxes.

This is an oversimplification. For example, I might vote for a party that would raise my own taxes, and happily pay those taxes if I thought good use was being made of them.

Re: Paradise Papers: Dear Tim Cook

#687

Post by thanatropism »

chiefalchemist wrote: post #107
thanatropism wrote: post #70

Earlier quoted context omitted.

> The taxes paid would go towards infrastructure, education, health care and other items that benefit all people in our society, and by extension also to us shareholders. This assumes, of course, that governments can spend the money as efficiently as Apple.

It depends on the definition of efficient. Apple's et al would be obligated to invest for the benefit of shareholders; a small minority of the broader population. On the other hand, in theory, the government invests - and often simply spends (read: little concern for any sort of return) - for the broader good. On a personal note: What confuses me is when outfits like Apple complain about the quality of workers, yet a…

> On the other hand, in theory,

We basically agree -- in theory.

Re: Paradise Papers: Dear Tim Cook

#688

Post by slavik81 »

downrightmike wrote: post #676
slavik81 wrote: post #672

Earlier quoted context omitted.

> 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. This is a real problem in the US, too. The corporate tax rate is very high, but there's so many exemptions and deductions that few end up paying the headline rate. There's a lot of variation between businesses in what they pay. Lowering the tax rate and simplifying the tax code…

It used to be much higher: https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco... If companies want access to the best market in the world, they need to pay to be there.

I don't follow. I didn't suggest changing the average effective rate. There would be no change to the amount paid. I just suggested splitting it more fairly.

Re: Paradise Papers: Dear Tim Cook

#689

Post by libertyEQ »

specialist wrote: post #680
libertyEQ wrote: post #673

Earlier quoted context omitted.

~"Capitalism is the worst system ever devised except for all the others." ;) Until we get to a Star Trek-like unlimited resources, it is the best way to allocate our resources to properly incentivize progress and innovation.

The rhetorical trap we’ve fallen into is conflating capitalism with corporatism.

That's a distinction I haven't thought much about because I'm not sure I've contemplated the pure definitions. Without knowing how you mean these words, I would say starting from first principles, we optimize for liberty (at least in the US, YMMV). Then we consider factionalism, and it's usual cause: inequality (or it's mis-perception).

Re: Paradise Papers: Dear Tim Cook

#690

Post by gwenzek »

dalore wrote: post #588
chx wrote: post #565

Earlier quoted context omitted.

> 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. I am not even annoyed by that. I am an immigrant into Canada. We sort of made a deal: you let me into a place where I can live a safe and free life and I will pay my taxes leading to that. I stand by that deal. I had a company in Gibraltar (which, by the way, was completely lega…

A tax on earnings? Do you mean revenue? I think that's a bit insane and lot's of business wouldn't be able to survive. If I buy something for $100 and sell it for $110 I now have to pay tax on the $110 amount rather then the $10 amount, increasing my tax tremendously. For businesses with lot's of inventory that would be murder.

I think it would be the only solution, because it will always be easier to manipulate your benefits than earnings.

Although we could imagine something more complex: pay taxes on (revenue - expenses to compagnies that also pay taxes).

So now if you buy a product $100 to a company paying 25% taxes and sell it $110, you pay taxes on the $10, but if you buy your product to a company in some island, you pay taxes on the $110.

Smarter: if you buy to a company that pays a 20% tax while in your country you should pay a 30% tax, then you pay taxes on ($110 - $100*(30%-20%) = $20).

Everything get more complex but it's just a bit more CPU time.

Post reply on HN