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With spotlight on it & Apple, Ireland calls for worldwide tax crackdown - Page 2

post #41 of 55
The eternal debate... Except that it's proven that high tax countries have higher quality of life and better social indicators and lower disparity.

What you seem to be arguing is that the richer a company or individual is, the lower the rate of tax they should have to pay, in fact effectively no tax. Correct me if I'm wrong but this capitalist nonsense is all about protecting those that have money and allowing the richer to get richer and common folk to bear the brunt of the tax burden.

This is entirely against the principle of taxation. It's akin to stealing from the poor to feed the rich. Anyone that defends that is a pretty sick and twisted individual in my opinion.
Edited by s.metcalf - 5/22/13 at 8:42pm
post #42 of 55
Quote:
Originally Posted by s.metcalf View Post

The eternal debate... Except that it's proven that high tax countries have higher quality of life and better social indicators and lower disparity.

 

First, no such thing has been "proven." Second, the measures that go into what you think has been proven are highly subjective and variable. Finally, you're assuming a causal relationship when there may only be a correlative one.

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post #43 of 55
Quote:
Originally Posted by s.metcalf View Post

What you seem to be arguing is that the richer a company or individual is, the lower the rate of tax they should have to pay, in fact effectively no tax. Correct me if I'm wrong but this capitalist nonsense is all about protecting those that have money and allowing the richer to get richer and common folk to bear the brunt of the tax burden.

 

Not sure who you're replying to here. But the fact is that the progressive tax system is more of an anti-get rich tax scheme...one that actually protects the rich.

 

 

Quote:
Originally Posted by s.metcalf View Post

This is entirely against the principle of taxation.

 

Not sure what you mean by "against the principle of taxation." Do you assume that the whole purpose of taxation is to some how even people's incomes out? To socially engineer society in some economic way?

 

 

Quote:
Originally Posted by s.metcalf View Post

It's akin to stealing from the poor to feed the rich. Anyone that defends that is a pretty sick and twisted individual in my opinion.

 

I'm sure you feel this way, but you're arguing against a straw man here. No one is suggesting what you claim at all.


Edited by MJ1970 - 5/23/13 at 6:21am

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post #44 of 55
Quote:
Originally Posted by s.metcalf View Post

The eternal debate... Except that it's proven that high tax countries have higher quality of life and better social indicators and lower disparity.

What you seem to be arguing is that the richer a company or individual is, the lower the rate of tax they should have to pay, in fact effectively no tax. Correct me if I'm wrong but this capitalist nonsense is all about protecting those that have money and allowing the richer to get richer and common folk to bear the brunt of the tax burden.

This is entirely against the principle of taxation. It's akin to stealing from the poor to feed the rich. Anyone that defends that is a pretty sick and twisted individual in my opinion.

 

Reality Check: A very loud minority of Americans are self-absorbed dweebs who would sell their own kin down river if it meant a pay day, especially tax free.

post #45 of 55

This is how I believe Apple are avoiding paying tax in Europe and beyond.

 

All Apple Intellectual property is held in  Irish Apple subsidiaries.

When an Apple product is sold anywhere outside of the USA (not just Europe) the local Apple company (say in Germany or Korea or Mexico) pay a royalty to the Irish subsidiary, this reduces (or effectively transfers) any profit made on the sale to the Irish subsidiary where they pay a very low tax rate, believed to be 2%.

Local sales tax (VAT) is if course paid where the product is sold, including online sales. This arrangement is only in place for non US business activity.

More detail of this setup in the link below.

 

 

The focus of this thread has been mostly on how Apple stash their cash, after the taxes have been paid. And their reluctance to repatriate the profits.

I think they do this to avoid the 35% double-taxation they would have to pay in the US (double because tax has already paid)

Apple also in the past (Apple Ireland was incorporated in 1980) have relied on this stash of cash to survive, so the arrangement is at the core of Apple's survival strategy. They previously repatriated their stash to invest in new products when they were almost bust, there would probably be no iPhone if they didnt have this arrangement. So I believe caution should be taken in any attempt to change this.

 

I don't think that Apple are in any way wrong to do what they are doing and probably would not even exist anymore if they didn't.

 

 

http://www.irishtimes.com/business/sectors/financial-services/intellectual-property-rights-at-the-core-of-apple-s-irish-subsidiaries-1.1401739

post #46 of 55
Quote:
Originally Posted by FreeRange View Post

I'm sorry but your post is total nonsense. When I buy, or you buy, an Apple product online or in an Apple store, that purchase is taxed IMMEDIATELY at the local tax rate, which in my case, since I am an expat living in China, is 17%!!!!! What's more, the employees that designed that device, marketed it, sold it to me, are all paying taxes through the jobs that Apple gave them, as are the people and companies that made them, shipped them, service them, etc etc etc. And in Europe, including Spain, you pay an absolutely obscene VAT tax on the purchase, so Spain is collecting considerable taxes on these purchases already. The VAT tax in Spain is 21%, and in Ireland it is 23%!!!! Yes, these taxes are paid directly by consumers, but even more taxes should be paid, give me a break? No wonder Europe is in such deep shit! And if even more taxes are paid by the corporation, that too comes directly out of consumers' pockets in the form of higher prices, decreased dividends and yields on investments etc. It is our governments that are in fact out of control!

Well said and saved me the time!

If anyone is interested and too lazy to find the link, here are the EU VAT Rates... which are paid IMMEDIATELY (monthly) on every purchase of an Apple (or any!) product in it's respective country.
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post #47 of 55
@maestro64: as the EU should. It is, after all, an European (which means, if countries aren't european, they aren't part of it...) ECONOMIC Union, way, way before being somehow a political entity.
As for the reason for that economic entity, World War 2, World War 1, and the 1871 war come to mind...

It's not like the United States of America (an Union of States which are all on the northern American continent, you might have heard of the place) doesn't use/abuse their own economic power, towards, for exemple, Mexico, Yemen, Iran, or simply by flexing their debt as a weapon instead of a liability...

You can't blame countries and Unions of countries to act as they believe is best for their citizens. It is their role. That's why they exist.

You can blame corrupt or incompetent politicians, obviously, but not reality for the crime of being real...

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #48 of 55
Quote:
Originally Posted by SpamSandwich View Post

 

Quite right. Just look at how economic "incentives" have gutted our economy. There are always unintended consequences that go hand in hand with short-sighted laws.


"short -sighted" is a way to put it.

 

Another explanation might be given by an example or two. Did you know that in America, the President of microsoft, the very competent and extremely rich Steve Ballmer has spent tremendous efforts into making sure that very low taxes on the rich stayed a reality, even with the huge debt of the United States, instead of spending all his time helping Microsoft stay/become relevant in the phone/tablet market? Were you aware that in France, 90% of the top 40 companies heads went to the newly elected president to make sure that the new policies would not include higher taxes on their own salaries, when "unimportant" new retirement and company tax/incentives laws were supposed to be discussed? Did you know about the heavy lobbying of United Kingdom CEO's (finance world) on their salary taxes when that country has now extremely expensive tuition costs, on the middle of a tuition cost crisis?

 

"short-sighted" is a word. "manipulated" is another.

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #49 of 55
Quote:
Originally Posted by alanc View Post

This is how I believe Apple are avoiding paying tax in Europe and beyond.

All Apple Intellectual property is held in  Irish Apple subsidiaries.
When an Apple product is sold anywhere outside of the USA (not just Europe) the local Apple company (say in Germany or Korea or Mexico) pay a royalty to the Irish subsidiary, this reduces (or effectively transfers) any profit made on the sale to the Irish subsidiary where they pay a very low tax rate, believed to be 2%.
Local sales tax (VAT) is if course paid where the product is sold, including online sales. This arrangement is only in place for non US business activity.
More detail of this setup in the link below.


The focus of this thread has been mostly on how Apple stash their cash, after the taxes have been paid. And their reluctance to repatriate the profits.
I think they do this to avoid the 35% double-taxation they would have to pay in the US (double because tax has already paid)
Apple also in the past (Apple Ireland was incorporated in 1980) have relied on this stash of cash to survive, so the arrangement is at the core of Apple's survival strategy. They previously repatriated their stash to invest in new products when they were almost bust, there would probably be no iPhone if they didnt have this arrangement. So I believe caution should be taken in any attempt to change this.

I don't think that Apple are in any way wrong to do what they are doing and probably would not even exist anymore if they didn't.


http://www.irishtimes.com/business/sectors/financial-services/intellectual-property-rights-at-the-core-of-apple-s-irish-subsidiaries-1.1401739

Exactly!

Is it not ironic and sad, that due to the fact:
a) that Apple makes and sells products that people want to buy in recent years,
b) is very frugal with their investments... in essence SAVING their profits for a rainy day...
...that they are now being raked over the coals by the media, government and *uninformed Anarchists.

There's change in the air, and I would bet that Ireland will be the first to implement a change that mandates Apple and the other companies in the country to be resident. THEY will collect immediately 10-12%... and the US will be left with nothing due to their massive bureaucracy.

* Yesterday I posted a comment on the mega-thread at WP, pointing out the hypocrisy of the idiots pointing their fingers ONLY at the "Evil, Tax-dodging, Slave-Master Apple" while typing their sorry-assed and class-warfare remarks on...well... anything!

If it has Intel Inside, using Windows, Chrome or Linux, and a *bleapin'* keyboard and monitor...they are also supporting an "Evil, Tax-dodging, Slave-Master" of one kind or another. It just so happens that through the coercion (/s) of Apple creating the most sought after and profitable products, and because they are savers not spenders, that people see them as "being the worst" offender... which is far from the truth of the matter.

So in the public's uninformed mind-set, it is far better:
1) for a company to throw their money out the window by over-paying for a company,
2) making the board and officers of that company very rich,
3) toss the workers out in the name of synergy,
4) drive the business into the ground or ignore it,
5) then write the loss from the investment off of a future Tax Return to in effect... PAY NO TAXES!

Simple 5 Step Plan to transfer wealth "legally" and to avoid fair taxation in the US of A. Ask HP, MS, and Google.

But SAVING on the other hand: OMG! You are sooooo cheating! /s 1rolleyes.gif

Edited to add: NO... I do not think Apple or any of the companies should be labelled with "Evil, Tax-dodging, Slave-Master", as long as they are abiding by the laws that are on the books. If it can be proved that any of them are breaking the law, let them then... and only then... enjoy that title.
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post #50 of 55
As I always do, some food for thought:

What if TC and Oppenheimer went to the board of Apple and proposed lowering their prices 30-35% across their product range for a period of say, 2 years.

They easily have enough money, even if taxed in Ireland in the future, to weather that crush to profits, but thus denying the US of ANY taxes. Zero!

Not only would they just crush the market and their competitors, but they would be doing the "Dirty Dead Done Dirt Cheap" called Revenge with a tall order of "FU"!

It is in their right to do that, if they're so evil as many claim them to be.... as always... just sayin' 1smoking.gif
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post #51 of 55
Quote:
Originally Posted by Gazoobee View Post

That's so typically Irish.  

 

When caught, smile and be agreeable with the police. 

 

That's racist and I take offense at it.

post #52 of 55
Quote:
Originally Posted by Banalltv View Post

 

That's racist and I take offense at it.

 

I am Irish too but I don't think it was racist (as Irish people are not a distinct race).

I think the "smile and be agreeable" reference is about Irish charm :) so there really is no need to take offence.

 

Back to topic....

I don't believe Ireland has much influence or power over where this tax scandal is going to go so its just as well to stick to the charm over here anyway.

post #53 of 55
Quote:
Originally Posted by Frood View Post

 

 

That is the deviousness of offshoring though.  *Profits* made inside the US get taxed.

 

My gripe is with offshoring, not with Apple.  To hope to avoid 'fan hate' suppose a company named 'Goorapplesoft Electric' made stuff in China for $150, and sold it in the US for $650

 

Case 1:

 

Manufacture a good for $150 in China. 

Sell good to US consumer for $650 in US.

 

Profit = $500

Taxes due in US=  $500 x .035 = $17.5

Taxes due in Ireland = $0

Total taxes = $17.5

 

 

Case 2:

Manufacture a good for $150 in China.

Send good to Ireland for your subsidiary there to add their 'magic' to the good.

Have the Irish team 'sell' it to the US corp for $600

Sell good to US consumer for $650 in US.

 

Profit made in US:

$50 x .035 = $1.75

 

Profit made in Ireland:

$450 x .002 = $0.90

 

Total tax burden:  $2.65

 

If the CEO of the company paying $1.75 using case 2 said 'We pay every single dollar we owe on profits earned inside the USA" that would be an absolutely true statement.  The 'trick' is they only claim to have made $50 profit inside the US.  That Irish genius added most of the 'value' to the product and so most of the profits were made in Ireland, not the US.

 

The only downside to using that system is all the profits you made offshore can't be brought in to the actual country that provides all the benefits you receive without getting taxed.

 

Apple does use Case 1 for any product sold in both North and South America.  Full taxes paid.  They do NOT have the "Irish" team sell product back to the US.  All they do is what the EU allows them to do.  When a consumer purchases a product on-line in any european country a company is allowed to state that a particular product is being sold by a particular company, even if that company is based in a different country.  The EU then further states that the taxes are paid in the country where the company exists, and NOT where the product is actually sold.  Again, if people have to complain about how Apple, Google, Microsoft, etc. operate in the EU, they need to have the EU change it's laws so that taxes are paid in the country a product is bought in, and not where the company is located.

post #54 of 55
Quote:
Originally Posted by Frood View Post


That is the deviousness of offshoring though.  *Profits* made inside the US get taxed.

My gripe is with offshoring, not with Apple.  To hope to avoid 'fan hate' suppose a company named 'Goorapplesoft Electric' made stuff in China for $150, and sold it in the US for $650

Case 1:

Manufacture a good for $150 in China. 
Sell good to US consumer for $650 in US.

Profit = $500
Taxes due in US=  $500 x .035 = $17.5
Taxes due in Ireland = $0
Total taxes = $17.5


Case 2:
Manufacture a good for $150 in China.
Send good to Ireland for your subsidiary there to add their 'magic' to the good.
Have the Irish team 'sell' it to the US corp for $600
Sell good to US consumer for $650 in US.

Profit made in US:
$50 x .035 = $1.75

Profit made in Ireland:
$450 x .002 = $0.90

Total tax burden:  $2.65

If the CEO of the company paying $1.75 using case 2 said 'We pay every single dollar we owe on profits earned inside the USA" that would be an absolutely true statement.  The 'trick' is they only claim to have made $50 profit inside the US.  That Irish genius added most of the 'value' to the product and so most of the profits were made in Ireland, not the US.

The only downside to using that system is all the profits you made offshore can't be brought in to the actual country that provides all the benefits you receive without getting taxed.  

You should write novels. 1smile.gif

Explain to me why why every time I order something from Apple I get to track it from China to my door in Florida and I have't seen Cork mentioned once and the invoice is from Apple in CA? I suspect (and I'm just guessing here) Apple doesn't do what you suggest in option 2 for sales in the Americas.
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post #55 of 55

The world crying foul over Ireland's low tax rates sounds like the sore loser who gets a bad grade on an exam and accuses the person who scored the highest of cheating. I am disgusted with Congress. If they were really serious about "making corporations/wealthy pay their fair share," they would get their act together and pass some legislation to close those "evil loopholes" that are "depriving America of revenue." Instead, they're bashing another country for attracting business from American companies. 

 

I am disappointed in Ireland though, because instead of standing up for themselves, they're bowing down to pressure from Washington. But then again, it's national interest, because in the long-term, it may hurt if Washington decides to make life miserable for those companies doing business in Ireland. 

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