EU delays judgement on Apple's Irish tax deal as discovery proves 'time consuming'

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  • Reply 81 of 117
    melgrossmelgross Posts: 33,663member
    If you really want to get down to root causes, you'd have to go back to 1913 and the establishment of the Federal Reserve, which caused a hopelessly politically compromised currency and banking system to spring forth.

    If that final comment about "conservatives" was aimed at me, I believe you know by now that I'm a Libertarian, not a Republican.

    Further, I'm recommending that you voluntarily give up your Moderator status if you find it too tempting to insult posters with differing political views.
    I know a number of right wingers. Heck, some are friends of mine. In practical terms, I haven't found a big difference between right wing Republicans and Libertarians. Theoretical, yes, but not in a real world way. Libertarians are just a bit more extreme in some ways.

    Sorry if I insulted you. But the right wing is destroying this country day by day. I find that hard to take.
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  • Reply 82 of 117
    melgrossmelgross Posts: 33,663member
    Marvin wrote: »
    Laws aren't written up to grant a company no tax jurisdiction. It would be like quoting someone, taking it out of context and using it wrongly but claiming it's what they said. Even if it's technically true, people wouldn't accept it as a valid argument. It seems that they also had a tax deal for the rates based on the Irish jobs:

    http://www.theguardian.com/technology/2014/sep/30/apple-repay-millions-irish-government-tax-deal

    "Apple’s Irish tax rate has no rational basis; it was determined by what Apple was ‘prepared to accept’ – with the threat that it would cut jobs in Ireland if it didn’t get its way. That low tax rate came on top of Apple’s ploy of saying its three main Irish subsidiaries are not tax resident anywhere. Hopefully this finding will help persuade Congress that we should close the loopholes in our tax code that allow Apple-type gimmicks whose sole purpose is to avoid paying US taxes.”

    Coffey commented: “Apple owes a lot of taxes - but to the US government, not the Irish government.”"

    There's an estimate there of the amount due, which is less than 1 billion euros. I'm not sure why they say it's due to be paid to the US government but it might depend on the outcome of the tax jurisdiction decision. In the US hearing they asked where the operation was managed from and they said from the US. They can't get taxed in the US as the company was incorporated in Ireland and they can't get taxed in Ireland as it's operated from the US.

    The status of no tax jurisdiction will come to an end one way or another so the profits will either be paid to Ireland or the US. It could be a lot if it was decided to be the US tax rate.

    The money involved is small relative to the tax needs of the whole of Europe and also small relative to Apple's cash pile. If it was as low as $1b, Apple would be better off paying it and setting up a new deal with Ireland rather than having years of negative PR over it. It's not like they avoid US taxes significantly. They aren't against paying taxes on principle.

    Quite frankly, I find that hard to believe. Every jurisdiction around the world gives tax breaks to companies, primarily for the creation of jobs. To say that a link is untenable is patently ridiculous. We see companies given breaks that include free upgrading of services such as roads, water, power, etc. we also see a tax free period of often ten years, sometimes even more.

    Are we to believe that the EU is going after companies in the USA that are given these breaks? How about companies such as GE, which despite large profits, pay no taxes at all? Should this be the EU business as well, because GE operates in the EU?

    Where does it stop? They already have a final say on USA company mergers when they do business there, but do nothing to prevent the same kind of mergers between their own companies, especially when their governments force them. How about companies such as Airbus?

    Essentially, large companies have always been negotiating these breaks with governments. Ireland is such a small country that it's akin to Apple negotiating with a local authority here.

    If the EU isn't happy, then change the laws, and make sure that their own companies, and member states, obey them. But trying to get some quick cash by looking backwards isn't proper. But what about the EU that is proper? I find very little.
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  • Reply 83 of 117
    melgrossmelgross Posts: 33,663member
    "I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes; have no time to think, no means of calling the mismanagers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers. Our landholders, too, like theirs, retaining indeed the title and stewardship of estates called theirs, but held really in trust for the treasury, must wander, like theirs, in foreign countries, and be contented with penury, obscurity, exile, and the glory of the nation. This example reads to us the salutary lesson, that private fortunes are destroyed by public as well as by private extravagance. And this is the tendency of all human governments. A departure from principle in one instance becomes a precedent for a second; that second for a third; and so on, till the bulk of the society is reduced to be mere automatons of misery, and to have no sensibilities left but for sinning and suffering. Then begins, indeed, the bellum omnium in omnia, which some philosophers observing to be so general in this world, have mistaken it for the natural, instead of the abusive state of man. And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression."

    —Thomas Jefferson in a letter to Samuel Kercheval, 1816
    http://www.constitution.org/tj/ltr/1816/ltr_18160712_kercheval.html

    Yes, I've read that before. But two things. One is that Jefferson was a vast landowner, with many slaves. Once someone has slaves, then whatever else they have to say about human dignity needs to be taken into question. Unless you agree with his real world view on slavery, which was to own them.

    But being a major landowner, he, and others who founded this country, believed that only large landowners were capable of running it. You believe that as well, I assume. Indeed, the Constitution was designed, in part, to continue the dominance of those large landowners. They didn't trust the people, and that's why both Senators, as well as the President, were not elected by the People, but by electors, whose function wasn't to reflect the will of those People, but rather, prevent someone too radical to the landowners way of life, and leadership.

    The preservation of those large fortunes was also a major desire of the Founders. Something that I believe to be inimical to the entire concept of freedom we supposedly live under. There is no reason whatsoever why large fortunes should be left alone. The concept of allowing large fortunes to continue to grow over generations without restrictions would have already seen almost all of the wealth in this country concentrated in just a handful of families,

    But this is exactly what the right in this country wants. The tax policy they attempt to push would have exactly that outcome. It's alepready been happening. I would think that those who are not of that class, would see the dangers, but they've been too easily bambozzeled. I've got a couple of older friends who only listen to right wing talk radio. It's where they get all of their "news", and they believe everything they hear from that quarter. They vote against their own interests, even though neither has any money to speak of.

    Both regain and Bush really did a job on us. If anything, both can be said to agree with the long quote you posted here. It's a shame!
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  • Reply 84 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Quote:

    Originally Posted by Gatorguy View Post





    You expect a repatriated rate of less than 12%?

     

    I'm aware of only one proposal, supported by Barbara Boxer and Rand Paul (the "Invest In Transportation Act"), and that one recommends a rate of 6.5%.

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  • Reply 85 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Quote:
    Originally Posted by Crowley View Post

     

    ^ Please don't turn this into another misdirected rant against socialism, this thread is full of enough nonsense as it is.


     

    It can't be denied that socialism is unsustainable. Without an already functioning economy and without private property ownership, markets cannot function and wages and prices cannot be properly valued. Pure socialism leads to economic collapse and even the formerly Communist countries have transitioned toward more and more property ownership and models based on competition, albeit with intrusive government connections.

     

    Regrettably, as countries like China adopt more open markets and laws promoting property ownership to attract and retain investors and businesses, the US has adopted progressive policies in the Marxist school of thought favoring the labor movement. Perhaps the US and China are meeting politically at an unhappy halfway point because so much US debt is owned by China.

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  • Reply 86 of 117
    crowleycrowley Posts: 10,453member

    ^ Get out of town.  You're not really going to start a rant tangent against EU "socialism" and then back it up with diatribe against "pure" socialism are you?  Really?  

     

     

    Barely even worth pointing out the ridiculousness.  Get off your soapbox, no one cares about your ignorance.

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  • Reply 87 of 117
    gatorguygatorguy Posts: 24,686member
    I'm aware of only one proposal, supported by Barbara Boxer and Rand Paul (the "Invest In Transportation Act"), and that one recommends a rate of 6.5%.
    And you expect that to pass? There's several proposals floating around with ideas on how to approach the problem of taxes and off-shore subsidiaries. Dem. Senator Carl Levin has one he's been pushing too that IMHO has just as little a chance of becoming law.
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  • Reply 88 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Quote:

    Originally Posted by melgross View Post





    I know a number of right wingers. Heck, some are friends of mine. In practical terms, I haven't found a big difference between right wing Republicans and Libertarians. Theoretical, yes, but not in a real world way. Libertarians are just a bit more extreme in some ways.



    Sorry if I insulted you. But the right wing is destroying this country day by day. I find that hard to take.

     

    I accept your apology without reservation.

     

    You mentioned that you find Republicans and Libertarians similar, which makes sense if one accepts Glenn Beck and his ilk as being Libertarians (I don't accept this premise). There are a lot of neo-conservative Republicans who claim they are Libertarian, but I believe many fail to adopt basic liberty principles. If one is socially liberal AND fiscally conservative, that's the most basic test which gets a thumbs-up from me.

     

    Neo-conservatives and progressives/socialists use force to make people follow their dictates. I believe BOTH major parties are responsible for plowing the country under because each has plainly violated the letter and the spirit of the Constitution (in my opinion) in the pursuit of votes and power. I'm in favor of across-the-board term limits, for reining in the unconstitutional powers that were given to the president under Bush and expanded under Obama, and I'm for drastically cutting the power and reach of the Federal government, to levels more in line with the original intent of the Constitution.

     

    There is a gulf between our political beliefs, but I don't consider you anything less than a friend and value your opinions.

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  • Reply 89 of 117
    Marvinmarvin Posts: 15,524moderator
    melgross wrote: »
    Every jurisdiction around the world gives tax breaks to companies, primarily for the creation of jobs. To say that a link is untenable is patently ridiculous.

    Low rates and other incentives are given in return for jobs etc. What I find hard to believe is that not having any tax jurisdiction would have been intentional. That essentially means allowing a corporation to exist with no tax authority at all, forever and it requires using the laws of two countries against each other.
    melgross wrote: »
    Are we to believe that the EU is going after companies in the USA that are given these breaks? How about companies such as GE, which despite large profits, pay no taxes at all? Should this be the EU business as well, because GE operates in the EU?

    It depends if GE's subsidiaries are incorporated somewhere in the EU.
    melgross wrote: »
    Where does it stop? They already have a final say on USA company mergers when they do business there, but do nothing to prevent the same kind of mergers between their own companies, especially when their governments force them. How about companies such as Airbus?

    It's a mutual agreement, the US can block anti-competitive mergers of foreign companies too:

    http://www.justice.gov/atr/public/speeches/260273.htm
    http://blogs.reuters.com/great-debate/2013/07/08/the-mysterious-agency-that-can-block-a-global-merger/

    "Spurred by the adoption of the European Merger Regulation in 1989, the U.S. agencies and the European Commission recognized that they would have to work together more often and more closely because large, multinational mergers would commonly come under their simultaneous review."

    Every merger is different and they won't all be found to be anti-competitive.
    melgross wrote: »
    If the EU isn't happy, then change the laws, and make sure that their own companies, and member states, obey them. But trying to get some quick cash by looking backwards isn't proper. But what about the EU that is proper? I find very little.

    If the loophole hadn't existed, Apple would have paid the tax rate and nobody would have minded. It's not like Apple's setup was an honest mistake, the setup is very elaborate with the intention of avoiding paying tax. The IRS is involved with Apple too, it's not just an EU issue:

    http://www.zdnet.com/article/apples-long-irs-irish-history/

    If some of Apple's Irish subsidiaries are found to have US tax jurisdiction then they pay taxes to the US, not Ireland. I wouldn't agree with backdating if Apple had paid say 5% due to some explicit incentive that was later removed and they requested the full 12.5%. Using the laws of two countries against each other to avoid tax is an entirely different issue.
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  • Reply 90 of 117
    crowleycrowley Posts: 10,453member
    ^ totally agree.

    You know what decent people do when they see a broken law? They write to their representative to get it fixed. They lobby or campaign if necessary. They don't exploit it for personal gain. Same applies to companies.
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  • Reply 91 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Quote:

    Originally Posted by Crowley View Post



    ^ totally agree.



    You know what decent people do when they see a broken law? They write to their representative to get it fixed. They lobby or campaign if necessary. They don't exploit it for personal gain. Same applies to companies.



    I'd like to know what is a "broken law", exactly? There is no such thing as one-size-fits-all legislation and what's good for one group of people may be at odds with another. Laws are formed and compromised on in a rivalrous process of give and take. Sometimes the balance of power that is supposed to prevent any one special interest or branch of government from amassing too much influence is defeated by horse-trading or due to an imbalance in party dominance.

     

    Laws are written, amended and passed because the constituents of the political representatives want something. I consider most laws and the departments which enforce them needless and essentially a means of fending off or advancing one special interest over another.

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  • Reply 92 of 117
    crowleycrowley Posts: 10,453member

    I'd like to know what is a "broken law", exactly? There is no such thing as one-size-fits-all legislation and what's good for one group of people may be at odds with another. Laws are formed and compromised on in a rivalrous process of give and take. Sometimes the balance of power that is supposed to prevent any one special interest or branch of government from amassing too much influence is defeated by horse-trading or due to an imbalance in party dominance.

    Laws are written, amended and passed because the constituents of the political representatives want something. I consider most laws and the departments which enforce them needless and essentially a means of fending off or advancing one special interest over another.
    Don't be obtuse. A system of laws that allows a company to be tax resident nowhere is clearly broken. No system is purposefully designed to allow that.
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  • Reply 93 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Quote:

    Originally Posted by Crowley View Post





    Don't be obtuse. A system of laws that allows a company to be tax resident nowhere is clearly broken. No system is purposefully designed to allow that.



    Tax havens have been around for a long time:  https://en.wikipedia.org/wiki/Tax_haven#Former_tax_havens

     

    ...and there will continue to be tax havens, no matter how often countries attempt to threaten, extort or blackmail.

     

    It's bizarre that the countries in question never do the obvious thing, which is to minimize taxes on businesses, which would enable them to attract more investment capital, instead of forcing companies under threat of legal action. The carrot approach is better for all involved.

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  • Reply 94 of 117
    crowleycrowley Posts: 10,453member
    Ireland, low tax though it may be, is not a tax haven. It does not trade in secrecy and it has a clear rate of corporation tax. It intends for corporations to pay corporation tax. It does not intend for corporations to use a gap in the rules to slip in between Ireland and the USA and be tax resident nowhere. To suggest such is patently absurd and grasping.

    Apple knows this.
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  • Reply 95 of 117
    crowleycrowley Posts: 10,453member
    And tax competition doesn't always work out well for such tax havens. Look into the shithole Jersey is in right now, for example.

    The "carrot" is infrastructure, a skilled workforce, and stability. All things rare in low tax regimes.
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  • Reply 96 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Quote:

    Originally Posted by Crowley View Post



    And tax competition doesn't always work out well for such tax havens. Look into the shithole Jersey is in right now, for example.



    The "carrot" is infrastructure, a skilled workforce, and stability. All things rare in low tax regimes.



    You really should use the handy-dandy "Quote" button. It's on the lower right-hand side.

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  • Reply 97 of 117
    crowleycrowley Posts: 10,453member

    ^ I'm free to not do so, if I so choose.

     

    Given that I'm responding directly to you with no other posts in between, I don't think it's necessary and it adds additional text for me, you, and others to scroll past.  I don't much care for unnecessary scrolling.

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  • Reply 98 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Quote:

    Originally Posted by Crowley View Post

     

    ^ I'm free to not do so, if I so choose.

     

    Given that I'm responding directly to you with no other posts in between, I don't think it's necessary and it adds additional text for me, you, and others to scroll past.  I don't much care for unnecessary scrolling.




    To be honest, I usually ignore your posts anyway.

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  • Reply 99 of 117
    crowleycrowley Posts: 10,453member
    ^ Evidence suggests you don't. Nice posing though.
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  • Reply 100 of 117
    Marvinmarvin Posts: 15,524moderator
    Tax havens have been around for a long time:  https://en.wikipedia.org/wiki/Tax_haven#Former_tax_havens

    ...and there will continue to be tax havens, no matter how often countries attempt to threaten, extort or blackmail.

    Tax havens wouldn't exist any more if they taxed income based on the buyer's location. It wouldn't matter where you moved the money, the tax would be due to the country the sale was made in. When you have a group of countries and some of them are tiny like Montenegro with 620k people then their public expenditure is low. It's 1.56b euros vs $3.6t for the US, £1.5t UK. If Apple passed $40b through Montenegro in a year, Apple alone could cover their budget with a less than 4% tax rate. The problem with this is they've taken advantage of the infrastructure in every other country and not put a portion of their income towards it. They are supporting employees who pay income tax and they are convincing customers to spend money who pay sales tax so just being in operation is helping but tax only works effectively when it takes a portion of all income - sales, employees and corporate profits.
    It's bizarre that the countries in question never do the obvious thing, which is to minimize taxes on businesses, which would enable them to attract more investment capital, instead of forcing companies under threat of legal action. The carrot approach is better for all involved.

    Can't imagine why:

    http://money.cnn.com/2015/01/11/pf/taxes/kansas-tax-cuts/

    It's so obvious, you just bankrupt the country and you shut down schools and hospitals and everybody's happy. As you've pointed out many times, people act in their self-interest. If you give them tax cuts and they have no need to grow the business, they simply pocket the extra. Apple can't spend its cash fast enough that even after massive buybacks, it has $200b in assets. If giving them tax breaks would result in spending, why hasn't that already happened? Tim said that they have nothing to spend their money on, they looked at big acquisitions and none of them looked particularly attractive. Companies would also just fund things that benefit themselves directly, stable economies need to fund far more than the interests of individual companies.
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