France to hit Apple, other tech giants with new digital tax in January

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Comments

  • Reply 21 of 78
    bb-15bb-15 Posts: 249member
    These taxes, only targeted at companies from one nation, are a type of tariff. Several countries have extra tariffs/fees for Apple products.
    These cost barriers are a trade war tactic. They slow down trade and overall will eventually cause a weaker economy with the countries involved.

    edited December 2018 entropys
  • Reply 22 of 78
    croprcropr Posts: 914member
    JanNL said:
    So in the EU it’s not allowed to lower unilaterally/for one company taxes (Ireland), but raising taxes unilaterally (France) ís  allowed?
    Indeed

    France can raise taxes as long as the tax is applicable to all companies, selling the same kind of services or goods.  If France would only target Apple Google and Facebook, this would be illegal

    The tax agreement between Apple and Ireland failed to the above mentioned criterium.  Apple paid less than 0.01% of its profits, while the standard is 12.5%

    spice-boy
  • Reply 23 of 78
    Europe is so insanely over-taxed as it is. Something's going to give when so many governments are getting so bloated.
    But corporate profits NEVER get so bloated?
  • Reply 24 of 78
    spice-boy said:
    Good for France and other "woke" nations. For those that are crying on Apple's behalf each nation has rules for those that live and earn income within that country. Apple and other tech giants have reaped massive amounts of money and by exploiting loopholes in the tax laws have managed to avoid paying what other business' are already paying.

    Yes Spam there is such a thing as "fair share" it is what the tax laws say is fair and not what a fan boy says it is for poor, little Apple. 

    Not Apple's fault that the loopholes exist.  I would take advantage of them too
  • Reply 25 of 78
    Those who live by taxes die by taxes. List of historical acts of tax resistance. https://en.wikipedia.org/wiki/List_of_historical_acts_of_tax_resistance
    SpamSandwich
  • Reply 26 of 78
    steven n.steven n. Posts: 1,108member
    spice-boy said:
    Good for France and other "woke" nations. For those that are crying on Apple's behalf each nation has rules for those that live and earn income within that country. Apple and other tech giants have reaped massive amounts of money and by exploiting loopholes in the tax laws have managed to avoid paying what other business' are already paying.

    Yes Spam there is such a thing as "fair share" it is what the tax laws say is fair and not what a fan boy says it is for poor, little Apple. 

    Exploiting loopholes? You mean companies are following the convoluted laws the governments set up to solicit favor with specific constituents? 
    stompyradarthekat
  • Reply 27 of 78
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes since they'll make even more profit?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance? I have zero doubt that Apple has already computed the optimal prices for their products, right to the final dollar to maximize its profits. Raising them more because France wants a bit of what they are paying as a corporation to end up in French accounts for French use rather than Irish ones would be counter to that. 

    If I'm off-base maybe you can explain.

    EDIT: It seems after doing a bit'o reading that the claim companies simply raise prices is more a FUD-ism than fact. I guess it gets repeated so much that some folks just accept that it must be true. 
    https://economix.blogs.nytimes.com/2013/02/19/who-pays-the-corporate-income-tax/
    Same zombie-like FUD argument always applied by the same voices to increasing minimum wage. 
  • Reply 28 of 78
    Corporate status itself, and all of the various protections/advantages it brings, comes from the government itself and is only possible with the government. Thus all the whining about taxes is ultimately moot. 
    That’s more or less accurate, however nothing prevents people from entering into voluntary associations without the coercion or “protection” of government.
  • Reply 29 of 78
    So end users pay a sales tax when they purchase a phone. The cell service is also subject to taxation. Online services like Apple Music are taxed. In the US we also pay a state and Federal universal service fund fee which is essentially another tax.

    If I subscribe to a paper or magazine it is taxed. If I purchase something from an online store it is taxed. The electricity that charges the phone is taxed.

    All is paid for with earned or investment income that is also taxed.

     And yet it is not enough for the governments of the world that want to tax everything that moves or stands still.

    Apparently the only things not taxed are religion and begging, both of which are often scams and are non-productive drags on the economy.  From a logical standpoint it makes no sense- taxing productive economic activity and giving a free ride to people selling invisible products or just taking.

    I am not a tax protester, but can easily understand those who are.
    radarthekatrandominternetperson
  • Reply 30 of 78
    sdw2001sdw2001 Posts: 16,937member
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes since they'll make even more profit?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance? I have zero doubt that Apple has already computed the optimal prices for their products, right to the final dollar to maximize its profits. Raising them more because France wants a bit of what they are paying as a corporation to end up in French accounts for French use rather than Irish ones would be counter to that. 

    If I'm off-base maybe you can explain.

    EDIT: It seems after doing a bit'o reading that the claim companies simply raise prices is more a FUD-ism than fact. I guess it gets repeated so much that some folks just accept that it must be true. 
    https://economix.blogs.nytimes.com/2013/02/19/who-pays-the-corporate-income-tax/
    I'm sorry, but this is one of the most misinformed posts I've seen here in some time. Are you actually arguing that estimating tax liability is not possible? You do realize that individuals and corporations do this every single day, right? And as for corporations' responses to taxes, it seems you're unaware of reality. A corporation isn't some piggy bank. They don't just sit around like Scrooge McDuck, count their millions and just absorb costs. They aren't going to have tax rates affect their profits. They respond according the laws of real economics. They will ensure their bottom line in many possible ways, including raising prices and cutting costs (including jobs as necessary). Do you really think Apple would pay, say, a new 10% VAT our of pocket? Really?
    radarthekatrandominternetperson
  • Reply 31 of 78
    gatorguygatorguy Posts: 20,267member
    sdw2001 said:
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes since they'll make even more profit?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance? I have zero doubt that Apple has already computed the optimal prices for their products, right to the final dollar to maximize its profits. Raising them more because France wants a bit of what they are paying as a corporation to end up in French accounts for French use rather than Irish ones would be counter to that. 

    If I'm off-base maybe you can explain.

    EDIT: It seems after doing a bit'o reading that the claim companies simply raise prices is more a FUD-ism than fact. I guess it gets repeated so much that some folks just accept that it must be true. 
    https://economix.blogs.nytimes.com/2013/02/19/who-pays-the-corporate-income-tax/
    I'm sorry, but this is one of the most misinformed posts I've seen here in some time....
    Do you really think Apple would pay, say, a new 10% VAT our of pocket? Really?
    VAT is not an Apple-paid tax, simply collected from end-users and remitted, so the irony of your post is blaring. 
    edited December 2018
  • Reply 32 of 78
    nhtnht Posts: 4,429member
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes since they'll make even more profit?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance? I have zero doubt that Apple has already computed the optimal prices for their products, right to the final dollar to maximize its profits. Raising them more because France wants a bit of what they are paying as a corporation to end up in French accounts for French use rather than Irish ones would be counter to that. 

    If I'm off-base maybe you can explain.

    EDIT: It seems after doing a bit'o reading that the claim companies simply raise prices is more a FUD-ism than fact. I guess it gets repeated so much that some folks just accept that it must be true. 
    https://economix.blogs.nytimes.com/2013/02/19/who-pays-the-corporate-income-tax/
    "Probably most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices.

    All economists reject that idea. They point out that prices are set by market forces and the suppliers of goods and services aren’t only C-corporations, which pay taxes on the corporate tax schedule, but also sole proprietorships, partnerships and S-corporations that are taxed under the individual income tax. Other suppliers include foreign corporations and nonprofits."

    Explain to me which "sole proprietorships, partnerships and S-corporations" competes with Apple, Google, etc?  None.  There are also no foreign corporation that are in the same league as the targeted US companies.

    If French taxes are higher then these companies can and will charge French consumers more than for other consumers for these services.  Since the tax is levied against all providers then unless demand is very elastic there isn't anything to keep that from happening.

  • Reply 33 of 78
    These companies must have expected that this tax was the only long term outcome of their tax avoidance schemes. Countries need tax income to function and if the economic parties operating in their borders legally avoid paying taxes then the laws will change. Google, for example, could take money from a French company to advertise their products in a French media outlet to French eyeballs and yet because they bank the cheques in Ireland, they think they didn't need to pay French tax. If they want to benefit from revenue from a developed society like France, they need to contribute to that society. 
  • Reply 34 of 78
    gatorguy said:
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance?

    If I'm off-base maybe you can explain.
    It's called "math".  You plug in the percentages and magnitude of the taxes, fees, tariffs, excise, "because we said so" payments, manufacturing costs, etc, decide how much profit you want, then voila the magic of math gives you the answer as to what price to charge.

    Taxes will always be passed on to the consumer, no matter what form they might take.
    Apple's desired margins, almost assuredly maxed out to yield the greatest profits as most corporations try to do,  are pre-tax not post aren't they?  Raising them further would potentially harm sales and not help, leading to lower profits.  

    EDIT: Another link that explains why the oft-repeated claim is mostly false:
    https://www.huffingtonpost.com/dave-johnson/tax-tricks---do-corporati_b_541709.html
    WOW Huffpost. I would trust a link from Breitbart almost as much. Get a real source buddy.
  • Reply 35 of 78
    nhtnht Posts: 4,429member
    gatorguy said:
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance?

    If I'm off-base maybe you can explain.
    It's called "math".  You plug in the percentages and magnitude of the taxes, fees, tariffs, excise, "because we said so" payments, manufacturing costs, etc, decide how much profit you want, then voila the magic of math gives you the answer as to what price to charge.

    Taxes will always be passed on to the consumer, no matter what form they might take.
    Apple's desired margins, almost assuredly maxed out to yield the greatest profits as most corporations try to do,  are pre-tax not post aren't they?  Raising them further would potentially harm sales and not help, leading to lower profits.  

    EDIT: Another link that explains why the oft-repeated claim is mostly false:
    https://www.huffingtonpost.com/dave-johnson/tax-tricks---do-corporati_b_541709.html
    "This tax trick is based on a popular assumption that businesses can just raise prices whenever they want to. But a well-run business is already charging what they should charge for their product or service. If they have room to raise prices they should already have done so. But of course doing so this will cause them to lose sales to competitors."

    A new tax changes the formula for what should be charged since costs have increased to meet a profit goal.  Competitors face the same tax and must therefore also modify either costs or pricing to achieve the same financial performance.  This article is even more hand wavy than the prior one and doesn't explain anything.

    The argument that you don't know what profit you will make until the end of the year and therefore can't adjust pricing is fallacious.  You know what the rate will be and corporations provide estimates on what their expected net profits (post tax) will be.  What the heck do you guys think the guidance is for.  Here's was Apples 3Q guidance:
    • revenue between $60 billion and $62 billion
    • gross margin between 38 percent and 38.5 percent
    • operating expenses between $7.95 billion and $8.05 billion
    • other income/(expense) of $300 million
    • tax rate of approximately 15 percent before discrete items
    What stockholders care about is their own benefit and that's not based on gross profits (pre-tax) but net profits (post-tax).

    Corporate taxes are paid by some combination of stockholders (reduced growth or dividends), workers (reduced wages) or consumers (increased prices).  

    Corporate behavior is driven by stockholders even to the detriment of long-term corporate health.  So which group do you think is least impacted by corporate taxation?

    Hint:  It's not the consumer or worker.

    And for companies like Apple, Google, Facebook, etc, salaries and benefits are largely inelastic ESPECIALLY when unemployment is so low.

    That leaves who to pay the bulk of the increased cost?
    radarthekatrandominternetperson
  • Reply 36 of 78
    The tragic thing about taxes is not that they exist or are high but how wastefully the generated resources are managed by the governing bodies. This is the true failure of socialism and it will never change.
    radarthekatSpamSandwich
  • Reply 37 of 78
    gatorguygatorguy Posts: 20,267member
    nht said:
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes since they'll make even more profit?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance? I have zero doubt that Apple has already computed the optimal prices for their products, right to the final dollar to maximize its profits. Raising them more because France wants a bit of what they are paying as a corporation to end up in French accounts for French use rather than Irish ones would be counter to that. 

    If I'm off-base maybe you can explain.

    EDIT: It seems after doing a bit'o reading that the claim companies simply raise prices is more a FUD-ism than fact. I guess it gets repeated so much that some folks just accept that it must be true. 
    https://economix.blogs.nytimes.com/2013/02/19/who-pays-the-corporate-income-tax/
    "Probably most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices.

    All economists reject that idea. They point out that prices are set by market forces and the suppliers of goods and services aren’t only C-corporations, which pay taxes on the corporate tax schedule, but also sole proprietorships, partnerships and S-corporations that are taxed under the individual income tax. Other suppliers include foreign corporations and nonprofits."

    Explain to me which "sole proprietorships, partnerships and S-corporations" competes with Apple, Google, etc?  None.  There are also no foreign corporation that are in the same league as the targeted US companies.

    If French taxes are higher then these companies can and will charge French consumers more than for other consumers for these services.  Since the tax is levied against all providers then unless demand is very elastic there isn't anything to keep that from happening.

    This is a tax on "digital services" AFAICT. Depending on the details this might have negligible to zero impact on companies like Samsung and Huawei or force a price increase in their handsets. Apple's ability to simply raise their iPhone prices and pass their French taxes on without also pricing themselves further away from competitors may be limited.

    Wait for details to see who this actually affects but the acronym for the tax is pretty telling : GAFA, named after Google, Apple, Facebook and Amazon 
    edited December 2018
  • Reply 38 of 78
    JWSCJWSC Posts: 320member
    Europe is so insanely over-taxed as it is. Something's going to give when so many governments are getting so bloated.
    Many in the US, including myself, used to ridicule European countries frequently for their high tax burdens.  Sadly, we can no longer do so.  The US Government’s (fed, state and local) hunger for our hard earned money has outstripped Europe as a whole.  Lesson: don’t throw rocks if you live in a glass house.
  • Reply 39 of 78
    JWSC said:
    Europe is so insanely over-taxed as it is. Something's going to give when so many governments are getting so bloated.
    Many in the US, including myself, used to ridicule European countries frequently for their high tax burdens.  Sadly, we can no longer do so.  The US Government’s (fed, state and local) hunger for our hard earned money has outstripped Europe as a whole.  Lesson: don’t throw rocks if you live in a glass house.
    That’s an assertion so easily disproven, I don’t know why anyone would even make it.

    https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rates
    radarthekat
  • Reply 40 of 78
    nhtnht Posts: 4,429member
    gatorguy said:
    nht said:
    gatorguy said:
    jbdragon said:
    Corporations don't pay taxes, YOU DO!!! So you tax them more, they will just raise prices and YOU are the one that's actually paying.
    If they raise prices then wouldn't that obligate them to even more taxes since they'll make even more profit?

    Besides that how do you raise prices after the sale occurred? Corporate taxes are paid on profits, which can only be determined after a sales period has closed.  How would you know how much to add in advance? I have zero doubt that Apple has already computed the optimal prices for their products, right to the final dollar to maximize its profits. Raising them more because France wants a bit of what they are paying as a corporation to end up in French accounts for French use rather than Irish ones would be counter to that. 

    If I'm off-base maybe you can explain.

    EDIT: It seems after doing a bit'o reading that the claim companies simply raise prices is more a FUD-ism than fact. I guess it gets repeated so much that some folks just accept that it must be true. 
    https://economix.blogs.nytimes.com/2013/02/19/who-pays-the-corporate-income-tax/
    "Probably most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices.

    All economists reject that idea. They point out that prices are set by market forces and the suppliers of goods and services aren’t only C-corporations, which pay taxes on the corporate tax schedule, but also sole proprietorships, partnerships and S-corporations that are taxed under the individual income tax. Other suppliers include foreign corporations and nonprofits."

    Explain to me which "sole proprietorships, partnerships and S-corporations" competes with Apple, Google, etc?  None.  There are also no foreign corporation that are in the same league as the targeted US companies.

    If French taxes are higher then these companies can and will charge French consumers more than for other consumers for these services.  Since the tax is levied against all providers then unless demand is very elastic there isn't anything to keep that from happening.

    This is a tax on "digital services" AFAICT. Depending on the details this might have negligible to zero impact on companies like Samsung and Huawei or force a price increase in their handsets. Apple's ability to simply raise their iPhone prices and pass their French taxes on without also pricing themselves further away from competitors may be limited.

    Wait for details to see who this actually affects but the acronym for the tax is pretty telling : GAFA, named after Google, Apple, Facebook and Amazon 
    And what competitors to GAFA would not be taxed and therefore able to take Digital Services consumers from GAFA?  None. 

    So who prevents GAFA from raising prices of movies, music, etc in France to cover the tax?  Samsung and phone prices are simply you trying to muddy the waters since they aren't competing with GAFA in digital services.  So not them.

    So who are the competitors in your "pricing themselves further away from competitors" statement?  

    As I said, unless demand is very elastic for digital services there's not a whole lot to prevent GAFA from pushing the costs onto the French consumer.  It's just another tariff. 

    What's the impact of $200B worth of tariffs against Chinese goods is pushed completely onto the American consumer?  About $60 a year.

    https://www.nytimes.com/interactive/2018/07/12/upshot/trade-war-cost-families.html

    Maybe there would a few French consumers that would reduce spending but not likely very many if the French economy is stable.  

    Further, some of the consumers of some of the GAFA companies are advertisers and not citizens.  Do you think they're really going to be that price sensitive and who are the competitors they will move to to reach the same demographics?
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