Nobel-Winning Economist Calls Apple's Irish Tax Arrangement 'Fraud'

Discussion in 'Politics, Religion, Social Issues' started by MacRumors, Jul 29, 2016.

  1. MacRumors macrumors bot

    MacRumors

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    Joseph Stiglitz, an economic professor at Columbia University and 2001 recipient of the Nobel Memorial Prize in Economic Sciences, has described Apple's tax arrangements in Ireland as "a fraud" in a recent interview with Bloomberg TV.
    Under current U.S. laws, Apple is able to shift billions of dollars in profits to Ireland, where it operates multiple subsidiaries, sheltering those earnings from up to a 35 percent corporate tax rate in the United States. Ireland has a much lower corporate tax rate of 12.5 percent, but Apple is believed to have a sweetheart deal with Ireland that sees it pay less than 2 percent in exchange for creating jobs in the country.

    Apple has been the subject of a European Commission probe related to its Irish tax arrangements since June 2014, with the executive body investigating whether the deal constitutes illegal state aid. Ireland's finance minister Michael Noonan recently said he expects a decision to be reached by September or October, and Apple could owe more than $8 billion in back taxes depending on the outcome.

    Apple insists it is the largest taxpayer in the world and that it pays every cent of tax it owes under current laws. In a late 2015 interview with 60 Minutes correspondent Charlie Rose, Apple CEO Tim Cook described tax avoidance accusations against the company as "political crap," adding that the United States has a tax code that is "awful for America" and "made for the industrial age."

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    Apple provided the following statement during its March 2016 meeting with the European Parliament's tax committee:
    Apple is only one of several multinational corporations that have been scrutinized for possible corporate tax avoidance in Europe over the past few years, with others including Amazon, Google, IKEA, and McDonald's. Last year, the European Commission ordered Starbucks and Fiat Chrysler Automobiles to each pay up to EUR30 million in back taxes, after ruling that the companies benefited from illegal tax deals.

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    Article Link: Nobel-Winning Economist Calls Apple's Irish Tax Arrangement 'Fraud'
     
  2. applesith macrumors 68030

    applesith

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    Either lower the corporate tax to encourage companies to keep their cash in the US, or just cut the crap and find a way to seize it or tax them to death like the gov really wants.

    Has this guy left his desk to actually build something or does he decide to call fraud just from his ivory tower without ever getting his hands dirty?
     
  3. sbrhwkp3 macrumors 6502a

    sbrhwkp3

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    Time to lower the corporate tax rate in the US. The repatriation of funds would be massive, and we'd see a huge boom in economic growth as a result. I bet the change would even be revenue neutral.
     
  4. EricTheHalfBee Suspended

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    Lowering your taxes through legal means and obeying the law is not fraud, no matter what this guy says.
     
  5. TigerWoodsIV macrumors 6502a

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    Agree with the previous posts. The US needs to lower its corporate tax rate already. It's not a surprise companies do this, why would they want to give away money they don't have to? Apple isn't a charity, and if the law allows them to pay less, the shareholders would expect them to do it.
     
  6. bladerunner2000 macrumors 68000

    bladerunner2000

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    That's because it IS fraud. Apple doesn't want to pay it's share of taxes and never will because nobody cares to hold them accountable. Worse yet, this thread WILL have fanboys being apologetic about it and defending Apple....

    Think about that; cheering on a corporation worth billions that evades taxes.
     
  7. barkomatic macrumors 68040

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    One of the wondrous effects of globalization. There's always a cheaper place to park your capital and workforce thanks to both Republicans and Democrats.
     
  8. Wiesenlooser macrumors 6502a

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    It is not fraud in a legal sense but it certainly is not fitting with Apple's "we want to make the world a better place narrative".

    Even if they think the taxes are too high - since when is it theirs to judge ? Shouldn't that be a matter of democracy? And there will always be a cheaper place in order to avoid taxes.

    Either way: Being the most profitable company in the world and operating worldwide and then trying to evade taxes in order to pay two bucks fifty In taxes is -while not illegal- simply not right.
     
  9. verpeiler macrumors 6502a

    verpeiler

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    ..in before hundreds of fanboys defending Apple's stance... ;-)

    *grabs popcorn*
     
  10. usarioclave macrumors 65816

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    Even a Nobel Prize winner doesn't understand how the tax code works.
     
  11. v0lume4 macrumors 65816

    v0lume4

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    I don't think that it's right for Apple, or any company for that matter, to deliberately store money off shores to avoid taxes.

    Now, on the other side of the coin, the reason that companies do this is to avoid seemingly unreasonable taxes imposed by our governments (the US, in this case). I don't blame Apple, as I know that if I owned a successful business that was getting taxed out the ying-yang, I'd be doing the same thing. I believe that if tax rates were fair for large corporations, we would see significantly less--if any--off shore cash hoarding. Maybe the problem is the system, and not Apple (or any other large corporation).

    Disclaimer: I'm no economist and I might be entirely misinformed about what I just discussed. :D
     
  12. keysofanxiety macrumors 604

    keysofanxiety

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    Not fraud by the letter of the law. It's perfectly legal. Quite obviously fraud by the spirit of the law. But then who would willingly pay more than they legally have to?

    Sort out the law so you don't have a reason to complain.
     
  13. nikhsub1 macrumors 68000

    nikhsub1

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    True, very true. The old cliche of, "Don't hate the player, hate the game" applies here.
     
  14. applesith macrumors 68030

    applesith

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    What laws are apple breaking?
     
  15. Tycho24 Suspended

    Tycho24

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    #15
    Having a cash repatriation "holiday" in the USA perhaps once a year would be an incredible boon to our economy; why would we choose to punish our companies by double taxation, then complain that it discourages repatriation??
     
  16. JeffyTheQuik macrumors 68020

    JeffyTheQuik

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    "Nobel Winning Economist"

    Is that a compliment or an insult?
     
  17. DrewDaHilp1, Jul 29, 2016
    Last edited: Jul 29, 2016

    DrewDaHilp1 macrumors 6502a

    DrewDaHilp1

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    #17
    Obama won a Nobel, how many people has his administration killed? So maybe the Nobel isn't what it used to be? Apple's one and only objective is to produce results for it's share holders. Searching for and finding a place with lower taxes helps that objective.
     
  18. JeffyTheQuik macrumors 68020

    JeffyTheQuik

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    I don't think it's right for a country to demand that anyone pay more that 10% in taxes.

    There, we have the basis for our argument.
     
  19. Wiesenlooser macrumors 6502a

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    None. But then again - not every fraud is illegal. What is with all that pseudo-medicine you can buy that is trying to convince you that it will make your fitter/slimmer/healthier.

    It might not be illegal - but it certainly is mean spirited. Can't say I blame them - they do it because they CAN legally do it. But it is no behavior they should be proud of.
     
  20. mytdave macrumors 6502

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    Oh the big bad Apple! Waaaaah! Try every corporation in the free world has an office in Ireland. This is because of the stupidity of horrible tax law. End the progressive tax agenda, write and pass a responsible corporate tax bill (w/low rate) without loopholes, and countless problems will be solved. But there's no political will. There are too many people in power getting their palms greased to keep things the way they are. So, stop blaming corporations and point your fingers instead to the source of the problem: Government.
     
  21. Wiesenlooser macrumors 6502a

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    Not really. The law is the law and it is "right" that everyone pays the taxes according to it.
     
  22. applesith macrumors 68030

    applesith

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    This is about tax fraud- not selling pills on an infomercial. If there was true tax fraud going on, you bet the government would be after apple. No one wants to pay more taxes then they are legally obligated. No one.
     
  23. sportsfan macrumors regular

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    But what would be low enough? It's a race to the bottom. Apple uses a lot of the US infrastructure and Gov't protections for it's business. That is expensive for the US to maintain...something Ireland or other small countries do not have to fund.

    If the US lowers their rate, then some other small country will just undercut the US again...because the small country does not have the infrastructure expense the US has....that Apple is using!
     
  24. Wiesenlooser macrumors 6502a

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    He did not mean fraud in a legal sense. You can say it isn't fraud if it is legal. I can say not every behavior that is legal is a good behavior.

    And I have to ask you: do you honestly believe that he US or other countries like Germany can undercut th taxes into countries which business model it is to be a tax haven?
     
  25. Jambalaya macrumors 6502a

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    Tax rates are 15% in Ireland and Apple don't even pay that. Apple's behaviour is a disgrace.
     

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