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

[B4U]

When the law is stupid and people are circumventing it, how is that committing a crime?

Let's make all interstate highways' speed limit to 35 mph and trap everyone trying to go 50 mph...

 

[rdlink]

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.

Legal tax avoidance is not evading taxes. Evading taxes is illegal. Apple is not evading taxes, and this has nothing to do with "fanboyism." I would support Google, Dell, GM, Ford, or any other American-based multinational taking advantage of these LEGAL means to protect their capital. This is not about some rogue corporations evading. This is about a government (and its citizens) that refuses to live within its means, and doesn't see the need to compete in a global economy.

Lower and less burdensome tax rates, and economic policies that foster investments in their home country is what is needed. Not more oppressive and punitive laws for corporations who do the same thing in principle that you do by claiming your charitable contributions and mortgage interest. Should people who don't own homes be upset with you because you're taking money from the government fund by claiming those deductions, and accuse you of "evading" taxes?

This misguided notion that there are somehow morals to be wrapped around a tax code is utterly ridiculous. There is nothing moral or immoral about charging or paying taxes. There is legal or illegal. If Apple and other corporations are following the law as it is written at the time of their actions they are only looking out for the best interest of their shareholders, and living within the framework provided by their nation's laws.

Grow up.
[doublepost=1469894840][/doublepost]

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.

You're right. And that is a wonderful thing. Only through globalization will you see the citizens of traditional third world countries begin to gain wealth and freedom.

 

[jnpy!$4g3cwk]

Legal tax avoidance is not evading taxes. Evading taxes is illegal. Apple is not evading taxes, and this has nothing to do with "fanboyism." I would support Google, Dell, GM, Ford, or any other American-based multinational taking advantage of these LEGAL means to protect their capital. This is not about some rogue corporations evading.

I agree. Although we obviously don't agree about corporations-- I think the big monopolies are out of control more or less-- I still don't expect corporations to voluntarily pay more taxes than they are legally required to. We need to fix the tax laws. Accusing corporations, and people, of committing crimes because they did not donate extra money in taxes is ridiculous.

This is about a government (and its citizens) that refuses to live within its means, and doesn't see the need to compete in a global economy.

I think you are mostly wrong. Social security taxes pay pensions to old people which keeps them out of poverty. It has been incredibly successful. Likewise, Medicare has been very successful in allowing access to healthcare for old people. Medicare is not sustainable in its current form. People are living an extra 7 years, in part due to Social Security and Medicare. These programs are a victim of their own success.

But, I still don't expect corporations to volunteer to pay more in taxes than they are legally required to.

 

[teknikal90]

This is more meaningless SJW feel-good mumbo-jumbo. The law defines what Apple's fair share is. They've paid what they owe under the law, ergo they've paid their fair share. If you think that share is not "fair" enough, change the law.

That's why this guy is going on the news about it.. Why do you think he is saying all this to the media and saying about there's likely public consensus about this issue. Did you read the article?

 

[0098386]

There certainly are plenty of fellow Nobel Prize winning economists on this forum. Who knew?

I do think Apple's attitude breeds contempt. If they can do what they can to avoid paying fees, then why don't I tell a few white lies to get discounts on equipment? Or buy things through a company to avoid paying tax? Sounds like a good idea to me.
[doublepost=1469900206][/doublepost]

This is more meaningless SJW

SJW?

 

[H2SO4]

Good rebuttal.

Touche.

Your response was ridiculous. Everything is paid for by the consumer. Everything.

 

[jnpy!$4g3cwk]

Schools and roads are paid for ar the county and state level. Fedgov spends it on a bunch of stuff very few agree with.

But, they don't always agree on what they don't agree with. Social Security and Medicare are paid for out of the very same SS and Medicare taxes. I and many others agree that it is appropriate for the Fedgov even if they would like to make changes. But, when you get to discretionary spending, the elephant in the room is military spending. About 60% of Fedgov spending goes directly or indirectly for the military. Some people feel that is way too much, other people feel it is too little. This is where most personal and corporate income taxes go towards paying:

 

[Khedron]

Those who think Apple's behaviour is acceptable since not technically illegal are probably the modern equivalent of those who defended slavery on the basis that black people weren't technically people in the eyes of the law.

"No one wants to (pay more taxes/give people more rights) than they have to!"

 

[jnpy!$4g3cwk]

Those who think Apple's behaviour is acceptable since not technically illegal are probably the modern equivalent of those who defended slavery on the basis that black people weren't technically people in the eyes of the law.

"No one wants to (pay more taxes/give people more rights) than they have to!"

Your analogy doesn't hold up. If people didn't want to modify the tax laws because their favorite company would have to pay more, that would fit better. But, that isn't what we are talking about here-- in the original article, the word fraud was used, implying that a crime was committed.

 

[jaymzuk]

Apple is not avoiding paying taxes. Not sure why this concept is so hard for so many people to understand.

Apple is avoiding paying taxes.

They're artificially lowering profits in higher taxation nations (Such as the UK, with a 20% rate), by paying royalty fees to their companies in lower taxation nations (Ireland, at 12.5%). In that example, they're avoiding paying 7.5% on their profits.

It's called tax avoidance. It's legal. Tax evasion is illegal. If they change the law to disallow this loophole, then the same trick will move from being tax avoidance to tax evasion.

The concept isn't difficult at all, especially for a chartered accountant.

 

[Stewie]

Apple is avoiding paying taxes.

They're artificially lowering profits in higher taxation nations (Such as the UK, with a 20% rate), by paying royalty fees to their companies in lower taxation nations (Ireland, at 12.5%). In that example, they're avoiding paying 7.5% on their profits.

It's called tax avoidance. It's legal. Tax evasion is illegal. If they change the law to disallow this loophole, then the same trick will move from being tax avoidance to tax evasion.

The concept isn't difficult at all, especially for a chartered accountant.

A chartered account should know there is a difference between tax avoidance and avoiding taxes.

 

[kcirtap00]

Touche.

Your response was ridiculous. Everything is paid for by the consumer. Everything.

Exactly my point. If Apple has to pay higher taxes, the consumer ends up paying the price.

 

[Solomani]

More than likely Apple would just raise their prices to maintain the massive amounts of profits they are making, and more than likely….

….more than likely you don't have a clue about corporate economics.

 

[jaymzuk]

A chartered account should know there is a difference between tax avoidance and avoiding taxes.

You either use tax avoidance (legal), or tax evasion (illegal). Avoiding taxes is vague phrase that doesn't mean anything in particular, and could quite easily encompass both tax avoidance and tax evasion, both of which are real terms that people actually use.

 

[Admiral]

Like I originally stated. The courts say it's fraud, hence the reason they launched the investigation. If they didn't think there was any fraud, would they have launched an investigation?

I don't think you understand legal process.

 

[Rocketman]

But, they don't always agree on what they don't agree with. Social Security and Medicare are paid for out of the very same SS and Medicare taxes. I and many others agree that it is appropriate for the Fedgov even if they would like to make changes. But, when you get to discretionary spending, the elephant in the room is military spending. About 60% of Fedgov spending goes directly or indirectly for the military. Some people feel that is way too much, other people feel it is too little. This is where most personal and corporate income taxes go towards paying:

Of course the problem is non-discretionary spending, and raiding trust funds.

 

[341328]

"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."

Fraud... sounds more like corruption.

 

[Macist]

If Ireland's role is scuppered by the EU Commission, the UK is now a free country and I'm sure could offer Apple a great place to do business.

 

[macgabe]

You mean like Germany, the closest to communist country as you can get in the world today where all the big business from car industry, consumer products, communications services to freakin DHL are state owned and operated. Yes your favorite T-Mobile is owned and operated by German government or your favorite BMW.

No, Germany is not a communist country or even close. Most would probably call it a social democratic country where private enterprise and labour unions are both well represented. Interestingly Germany loses very few days to strikes because unions understand that putting the company first is good for them. Many BMW workers drive BMWs.

Where all the big business from car industry, consumer products, communications services to freakin DHL are state owned and operated. Yes your favorite T-Mobile is owned and operated by German government or your favorite BMW.

No, T-Mobile (Deutsche Telecom) and BMW are both publicly listed companies. If you like them you can buy shares in them just like Apple. Incidentally, I would bet that both those companies paid far lower tax rates in the US than Apple did last year. DT was of course fully government owned and operated at one point, like all telephone companies around the world, but Germany, like Britain, France, Netherlands, etc all followed the American free-market model and floated the companies on public exchanges, generally to great success. Germany does have a small stake in DT and I believe Bavaria has a stake in BMW - many capitalist countries have sovereign wealth funds which buy shares in public companies.

Communism has nothing to do with this really nor second favorite term socialism.

Yes it does, it's all about tax burden, which is the defining difference between communist/socialist economies and free-market economies. Socialists believe in higher taxes. And that's what this argument is all about.

Double taxation? Well you wouldn't be double taxed if you didn't take the money out of country trying to save money, end of story.

No, the money was never in the US to begin with. They have just delayed bringing it to the US after the sale of an iPhone (or whatever) was made in a foreign country. Apple pays a very high tax rate (at least 35%) on sales in the US - that is not even under discussion here.

Its a fraud to all Apple employee in US

Completely lost you here - what about all Apple employees that are not in the US? What about all the US pension funds like Calpers that own huge stakes in Apple. How will making them poorer, and therefore their future retirees poorer, "benefit communities"? What about all Apple employees that own Apple shares?!

By the way Apple has also paid out over $100 b in dividends in the last few years. All that is taxed by the US govt at personal rate (mine is 35%), no matter where the Apple shareholder lives. In fact because their profits have been declining, their dividend payout has actually been greater than current earnings (hopefully it will not remain this way!). If you include tax on dividends the true effective tax rate for Apple is very high indeed - well over 35%. Those billions do not even count as Apple's taxes, even though the money is taken directly from the payout from Apple profits. That amount likely dwarfs 90% of US companies. Apple doesn't have to pay a dividend - they only started a few years ago, Google, Facebook, Netflix, Amazon don't pay dividends - they could just buy back stock. Doing so would cut the US Treasury out of a huge slice of Apple profits. Totally legally. Be careful what you wish for.

Some Americans really don't know how lucky they are. Though all countries are desperately trying to create equivalents, there are no equivalents to San Jose, San Francisco, Cupertino and Seattle around the world. No country with companies like Google, Ebay, Apple, Paypal, Facebook, Netflix, Tesla, Twitter, Snapchat, etc etc etc. It's not that other countries don't have the brains. It's that everyone goes to America to get their idea executed, or gets bought out by an American company. The only other country coming close is China…

And for those who think that a Nobel prize means "you must be right" (his Nobel prize was not given for his ideas on tax policy!) what about all the Nobel economists who vehemently disagree with Stiglitz on tax repatriation!

 

[H2SO4]

Exactly my point. If Apple has to pay higher taxes, the consumer ends up paying the price.

LOL, what a joker.
Look, if they pay more tax the consumer that buys their goods pays more. But if they pay less tax we all suffer, unless that is you are a member of a scummy thieving corporation.

 

[BaldiMac]

http://iphone.appleinsider.com/arti...se-loophole-apple-uses-to-avoid-high-us-taxes

"... The process involves setting up an Irish subsidiary, such as Apple's headquarters in Cork, which is paid profits on products sold in the U.S. as royalties on patents owned by the company. ... "​

[doublepost=1469891108][/doublepost]

Wish granted, the loophole is closed with companies currently using it having a grace period to stop. http://iphone.appleinsider.com/arti...se-loophole-apple-uses-to-avoid-high-us-taxes

Again, Americas income has nothing to do with the double irish strategy. Double irish minimizes taxes on foreign income. Keeping foreign income in foreign corporations keeps it from being taxed in the US. Under current laws, of course.

 

[hayesk]

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?

Two things:

1. "Better place narrative": if you can claim it's not fitting then arguing what Ireland or the US would spend that tax revenue is up for arguing which makes a better narrative.

2. A matter of democracy? Democracy is what enabled the tax laws exist in the first place.

Bottom line, you, me, and everyone else will use whatever legal means to lower our taxes. Be it setting up an office in Ireland or counting that USB drive as a "business expense." We all do it, and if we feel it's not right, then the proper solution is to lobby politicians to change the laws.

 

[Huntn]

Two things:

1. "Better place narrative": if you can claim it's not fitting then arguing what Ireland or the US would spend that tax revenue is up for arguing which makes a better narrative.

2. A matter of democracy? Democracy is what enabled the tax laws exist in the first place.

Bottom line, you, me, and everyone else will use whatever legal means to lower our taxes. Be it setting up an office in Ireland or counting that USB drive as a "business expense." We all do it, and if we feel it's not right, then the proper solution is to lobby politicians to change the laws.

Exactly, as a generality, corporate morality is profits, and profits only. They will do what they are allowed to do. It's up to our goverment to reign corporations in, but how is that accomplished when Americans are electing Representatives who appear to be in more in love with corporate profits, then doing right by average people, i.e., no interest in social programs as if they believe society will keep chugging along to support an inequitable system for the majority?

 

[IGI2]

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".

If I had the power like Apple I would also duck the taxes in my country because they are insanely inappropriate and avoiding them together with other people could mean the beginning of some liberty movement which could actually help other companies and market in general.

I think it can be done under the motto "we want to make the world a better place".

 

[shareef777]

I don't think you understand legal process.

Says some random guy on the internet. Please enlighten me. But before you do, let me put on my headphones. But go on, I'm listening.