Coffeehouse Thread

106 posts

Democrat and Republican lambasted Apple for working the system in a way they said was unfair, if not unpatriotic.

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  • JohnAskew

    http://news.cnet.com/8301-13579_3-57585449-37/lawmakers-lambaste-apples-tax-strategy-as-an-absurdity/ While I am an admitted MS camper, and a detractor of all things Apple, I'm much more anti 'too-big-to-care' corporations which put themselves above nation states, like the insurance and banking industries. I didn't see it coming from any technology corporation, this sucks, guys. Apple is obviously too big to care about the USA.

  • Ray7

    Both MS and HP were hauled over the coals by the same people for the same thing: http://www.reuters.com/article/2012/09/20/us-usa-taxes-offshore-idUSBRE88J0VY20120920 They can lambast all they want; the problem is that these companies are not doing anything illegal. The answer seems simple enough: make it illegal.

  • wkempf

    - "I would hope this turns out to be a great teaching lesson on how dysfunctional the architecture of our tax system is," he ( Gary Hufbauer) continued. "But it's more likely that we'll learn an easier lesson: That Apple is being a bad boy." (http://www.theatlantic.com/business/archive/2013/05/of-course-apple-avoids-billions-in-taxes-and-it-should/276078/)

    I'm not saying I'm happy about the situation, but I can't really formulate any anger over a company (or an individual) that avoids taxes legally. If the system is broke, fix the system, don't complain that someone has exploited it to their advantage. That's human nature, and not necessarily a bad thing. Now, if they find that Apple has illegally avoided taxes, that will be a different game all together, and I'll join you in you're ire and indignation.

  • vesuvius

    Most companies have Accountants, the better they are, the more they can save you money. the best accountants are the "best" at evading tax

  • Ray7

    The committee has already said that Apple isn't doing anything illegal (which is why they are being so careful to call it tax avoidance and not tax evasion).

  • Ray7

    @vesuvius: Accountants who are evading tax are in prison. The good ones are avoiding tax. 

  • davewill

    From what I've heard so far it sounds like simple competitive taxing to me.  If one jurisdiction charges 10% and another charges 2% then work out of the one with 2% to keep costs low.

    Those senators need to realize that they are competing with other taxing authorities and they need to get competitive.

  • Dr Herbie

    This is an issue in the UK, too.  Currently Google are making the headlines being called 'immoral' by a parliamentary committee, but Microsoft and Amazon are accused also.

    The upcoming G8 summit will address these issues on international tax avoidance, with a new to curbing it.

    Herbie

  • evildictait​or

    I don't have a big issue with accountants turning your 23% corporation tax into 20% corporation tax by being clever and tax efficient. That's part of the game, and whatever.

    do have a problem with companies turning their 23% corporation tax into 0.005% corporation tax by blatantly off-shoring all of their profits in ways that the tax system was clearly not designed to deal with.

    How can we encourage entrepreneurs to start companies when you have to pay taxes if you're small, but big companies can undercut little ones not just with economies of scale, but by choosing to not pay taxes at all? It's completely anti-competitive, and it's bad for society and the economy.

    Apple, Amazon, Microsoft and Google's CFOs should really all have to defend in front of a jury of their peers why they think paying taxes is optional. And if they can't defend why the accounts they signed off is reasonable, legal, and not tax evasion, those CFOs should really be put in a jumpsuit and put behind bars.

    Little company's directors go to jail when the little company doesn't pay tax. And you don't have to send many CFOs of major companies to jail before they all start filing proper tax returns.

  • wkempf

    , evildictait​or wrote

    And if they can't defend why the accounts they signed off is reasonable, legal, and not tax evasion, those CFOs should really be put in a jumpsuit and put behind bars.

    Define reasonable? It's already been decided it's legal and not tax evasion, and doing something illegal is the ONLY reason CFOs should be put in a jumpsuit and put behind bars. You're anger is misplaced, quite frankly. Turn it towards the governments that don't fix the tax laws that are clearly broken.

  • evildictait​or

    , wkempf wrote

    Define reasonable? It's already been decided it's legal and not tax evasion, and doing something illegal.

    I define it the same way that the legal profession does. Put it to a jury. Let them decide whether the tax-return is a valid representation of the company's tax affairs, or whether they are fabricated financial structures designed to avoid the paying of taxes that parliament and the treasury intended and expect companies to pay.

    If we decide whether someone goes to jail by presenting the jury with evidence and them deciding if a law was broken, why can't we do the same with CFOs and blatantly tax-evading tax returns?

     

  • vesuvius

    , Ray7 wrote

    @vesuvius: Accountants who are evading tax are in prison. The good ones are avoiding tax. 

    Ah, in finance evasion is trickery!

  • blowdart

    , evildictait​or wrote

    If we decide whether someone goes to jail by presenting the jury with evidence and them deciding if a law was broken, why can't we do the same with CFOs and blatantly tax-evading tax returns?

    There's a difference between evading (breaking the tax laws) and avoiding (taking advantage of loopholes). Avoidance is legal and does not need a jury. That's for the tax office to decide, according to their own rules.

  • dahat

    , evildictait​or wrote

    *snip*

    I define it the same way that the legal profession does. Put it to a jury. Let them decide whether the tax-return is a valid representation of the company's tax affairs, or whether they are fabricated financial structures designed to avoid the paying of taxes that parliament and the treasury intended and expect companies to pay.

    If we decide whether someone goes to jail by presenting the jury with evidence and them deciding if a law was broken, why can't we do the same with CFOs and blatantly tax-evading tax returns?

    Interesting world you live in... where if someone does something you don't like... they should be thrown before a jury to decide if it was actually illegal or not... never mind the costs involved (on both sides of such a system.

    Unrelated, you have routinely offended my sensibilities on this site, I demand that you be hauled before a jury to answer for your 'crimes'.

    First amendment you say? Isn't it for the jury to decide if you are actually violating some law which may be invented or discovered later.

  • vesuvius

    @evildictaitor: I think it is the moral high-ground, they think because they generate so much revenue in employing people and wages, profits are off limits.

    In some ways the noise Governments are making, is the same that the largest software corporations are making, trying to ensure they generate 30% revenue via App Stores.

    I see no difference technically, the result is the same, innovation and entrepreneurship are thwarted

     

  • evildictait​or

    , dahat wrote

    Unrelated, you have routinely offended my sensibilities on this site, I demand that you be hauled before a jury to answer for your 'crimes'.

    If the US government wishes me to stand trial for anything it so chooses me to stand trial for, I will be arrested and compelled to attend court.

    For example: If I choose to pay 0.0005% income tax this year, I expect by the end of the year I will be wearing a particularly fetching orange jumpsuit in one of the US government's many fine custodial establishments.

    Claiming that all of your Starbucks establishments aren't making any profits (and hence don't need to pay any taxes) when what's actually going on is that you're making sh1ttons of profits, opening several stores a week, reporting to your shareholders how well you're doing, but are cleverly selling your UK/US companies coffeebeans from an office in Switzerland at $20 a bean to trick the tax man isn't valid tax accounting.

    You think I could get away with saying to the US government "Oh, I didn't earn any money this year. I was paid in magical rent vouchers which I exchange with my landlord who is paid by my company through some opaque bank account in the Cayman Islands in some clever deal to avoid me having to pay tax on the rent that I would otherwise need to pay" that that would wash with the US government? Of course not. That would be "go to jail" time for me for tax evasion.

     

    If you're a company, you should pay taxes on your profits - the tax system is actually quite specific on this. Pretending that you didn't make profits in this country when you clearly did by doing opaque accounting isn't optimising your taxes, or making use of tax schemes that government put there to encourage other parts of the economy. It's deceptive, it's fraudulent, and it requires straightforwardly misleading the tax authorities about how your business is structured for the sole purpose of avoiding tax. It's tax evasion, not tax avoidance. And it's legal only because it's hard to prosecute, not because it's what the lawmakers think is reasonable. And CFOs that take part in this sorry game should be spending time behind bars.

     

    The reason this pisses me off isn't because I want to punish big companies, or think they're evil. It's that I think it's not fair for small businesses and entrepreneurs to have to pay tax at full rate (or go to jail) whilst working opposite a multinational that can't be bothered to pay tax.

    We should be encouraging small businesses. Not giving them a 20% tax penalty compared with their multinational competitors. It's criminal that we allow this to continue.

  • cbae

    They need to raise the alternative minimum tax rates for corporations to prevent this kind of monkey business.

  • Bass

    The whole idea of a "corporate income tax" is silly to begin with. Corporations should pay taxes on real assets (real estate, etc.) but the idea of income only really makes sense for natural persons.

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