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

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  • User profile image
    Kental2

    , Bass wrote

    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.

    I actually agree with this, but I think most people feel that "big evil corporations" need to "pay their fair share" which means if they make more than 1% profit they aren't being taxed enough Tongue Out

  • User profile image
    cbae

    , Bass wrote

    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.

    Corporations are people too, my friend.

  • User profile image
    GoddersUK

    1) @ OP: The legal system cares not whether something is fair or patriotic, simply whether or not it is legal. In fact a legal system that compelled me to be fair or patriotic would be a very worrying legal system indeed.

    2)

    , evildictait​or wrote

    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.

    By changing our tax laws. The only people to blame for this are our legislators. (Or our enforcement organisations, in cases where evasion has occurred but not been prosecuted.)

    3)

    , 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?

    That works all very well for something simple, such as "was it reasonable to club that burglar over the head with a frying pan?" where the question being asked is essentially "would you have done so?", but the problem here is that accountancy, particularly for large, modern, global companies, is highly complex and technical. A layman on the jury may struggle to follow where the money's going, what "legitimately" isn't taxable under our complex tax systems etc. I think it's also true that a layman would not really be able to define "reasonable" within such a specialist field.

    In fact the typical practice in highly technical cases is that the judge will instruct the jury along the lines of "if you find that company x knowingly and deliberately told HMRC that money y  was invested in fashion z and therefore not subject to tax m, despite it coming from source n which should be taxed according to law p then you must find them guilty".

    Juries are as bound to rule according to the law and, for reasons I hope go without saying, reliable. predictable, accountable enforcement of the law is the only course of action that should ever be open. Vague and woolly laws with haphazard enforcement that depends only on the mood of the jury will just increase the risk (and therefore cost) of business, drive people away from conducting business in the jurisdiction and hurt the economy as a whole.

  • User profile image
    GoddersUK

    , Kental2 wrote

    *snip*

    I actually agree with this, but I think most people feel that "big evil corporations" need to "pay their fair share" which means if they make more than 1% profit they aren't being taxed enough Tongue Out

    I must admit it's an interesting idea which I've entertained more than once. If, for simplicities sake, we imagine a company that operates solely in one jurisdiction then it would seem easy to avoid all this by simply taxing individuals incomes directly. Any gain in profit by the company would either become shareholder income, increased staff wages, increased staffing levels, or funnelled back into the economy via other purchases/investments until it reached someone's pocket so you'd get to tax it all anyway.

  • User profile image
    Bass

    , Kental2 wrote

    *snip*

    I actually agree with this, but I think most people feel that "big evil corporations" need to "pay their fair share" which means if they make more than 1% profit they aren't being taxed enough Tongue Out

    The corporation itself is just a group of natural people bound by some legal documents. Any time a natural person benefits from the success of a corporation they get taxed. Dividends, capital gains from selling stock, and salaries and bonuses are all taxed.

    IMO increase taxes on luxury goods (yachts, multiple expensive cars, jet planes, etc.) and on big houses and private airports to discourage conspicuous consumption amongst rich people. Sales and property taxes also have the benefit of being a lot harder to get around.

  • User profile image
    cbae

    , Bass wrote

    *snip*

    IMO increase taxes on luxury goods (yachts, jet planes, etc.) and big houses to discourage conspicuous consumption amongst rich people. Sales and property taxes also have the benefit of being a lot harder to get around.

    I don't understand the point of luxury taxes. Having money socked away by rich people is bad for the economy. Encouraging rich people to spend increases the opportunity for others to benefit from the flow of money. Not to mention it increases sales tax revenues for the local economy.

    Granted, if the purchase of luxury goods only works to shift money back and forth between rich people, that's not such a good thing, but my guess is that there are some $15/hour workers who played a role in manufacturing that Rolls-Royce or Bentley or Maybach.

    OTOH, raising corporate taxes encourages corporations to reinvest to grow revenues organically, since they get a tax write-off. Then this happens, the money circulates to other companies whom said company purchases products and/or services from or to hiring more employees.

    When it becomes easier to make money by just having money, that's when companies just sit on their asses and think of more clever ways of just retaining what they earned.

  • User profile image
    Proton2

    .

    IMO increase taxes on luxury goods (yachts, multiple expensive cars, jet planes, etc.) and on big houses and private airports to discourage conspicuous consumption amongst rich people. Sales and property taxes also have the benefit of being a lot harder to get around.

     

    This was tried on luxury boats and it destroyed the luxury boat business, putting a lot of people out of work.

    http://www.nytimes.com/1991/07/21/nyregion/new-luxury-tax-trimming-boat-sales.html

     

  • User profile image
    JohnAskew

    Tax avoidance is unpatriotic for the biggest corporation in the USA. During WWII, the rich paid 78% income tax rate. What happened? No love.

  • User profile image
    elmer

    When lawmakers get it wrong they resort to 'morals' and 'ethics' as excuses, rather than simply fixing the law.

  • User profile image
    evildictait​or

    , elmer wrote

    When lawmakers get it wrong they resort to 'morals' and 'ethics' as excuses, rather than simply fixing the law.

    How do you "fix the law" of companies being multinational and shuffling all of their money through foreign bank accounts in order to prevent your national government from seeing where the money goes to avoid paying taxes?

    It can't be done.

    Companies either need to be taxed on revenue, or CFOs need to be put in jail for deliberately evading taxes.

    To be clear: This is not companies being "tax efficient" and going from 20% to 18% tax globally by grouping sales across divisions or something reasonable.

    This is companies offshoring profits by fabricating business lines so that profit that is actually made in the US or UK "appears" on the books to be made in offshore tax havens (by selling fake products from the tax havens to the onshore companies, such as extortionate coffee-beans, or "brand licences") in order to move their profits out of the reach of on-shore governments.

    I take a simple approach to this: It's immoral, it's completely opposed to the concept of taxation that our democratically elected leaders intended, what the treasury wants, and what the people of our countries think is reasonable; it's based on deliberate evasiveness and semi-fraudulent action by constructing fictitious sales between group companies to off-shore profits. And the people that lose are the entrepreneurs and small-businesses who aren't big enough to off-shore their profits or pay off lawmakers.

    This is corruption. This is not good business practice. It's bad for the economy. It's bad for society. It's bad for capitalism. And we need to put people who lie to the IRS into jail, because it's not fair on the rest of us who live by the rules of society that those mega-corporations at the top opt-out of paying tax.

  • User profile image
    Bass

    , Proton2 wrote

    *snip*

     

    This was tried on luxury boats and it destroyed the luxury boat business, putting a lot of people out of work.

    http://www.nytimes.com/1991/07/21/nyregion/new-luxury-tax-trimming-boat-sales.html

     

    I feel like that's a bit like the broken window fallacy.

  • User profile image
    GoddersUK

    , evildictait​or wrote

    *snip*

    How do you "fix the law" of companies being multinational and shuffling all of their money through foreign bank accounts in order to prevent your national government from seeing where the money goes to avoid paying taxes?

    It can't be done.

    Simply you create laws compelling them to give you that information. If they won't give it punish them. Ultimately you can stop them from doing business in your jurisdiction. Of course that won't stop them exporting stuff to your country, but you can make your tax up on the import duty.

    As an example you could draft a law that says (note, IANAL, so this won't be perfect):

    "Any sales to UK consumers where either the organisation's sales or fulfilment infrastructure is based in the UK shall be considered subject to UK tax as per laws x, y and z." - Booyah Amazon.

    or

    "Debts paid by a subsidiary of a company to another instrument of that company shall not be considered losses for tax purposes." Gotcha, Starbucks.

    To be clear: This is not companies being "tax efficient" and going from 20% to 18% tax globally by grouping sales across divisions or something reasonable.

    This is companies offshoring profits by fabricating business lines so that profit that is actually made in the US or UK "appears" on the books to be made in offshore tax havens (by selling fake products from the tax havens to the onshore companies, such as extortionate coffee-beans, or "brand licences") in order to move their profits out of the reach of on-shore governments.

    Really? And how do you draw the line between this type of practice and the photo processing companies and DVD retailers that used to be based in the Channel Islands? The fact is it's a continuum scale with no easy lines to draw. Choosing extreme examples to give an illusion otherwise doesn't change that.

    It's immoral

    As I said to the OP our legal system does not give a flying monkey's derrière about morality. It is solely concerned with legality. Let me explain why:

    Homosexuality is immoral.

    The death penalty is immoral.

    Hijabs are immoral.

    The BNP are immoral.

    Marxists are immoral.

    Austerity is immoral.

    Above are a series of statements (not necessarily my own views) that I think there could be people we would consider "reasonable" who would hold views both agreeing with and contradicting with each of those statements. Morality may be absolute (I certainly believe it is) but we have no universal, objective system for determining it. You are suggesting the courts should rule on the basis that *you* think something is immoral. Well I'm sorry, but we don't run our country based on the divine right of evildictaitor.  

    This is corruption. This is not good business practice. It's bad for the economy. It's bad for society. It's bad for capitalism.

    And, thus, we solve it with regulation and legislation. A company's only inherent obligation is to maximise return on investment for its shareholders. If we want them to behave in a certain we have to set rules that maximise return for the behaviour we want.

    And we need to put people who lie to the IRS into jail, because it's not fair on the rest of us who live by the rules of society that those mega-corporations at the top opt-out of paying tax.

    We already do. It's called fraud.

     

  • User profile image
    elmer

    , evildictait​or wrote

    *snip*

    I take a simple approach to this: It's immoral, it's completely opposed to the concept of taxation that our democratically elected leaders intended, what the treasury wants, and what the people of our countries think is reasonable; it's based on deliberate evasiveness and semi-fraudulent action by constructing fictitious sales between group companies to off-shore profits.

    Sorry, but 'immoral' simply doesn't cut it - your morals are not mine, nor are they those of a corporation, whose primary responsibility is to its shareholders.

    Clearly defined laws, and the knowledge that they will be fully enforced, is the only limitations you can realistically expect to be respected.

  • User profile image
    DeathBy​VisualStudio

    IMO the problem doesn't start here with corporate taxes; it starts with all of the money pouring into our governments from corporations and their phony SIGs, PACs, and lobbyists. We need campaign finance reform in order to start in fixing the corporate tax issue amongst other things. Gotta get corporate money out of politics before you'll see change...

    If we all believed in unicorns and fairies the world would be a better place.
    Last modified
  • User profile image
    cbae

    @DeathByVisualStudio: The US Congress is the best legislature that money can buy.

  • User profile image
    SteveRichter

    I don't follow why the foreign holding company that has all of the Apple money can't just send the money direct to Apple shareholders, avoiding the need to pay American taxes on money transferred to Apple America.  The thinking of conservatives is corporations should not have to pay any income tax. Just as with partnerships, taxes on profits should be paid by shareholders when the profits are distributed via dividends.

     

  • User profile image
    Ray7

    , SteveRichter wrote

    I don't follow why the foreign holding company that has all of the Apple money can't just send the money direct to Apple shareholders, avoiding the need to pay American taxes on money transferred to Apple America.  The thinking of conservatives is corporations should not have to pay any income tax. Just as with partnerships, taxes on profits should be paid by shareholders when the profits are distributed via dividends.

    The tax is applied when the money is repatriated, which Apple would need to do to pay the shareholders. 

  • User profile image
    elmer

    @Ray7:Apple shares should require an account with iBank, based in the Cayman islands Wink

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