Apple 'among Largest Tax Avoiders In Us' - Senate Committee

[The Old Git]

It looks like America are trying to get tough but even they have admitted Apple have not broken the law. Ireland have seemingly benefited from Apple in the midst of all this and it is unlikely the Government there would want to lose the income provided by the lower taxation Apple have paid there.

 

The USA Senate committee is just pissed that that Apple is keeping the billions of pounds it earned outside the USA (and already paid tax on) outside the USA because to bring it back to the USa would incur a 35% tax charge.

 

Apple is already among the biggest USA tax payers, but they want more. Don't think it's going to happen.

[manxman1980]

 

It looks like America are trying to get tough but even they have admitted Apple have not broken the law. Ireland have seemingly benefited from Apple in the midst of all this and it is unlikely the Government there would want to lose the income provided by the lower taxation Apple have paid there.

 

The USA Senate committee is just pissed that that Apple is keeping the billions of pounds it earned outside the USA (and already paid tax on) outside the USA because to bring it back to the USa would incur a 35% tax charge.

 

Apple is already among the biggest USA tax payers, but they want more. Don't think it's going to happen.

 

I don't have any real issue with Apple on this matter. They are doing nothing illegal and are simply ensuring they are getting the best return they can. Wooley seems to forget that most people try and pay as little tax as possible and complain when it is increased - why should a multi-national business be any different? Given the circumstances you have described why would anyone choose to move the money to the US?

[Albert Tatlock]

 

Surely the solution is a straight forward product tax, not complicated corporation taxes and herds of HMRC adminitsrators, accountants and lawyers chasing down every loophole? You buy the product, you pay the tax. You import it instead from e.g. a French online company and you have to pay the difference in tax?

 

 

Why not product tax? - ah yeah - the electorate will see just how much the government actually collect and waste, but this time instead of blaming the company for the increased price, consumers would directly see just how much the government are actually demanding. Customers will start asking awkward questions like 'why am I effectively paying twice the tax than other countries charge'?

 

Don't we already have that - called VAT?

 

I don't see how that would alter the amount of tax companies pay, or don't pay

Product tax. Whoever pays for the goods/service, the product tax goes on the bill. One element of it might be called VAT at moment, but product tax = VAT + what would be Corp Tax. The 'Corp tax' element might be calculated on total number of products/services sold in the country over the previous year?

 

That way, regardless of where you are located, the tax is on the product and the customer pays it all when he pays the bill.

 

Brainstorming here.

[The Old Git]

We'd all end up paying more though? Inflation would go up?

 

Company tax is calculated on profits, which is why the likes of Starbucks and others charge themselves for the use of the logos, etc. from a low tax jurisdiction.

 

I don't know what the answer is, just feel that saddling the consumer with another tax isn't the best way forward.

[Albert Tatlock]

I don't know what the answer is, just feel that saddling the consumer with another tax isn't the best way forward.

Same here. But I think the main point I was agreeing was that the british government tax too highly. Instead of making taxpayers feel bad all the time, and indicating that all this is a one-sided argument, governments should cut costs.

 

A product tax would show just how much tax they really collect. Inflation? Possibly at first, but people would adapt to the model. We're not talking about a higher take, just who pays it in the chain...when and where.

[woolley]

I know what the answer is and I already posted it. Of COURSE we all want to pay less tax and do whatever we can to minimise it. However, when you have some of the largest businesses on the planet taking the mickey and not paying their fair share, it means the rest of us as individuals and the other businesses have to pay their own share and also make up for the freeloaders.

 

Albert: I am right with you on cutting government waste. Many of my posts have been about just that. But being in favour of government financial prudence does not mean we cannot also have tax fairness. They are not mutually exclusive. If we have both then we will be in a much better position.

 

Manxman1980: You write with the zeal of a convert to tax avoidance. Of course the global tax dodgers are doing nothing illegal. That's the problem and that's what needs to change so that all can pay their fair share and no more. I notice you didn't comment on my earlier post - what company will walk away from 79% of the revenue of a 60 million market because they have to pay 21% in tax? They'd be mad. Naturally they prefer to have 98% or whatever, and naturally they will continue to take it until stopped by law. Call the bluff. Take them on. If they say they'll pull out then good riddance. Bet they don't go or if they do they won't stay away for long.

[manxman1980]

I notice you didn't comment on my earlier post - what company will walk away from 79% of the revenue of a 60 million market because they have to pay 21% in tax? They'd be mad. Naturally they prefer to have 98% or whatever, and naturally they will continue to take it until stopped by law. Call the bluff. Take them on. If they say they'll pull out then good riddance. Bet they don't go or if they do they won't stay away for long.

 

Sorry woolley I did reply but did not really emphasise it. I asked the question about who will blink first because National Governments and Multi-National Corporations are effectively engaging in brinkmanship. You are right that a corporation would be unlikely to walk away from a large market, however, Governments are also reluctant to put that to the test. What would happen to the Government that did take that gamble and lost?

 

I have been posting on this by ignoring the "ethics" of tax avoidance which is probably why you think I am a convert to tax avoidance. My view is that the only way a solution can be reached is for the National Governments to work together. Sadly I think this is unlikely is because National Governments always work in their own interest and as I have already mentioned Nationalism gets in the way when it comes to the voting public.

[woolley]

I honestly don't think that a government would be taking a risk. Multinationals wouldn't walk away as I said, and the upside would be that voters could see the government had struck a blow for fairness all round. And on the off chance that they did pull out, the economic activity would be taken up by other businesses as would the staff. I just don't see that as the problem so we need to look elsewhere. Maybe there are vested interests that "persuade" governments to take no action or convince governments that it would be a bad idea. Maybe, God forbid, there is corruption in high places involved.

[manxman1980]

I daresay that some politicians will have some interests and maybe there is corruption but I suspect that if that was the case then we would have heard about it now. If there were backhanders going on then I would imagine the organisations would be 'reminding' those involved of the consequences of that becoming public.

 

I also think that you have to consider the impact of internet shopping and commerce whereby the organisation may have no physical presence in order to sell in a particular market. Okay, Starbucks can't use that particular model but certainly there are businesses that could do. That makes them harder to pin down and the key interest becomes where they are registered... In that case the organisation can just shift it's registration around to low tax areas. We see this with the Isle of Man now.

[woolley]

I daresay that some politicians will have some interests and maybe there is corruption but I suspect that if that was the case then we would have heard about it now. If there were backhanders going on then I would imagine the organisations would be 'reminding' those involved of the consequences of that becoming public.

 

I also think that you have to consider the impact of internet shopping and commerce whereby the organisation may have no physical presence in order to sell in a particular market. Okay, Starbucks can't use that particular model but certainly there are businesses that could do. That makes them harder to pin down and the key interest becomes where they are registered... In that case the organisation can just shift it's registration around to low tax areas. We see this with the Isle of Man now.

Agreed. This is where country by country reporting would come in. Meanwhile, it is much easier to sell into a market with a physical presence than without one. Logistics are difficult from abroad and if the logistics are carried out by a third party onshore then there is a way of finding the revenue and taxing it. If goods come in from abroad, wherever they are in the world, make it the norm that they either pay tax at the prescribed rate on sales/profits before any upstreaming of revenue, or they do not do business in the terrritory. Any who don't agree, declare their merchandise contraband and liable to siezure at port of entry and publicise this so that the public know that buying from "taxdodger.com" is more trouble than it's worth.

[The Old Git]

A product tax would show just how much tax they really collect. Inflation? Possibly at first, but people would adapt to the model. We're not talking about a higher take, just who pays it in the chain...when and where.

 

This site - http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks - advoates getting rid of all income tax and just having a sales tax

[Albert Tatlock]

 

A product tax would show just how much tax they really collect. Inflation? Possibly at first, but people would adapt to the model. We're not talking about a higher take, just who pays it in the chain...when and where.

 

This site - http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks - advoates getting rid of all income tax and just having a sales tax

Interesting. Yeah that type of thing.

 

I think it's inevitable. There'll always be countries with different tax rules willing to hide info. We're not in the world state led by the USA, that the BBC would have you believe.

 

 

.

 

 

.

[The Old Git]

Would that mean that companies won't pay any tax though, or would they be paying it on all of their supplies and materials?

[Albert Tatlock]

Would that mean that companies won't pay any tax though, or would they be paying it on all of their supplies and materials?

Worth exploring...but it is a complex model, particularly when you take into account globalisation and purchasing supplies, materials and services required globally.

 

I might look more into it when I have time. I'm sure others have looked at it in detail before.

[pongo]

This site - http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks - advoates getting rid of all income tax and just having a sales tax

Sales taxes disproportionately affect the less wealthy and potentially undermine a widely felt sense that taxation should probably be progressive. The less you have the more the basic level of existence costs.

 

Tim Cook volunteered to go before the Congress and it seems to have been very much in the spirit of bringing something to the conversation. Apple's main point seems to have been that it is for the govt (ie including Congress itself) to draft better tax legislation if necessary rather than calling out companies which follow the rules. It would have been funny to see Steve Jobs fielding the questions and putting them straight.

 

Apple is a soft target. It does what it does in the open. It does not hide behind brass plaques in places where it is not actually doing business. It really is doing real business in Ireland, China etc. The members of the Congress might well have been far less comfortable quizzing representatives of many other less open large US companies which are significant employers in the constituencies - especially given the way that political funding works in Washington.

 

Companies have a fiduciary duty to their shareholders to minimise their tax liabilities.

 

^ All of this is stuff which I have either heard or read elsewhere. I am just repeating things which other people have said. Not original thinking