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Comment by marcospri | Hacker News Reader

Because the Pub next door pays a higher effective tax

The pub next door struggles to survive while Apple don't know what to do with hundreds of exploited billions.

They sell alcohol after all.

But fair point. And because the bigger players who can hire expensive accountants can always mask their profits, we shouldn't tax profits. It's too malleable. Hey, even VAT is a better tax.

The bigger players then avoid even more tax without the expensive accountants, with the burden falling upon everybody else, not least private companies whose owners are based locally and rely on taxable dividends for a living.

How are they going to evade VAT or a land value tax?

Well, they could own virtually no land in Ireland and buy very few physical assets in Ireland (hang on, that's actually already the case for Apple; shame about anyone brave enough to be actually making stuff in Ireland though)

Put another way, why should Irish businesses and consumers pay increased VAT and a new land tax so that Apple's profits can be tax free?

If you raised VAT even more they would just pass on the cost and make a fuss that it's the governments fault everything is suddenly more expensive. Politically it wouldn't work. If there was a way to globally set the price of a good at one level (iPhone = $400) and then each country could add tax after that so it's clear the company isn't passing the price on to the consumer in various countries with higher sales tax/VAT it might work well.

There's a whole theory about which taxes economic actors can get away with passing on, and which they have to bear.

See https://en.wikipedia.org/wiki/Tax_incidence

It's pretty intriguing, and doesn't align very well with our intuition. As far as I can tell, your hypothesis about the impact of VAT is not really supported by that.

VAT is not a fair tax, as it favours the rich at the disadvantage of the poor. It's everyone paying the same rate on basic necessities, independent of their financial situation. Sure the rich buy more stuff and thus pay more VAT, but raising VAT doesn't hurt a rich person. It hurts poor people, though.

Not every tax has to be progressive. It's enough to make the whole tax system progressive to achieve overall progressiveness. (Tautologically..)

Income taxes or even refunds or a basic income can fix that up.

VAT is mostly flat.

(I am in favour of taxing land by value for most or even all government expenditure. That's highly progressive, impossible to evade, and does not distort the economy at all: land's supply is fixed.)

The pub next door doesn't employee ~5000 people in Ireland and pay all taxes on those wages. If you consider the overall tax income generated by Apple as a company having a physical presence in Ireland, it's much much more than the pub next door. So Ireland probably decided to sign an agreement to have a higher total tax income by making Apple settle in Ireland rather than elsewhere.

The drinks industry in Ireland employs over 92,000 people and pays taxes on those wages.

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