What am I supposed to feel?
1. Governments fail to prevent evasion of taxes.
2. Governments make unfair claims on taxes when public outrage allows.
3. Trump got elected.
4. Most money spent by governments is blown.
I think many people seek a "one good guy, one bad guy" storyline. I'm not sure whether that's cultural, a part of our mythology, or biological. But it's probably something to avoid.
Fairness however should be of interest for the people that make these laws.
But the law was changed in their favour by Luxembourg in a deal to deprive other EU countries of tax by creating sweetheart deals.
Jean-Claude Juncker, the current president of the European Commission, who was prime minister of Luxembourg admitted after the “Lux Leaks” publications that the system was “not always in line with fiscal fairness” and may have breached “ethical and moral standards.”
http://www.bbc.com/news/world-europe-36662636
The only people who suffered directly as a consequence were the leakers
> Former PricewaterhouseCoopers employees Antoine Deltour and Raphael Halet received 12 and nine-month sentences respectively for leaking documents.
Nor is there, I wager, any duty to maximise revenue or profit or anything similar in any jurisdiction on the planet.
tl;dr: "Tax avoidance" isn't a "fiduciary duty" per Delaware corporation law. That said, APPL execs may be subject to such standards through its corporate bylaws or through a variation in state law (CA v. DE).
[0] http://uchicagolaw.typepad.com/faculty/2015/12/a-duty-to-min...
'Tax evasion' is illegal - it implies you're doing something like hiding money offshore, and not declaring it.
Apple is doing nothing more than not paying the taxes they are not supposed to.
If you claim your 'moving expenses' on your tax form, are you 'evading taxes'? No - you're just playing by the rules.
Apple basically played by the rules. Nothing they did was illegal until the EU change their laws 25 years retroactively.
2)
Europe definitely has a right to tax business activity in Europe.
3)
The US does have a right to also tax business overseas, but it needs to be reasonable. Today, the laws are whack and US companies are double-taxed. If they weren't all that money would be coming back.
Your comment about Trump are unfortunate, I don't like him either, but he was elected. Also, the bureaucracy has not changed.
But consider this: Trump is actually going to change the repatriation laws, and you'll likely see a Trillion dollars parked overseas come back to the US. A good chunk of it will go to investors as dividends, but still, even that money will circulate back into the economy, and that's not all of it.
It's surprising Obama did not do this - if he made repatriation laws consistent with the rest of the world ... it could have been a big bump to the economy when the US needed it the most.
Edit: to be clear (thanks to Marzan, below) 'double-taxation' is not quite the appropriate term, as US companies are given credit for taxes overseas.
Well they did take part in secret sweetheart deals with Luxembourg that were designed to specifically route tax from EU countries into Luxembourg tax shelters. I would define that as "more than following the law"
https://www.icij.org/project/luxembourg-leaks/new-leak-revea...
Jean-Claude Juncker, the current president of the European Commission, who was prime minister of Luxembourg admitted after the “Lux Leaks” publications that the system was “not always in line with fiscal fairness” and may have breached “ethical and moral standards.”
Assuming that it did "circulate back into the economy", it seems most likely this money would be funneled into the already bloated financial sector where it can most readily participate in the variety of internal US tax avoidance schemes.
I'm saying that corporate profits returned from overseas are effectively coming back into the economy.
Actually - this is statement of fact. It's 'in the US system' as opposed to overseas.
Second - your position basically implies that 'corporate profits' are not beneficial to the US economy, which is a stretch.
Almost all of the money coming back will be put to use.
Do you want to know just one of the many ways:
STARTUPS
The massive number of startups being funded, at amazing valuations, is a function of 'extra cash' in the financial system. All of those failed startups employees are being paid with those dollars. And in many ways 'it's good' - they learn, they move on to better companies etc..
Massive amounts of money coming back into the US economy is a 'good thing' - the onus I think would be on you to demonstrate how this could really be a negative thing, and I suggest it would be impossible to demonstrate.
A significant portion of those profits were shifted overseas to avoid taxation within the US. Providing a "tax holiday" in order to repatriate those monies essentialy validates the tactic of shifting profits overseas to avoid taxation until a critical mass of dollars has accumulated so that it is politically attractive to institute another "holiday" just to bring the money home sans the tax.
This tactic is starving the US Treasury of funds needed for the People's Government to perform its functions.
This isn't the first go around with this, it is in fact becoming cyclical.
https://en.wikipedia.org/wiki/Repatriation_tax_holiday
In the meantime, these entities are parking dollars out of reach (actively removing them from circulation) instead of investing or spending them within the US.. where they would have been circulated anyway if not for the tax avoidance. They are being rewarded for removing the money and then politicians are being hailed as heroes for "convincing" them to return it by helping them avoid paying taxes to put it back in the economy it was removed from.
I fail to see how you think any of this is beneficial to the US economy.
In Apple's case this is not true at all. The money they are holding in Ireland comes from profits generated overseas, not from profits made in the US. (This is all well documented from the Senate investigation into Apple's finances a few years back.)
No - they are not removing anything.
Listen - if you lived in Dubai and earned $300K/year and paid minimal taxes, and moved back to the US with $100K in your Dubai account ...
If you left it there, and used it for travelling overseas, making investments, there would be no tax.
If you brought it to the USA - and it would be taxed at say 25% ...
Would you leave it there, or bring it back?
Would you be a tax evader/avoider for leaving it there.
No.
It's perfectly reasonable for you to want to leave your money overseas.
(I should point out that this is merely an analogy, personal taxes don't work this way for Americans.)
Apple has done nothing wrong.
If the US adjusts it's tax system to be more commensurate with how the entire rest of the world works ... it would be very beneficial to America overall.
I really don't like Trump, but I think he's going to fix this one issue, and that's going to be quite a big deal and a 'good thing'.
People are not fictional entities that can be created and destroyed at will; corporations are.
Shell corporations are being created within tax haven countries for the sole and explicit purpose of parking revenue within the boundaries of tax friendly regimes. The companies are not actually moving anything to these countries in terms of physical assets or corporate function.. only revenue. This is nothing like a person moving overseas and working and getting payed within that country.
They may have found a legal framework that makes them within the bounds of US & International law in order to do so. The problem with doing this is the inability to repartiate those funds without paying tax in the country you wish to move the money to.
There is nothing broken about taxing profits. You may not agree with the rate of taxation for corporations, but you would be at odds with the vast majority of the electorate. Companies choose to park revenue overseas in protest of the US tax rate.
Trump? I don't think he will fix anything. His stated intent is to cut taxes and increase spending. Maybe lower corporate taxation is in there, but that doesn't "fix" anything. There will always be some country, somewhere willing to go lower. This shell game will continue.
That's oversimplifying what happened. What happened is that Apple was working with the Irish government for a deal with very low tax %. The EU now told the Irish government that this was illegal, and that they need to ask Apple to pay the full price. Retroactively.
If you play dirty around the rules don't complain when it does not work out. If Apple had simply played according to the rules none of this would've happened.
The excuse that 'everyone does it' is a bad one. It doesn't work out for all the criminals in jail in US for dealing drugs, now does it?
Governments give incentives including subsidies and tax breaks all the time to companies.
Nearly every film made in Canada in the EU gets tax breaks.
Are you suggesting 'film makers' are like 'drug dealers'?
Can the EU rule that tax credits for film-makers are now 'illegal' after so many years?
How about subsidies to Airbus? And defence contractors?
That this has been going on for 25 years and the EU didn't say anything about it completely absurd and shows how broken the system is.
If you're going to have a 'single market' then you must have tax harmonization, or you have these issues - ergo - the fault is again the EU.
Re-interpreting laws 25 years retroactively is firmly in the camp of 'theft of private property' by government, totally banana republic.
The EU needs to fix it's game and stop blaming other entities for it's shortcomings.
> Governments give incentives including subsidies and tax breaks all the time to companies.
How on earth is that a reply to what you are quoting? Learn to quote.
Your original statement was a deceiving lie, and I corrected it. The EU did, in fact, not retroactively change a law since that is impossible. At interpretation of a law however, can be changed. The EU has told Ireland that their deal was invalid, and asked the Irish government to still ask Apple for all the money they owe the EU. It is money we -as civilians of the EU government- never received from Apple.
As I said in my previous post (you did not address any of what I wrote except went on a completely different tangent): If you play dirty around the rules don't complain when it does not work out. If Apple had simply played according to the rules none of this would've happened.
My example of how terrible the US government is was actually one where the US government profits because the US government profits from drugs felons via free labour.
I'm not going to get into this holier than thou debate on subsidies since I find it a complex topic to judge on by a case by case scenario. Other than that I'm casually gonna mention the US does this as well (in multiple kinds of ways including for example corn), as well as waging all kind of illegal wars and installing democracies as well as dictatorships to wage illegal wars, as well as economic espionage on their allies (Belgacom hacks come to mind). All of which the EU barely does, if it even does that. Some specific EU countries do, and I'm not happy about that. One of the worst culprits on that, for better or worse, is soon leaving us and in that delight I won't shed a tear.
No law has been changed, the article cited in the ruling has its beginning in the Treaty of Rome of 1957