Tim O'Reilly's Reflections on Apple's Tax Avoidance Tactics
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There is little value for society to spend its time saying, "Apple is bad because it minimizes, within the contours of the law, its tax burden." And, contrary to Mr. O'Reilly's assertions at the beginning of his piece, I don't say this because I think Apple can spend its money better than the US Government can. For this argument, I don't care either way because it's irrelevant; he merely dismissed a strawman.
The question has to do with our tax code. Is it achieving the goals that we created it to achieve? If so, then there is nothing to discuss, so presumably it's not. If it's not achieving its goals, let's look at the entire picture and talk about where its failures are and how we should change it. Attacking any one particular company is merely a distraction that impedes our ability to discuss the things that actually matter.
The NYT piece is not a premise in his argument, it's simply the reason why he writes about taxation.
He has no actionable thesis, just a vague "we should look out for each other" message that makes it easy to read into it whatever you want to see. Yes, we should look out for each other. We compel this via taxation. If we aren't compelling corporations to do what we actually want given the rules we have set up, let us change the rules.
In other words, the actual problem that he is talking about, whether he chooses to address it or not, is that systemically we have a taxation problem. That's the only interesting thing to discuss here.
The real problem is that it is somewhat presentable to pay as little taxes as you can. Tim is trying to spark a conversation where that changes.
Before you can change tax law, you have to get people engaged in caring about tax law. Because for the last decades, big corporations have invested a lot of money in having people either not care, or care in a direction that directly hurts them.
This heart of this post begins at "But to my promised personal reflections"
The biggest and most profitable companies are avoiding huge portions of their tax obligations. It's a systemic problem. Both points are made by the NY Times piece and Tim O'Reilly's commentary on it. It's hardly a distraction.
And yes, the underlying dynamics of the problem are manifold. Both statute and regulation should change.
Never.
For that matter, when was the last time you called up the IRS and said, "Dammit America, you're doing such a good job, I'm sending an extra $5,000."
Never. In fact, the most you or I have ever given extra is the $3 election fund.
Let's stop joking around, people. Companies, like people, are going to find ways to pay as little as possible, so long as it's legal. Let's stop blaming Apple and blame ourselves: reform the tax code to be simple, fair, and progressive.
Also, I am willing to pay more than required for products that I am particularly keen on, which is why I'm such a fan of Kickstarter
This year I purposefully overpaid my business privilege tax to the township as well, and paid a special zoning fee for having a home office that I know my neighbors (who also have home offices) don't bother reporting and paying. I also donate money exclusively to organizations that are not registered charities even though donating the same money to a charity would net me cash back in taxes.
90% of people may rarely go out of their way to pay more than they have to, but it's not unheard of.
Those libertarians he references are strawmen.
This maps well to his addressing those "strawmen" libertarians. Most libertarian rhetoric builds on the fact that people have been made suspicious of government and are suggested to think of government as "the other". Likewise, you seem to try to force his argument on its head - Nobody argues whether government should exist and you suggesting it makes me wonder how closely you've read the post.
"The Government" is the subgroup of society who have been elected by the rest of society to invest part of societies resources to the advantage to everybody. The basic math being that society will be better off having spent the money in that way than had it kept the money. Whether or not you agree that that is happening, that is the basic plan.
Tims post simply says: If we want to be a society, that comes at a cost and somebody has to pick up the tab at the end of the night and the system to make that happen is called taxation.
Claiming that this in itself "fallacious argument" because you actually know what his argument is seems ambitious, but I simply have no idea where you take that from. Let's argue the reverse: Since you don't seem to disagree that a government in itself is a good concept, who do you think should pay the price for it?
Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes
Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.
http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...
Your own summary simply repeats the fallacy. That someone must pick up the tab does not imply that the tab must be larger than it is today, or that the tab must be paid for by this particular chunk of money. It does not follow. It is not a logical argument.
It isn't even about libertarianism. It doesn't even rise to the level of an argument against libertarianism, because it isn't well-formed enough to even be called a proper argument. "We need a thing" and "We need more of a thing" are two completely different arguments, and you shouldn't allow one argument to be substituted for another without noticing.
You're doing your own argument a disservice by trying to modify the position of your opponent. That's not how discussions work.
The position that Tim (and I) argue is simple: There is X amount of money that it costs to run society. While, yes, we constantly have to figure out what that amount is, there is no question that it should be paid by everybody in that society. And that the stronger players (who both benefit most from a well funded society and who have the most to give) should be decent enough to step in appropriately.
Obviously I'm not a big corporation and obviously we're talking about tax loopholes here, not paying extra taxes on top of what you owe.
Concretely, how do you propose Apple calculate how much tax they owe if "the amount the law requires" is not the correct amount?
They are dodging tax laws using technical loopholes, not complying with the spirit of the tax laws. Stop being an apologist.
But ultimately the issue is you painting them as innocents in this, 'they're not mind-readers', when the main article suggests that they were actually aggressive pioneers in finding ways to dodge the spirit of tax laws.
I heard Germans and Belgians are "more decent" than Americans. ;)
Who's more "decent"?
The company that pays taxes, pays dividends to shareholders (pension/retirement funds, universities, charities,etc.), created 500,000 jobs in the US (which in turn pays income tax), spends billions in R&D, donates to charities, etc.
or
The big government with massive deficit that overspends on useless government programs, wars, etc..?
But I don't think getting into a pissing match about who is or isn't decent and extending this so far that the conversation breaks ("And squirrels! Are they decent!?") does any good.
If there is a corporation that has most of its business in your country but plays tricks to be taxed in another, that's a problem, plain and simple. Whether or not they have other good qualities adds nothing to the discussion.
Also - I thought the trickle-down "but they create jobs!" argument was thoroughly debunked by now?
That's $30,000 per adult, per year, in taxes (local+state+federal). The equation: government == society, is false. Some governments are effective and efficient, some are not; some work for the people, some work against the people, and in varying degrees.
We take as much money out of the economy through all forms of taxation as nations such as Germany, but we don't have the results to show for it that they do. They have better roads, better healthcare, better infrastructure overall, and better education.
What I don't like about these discussions, particularly when they are driven by US citizens, is the amount of proud apathy or downright confused resignation that is displayed. Surely a couple of corporations have spent a proper buck to make that happen - Confuse people so thoroughly that they start questioning whether this whole democracy and society-thing is worth it to begin with.
In 1978 Congress for once did the sensible thing and slashed capital gains taxes: This resulted in the supply of venture capital exploding. By the start of 1979 a massive commitment to venture capital funds had taken place, rising from a pathetic $39 million in 1977 to a staggering $570 million at the end of 1978. Tax collections on long-term capital gains, despite the dire predictions of Keynesian big-spending critics of tax cuts, leapt from $8.5 billion in 1978 to $10.6 billion in 1979, $16.5 billion in 1983, and $23.7 billion in 1985. By 1981 venture capital outlays had soared to $1.4 billion, and the total amount of venture capital had risen to $5.8 billion. In 1981 the maximum tax rate on long-term capital gains was cut to 20 percent. This resulted in the venture capital pool surging to $11.5 billion. Astonishingly enough—to conventional economists, that is—venture capital outlays rose to $1.8 billion in the midst of the 1982 depression. This was about 400 percent more than had been out-laid during the 1970s slump. In 1983 these outlays rose to nearly $3 billion....In 1982 the U.S. General Accounting Office sampled 72 companies that had been launched with venture capital since the 1978 capital-gains tax cut. The results were startling. Starting with $209 million dollars in funds, these companies had paid $350 million in federal taxes, generated $900 million in export income, and directly created 135,000 jobs.
Look, I'm not saying that the US is not wonderful - but there are a couple of areas where it just isn't wonderful at all.
I have no idea why you quote that text related to the Laffer Curve [2] (please learn to cite your sources). After all, it seems that Germany has adopted some of its principles [3] and numbers like that do not happen in a vaccuum as the text seems to suggest. But there is still nobody in this thread arguing for excessive or unreasonable taxation. It is still about companies being asked to pay their fair share.
That being said, I don't believe in money as much as I believe in human progress and quoting numbers like that isn't really helping - the social situation in the US and the impact that your "strong" corporate culture has on the world are areas that speak a much clearer language.
There are perfectly reasonable arguments why the US is the worst place to start a company in (Immigration Policy and Software Patents would be on the top of my list), but at 300m people compared to our 80m at a similar HDI, I just don't think that the two countries are that comparable. You won the war and it took us 40 years to reunite our own country, for crying out loud!
Everybody has their own set of challenges. It would be incredibly arrogant to respond to another person trying to suggest lessons that they have learned simply by parroting their challenges or solutions that simply don't follow the discussion. Then again, you start out by asking me how I like you being the center of the universe. Well - I like to understand myself as a citizen of the world and find little use in pissing matches.
[1] http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomin... [2] http://brookesnews.com/072409laffercurve.html [3] http://en.wikipedia.org/wiki/Laffer_curve#Outside_the_United...
then our discussion is over.
It is also worth mentioning that happiness is a subjective value. It is pointless to draw a conclusion about what make society happy when only individuals can be happy. If someone goes their own way, they are not leaving happiness on the table, they are seeking it out elsewhere.
If we are supposed to think of general taxation and the overall amount of government spending as reasonably justified on the grounds that these things were the outcome of a democratic process which "the people" (somewhat indirectly) agreed on, doesn't the same logic suggest that the loopholes are similarly reasonable and justified?
Loopholes aren't a bug in an otherwise perfect system; they are part of the negotiating process that produces laws. If it weren't for the loopholes, legislators wouldn't be able to find support for tax rates as high as they are. The loopholes are there for a reason. The loopholes are part of the exact same "social contract" that produced the taxes.
http://www.opensecrets.org/orgs/list.php?order=A
However, the point I'm making is that once we claim the democratic process doesn't justify the taxation side due to lobbying, we also can't claim the democratic process justifies the spending side.
[[Citation needed]] - don't see what you're talking about in the post - who is arguing that?
The whole point of taxes is that we can't rely on voluntary
donations to fund public goods.
https://en.wikipedia.org/wiki/Aedile
Note this part from the article in particular:
Because Aediles were not reimbursed for any of their public
expenditures, most individuals who sought the office were
independently wealthy. Since this office was a stepping stone to
higher office and the Senate, it helped to ensure that only
wealthy individuals (mostly landowners) would win election to
high office.
On the other hand, there's a lot of money that is being spent on campaign advertisements. Perhaps it would be a net gain for society if politicians 'advertised' by spending that cash on public goods instead. Perhaps we can learn from the Romans. :-P
Communism works best between two spouses, a little worse with immediate family, a little worse with extended family, a little worse with orthodox religious communities. People can see the trend. As the number of people that get involved goes up the total number of connections goes up n + 1 choose two and the chance that you deeply care for them goes down.