If governments make ex post facto changes to the tax law, you create a volatile business environment that turns off new investments especially from overseas investors. This is why countries that nationalize previously private enterprises without notice end up screwing up foreign investment. Who wants to start a company in X country if at any time they can say "No, too bad. Pay me 90% in taxes now."
This attitude is annoying. They're forming overseas shell corporations with at most a few employees in those offices who claim an extremely high percentage of all IP-derived income. To claim these companies aren't doing anything illegal, simply because we can't prove that a few people in Ireland aren't responsible for all IP, isn't quite fair. Just because you've arranged fancy license agreements with your Ireland offices doesn't mean those contracts are valid or conscionable.
These companies pay almost no taxes yet feed off our public universities, court systems, patent and trademark offices, copyright offices, public airwaves, highways, federal banking infrastructure, etc. It's sick.
> These companies pay almost no taxes yet feed off our public universities, court systems, patent and trademark offices, copyright offices, public airwaves, highways, federal banking infrastructure, etc. It's sick.
You misunderstand me.
I absolutely agree that it's sick.
But it is 100% legal because the government allows it to occur. If you are expecting private organizations to not act in their own interest, you're basically fighting gravity.
but if you think about how it got to this point, this is almost an inevitability.
Lets suppose that a country wised up, and tried to crack down on this sort of thing. Or better yet, all countries did this at the same time! What would happen?
At first, things would be sweet - the "proper" amount of tax (by proper, i mean similar taxing schemes for corporate entities as well as individuals) means more money to the gov't for social services etc.
However, a country might start thinking that they could attract move investment by making these laws a little more lax - tax incentives? tax breaks, or whatever else you name it. The thing is, companies that operate in a particular country does provide that country with useful output (in terms of jobs etc). It's in a country's best interest to attract as many businesses as possible. This leads to the sort of behaviour we see today - lobby groups have power, because they actually do!
I don't think equality is achievable. Not realistically.
Those employees would be paying income tax at any job. The benefit is squarely to Apple owners. I really don't get the attitude of people who defend these companies paying almost no taxes. The same people must support billionaires paying 10% tax while the rest of us pay 25%+.
Big corporations lobby to have tax laws that result in a low tax liability for themselves.
Tax laws for large multinational corporations are also tend to get into grey areas, where it's hard to tell if something is legal or not (not saying Apple are necessarily in that grey area).
The fact that big multinationals are not paying as much tax as many people think is fair is undeniably the fault of both those companies and politicians.
The corporations are just acting on their incentives. The opportunity exists, therefore they're going to take advantage of it.
Returning maximum value to shareholders is something that most (all?) corporations are trying to do. To not take advantage of government loopholes would be neglecting fiduciary duty.
It's not the corporation's job to police morality. That responsibility theoretically belongs to the state. If they're inept and/or corrupt, so be it.
> To not take advantage of government loopholes would be neglecting fiduciary duty.
Not true. Taking advantage of loopholes is sometimes illegal, and sometimes a grey area.
> If they're inept and/or corrupt, so be it.
So why don't we all just give up then? Companies have a duty to earn as much money as possible regardless of morality, lobbying to get whatever laws changed they feel like in the process, and politicians can do whatever they want once they are elected.
In my view letting corporations determine law, law determine morality, and accepting it without complaining is an exceptionally bad idea.
> In my view letting corporations determine law, law determine morality, and accepting it without complaining is an exceptionally bad idea.
I absolutely agree. But as I said prior in the thread, expecting private corporations to not act in their best interest is like arguing against gravity.
The keyword there is legally. Not morally, ethically, according-to-you-ly, etc. And that's what it comes down to. If you want it another way, well, the laws need to be changed.
Once a tax system becomes so complicated that you need entire departments of people to work out what the "correct" amount of tax to pay is, you make tax susceptible to optomisation the same as any other part of a business.
You replied with the incredibly intellectually lazy "take it up with your politicians", which is exactly what the article describes is happening, but were too lazy to bother reading even the first sentence of. The politicians are questioning the tax issue, and are implying that there is something fishy in the way Apple does their tax - the MP in question thinks that they are not paying their proper tax bill as a result.
What tax bill? Though you use the term "bill," you seem to be arguing that they should actually donate money to the Australia government. I've haven't seen any news that would indicate Apple isn't paying the legally required taxes in Australia.
If they do choose to donate money, I can think of a few better things for them to focus their philanthropic efforts on than government.
The point is that Apple in Australia is basically just a retail arm. The idea that a retail arm has running costs of 97% is purely ludicrous - particularly the retail arm of the richest company in the world, the one of whom everyone talks about how much money they have and how dominant they are.
I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra.
To even remotely consider Kerry Packer as an upstanding and completely above-board member of the community is just laughable from the outset. His persona lived large in the world of shady backroom deals, and he loved it.
Sure, everyone wants to minimise their tax, but what quotes like this do is paper over the loopholes available to the very wealthy, that allow them to pay far less than a fair share of tax.
Besides, using the argument of "but it's legal!" to end the conversation would suggest that no-one should ever make new laws, simply because anything that's currently legal 'must be right because it's legal'. A circular argument. For example: Should we make laws for greater transparency in government? No, because it's currently legal for them to hide their activities, therefore it must be correct!
I'm sure that on balance Apple and their ilk like patents, because they only have to compete and cooperate with their peers. No skin off their back if a little guy gets sued for infringement, that just means one less potential threat sneaking into their realm. Upstarts are dangerously disruptive to incumbents.
I was contrasting what the previous poster wrote to some really useful things. And useful here means benefiting everyone around. Opening up widespread video codecs would be just that. But Apple being known for aiming for exactly the opposite won't spend on that of course :)
Buying out all patents related to something up and coming sounds dangerous, we already dislike submarine patents and this sort of act could make them even more likely.
It's not dangerous if they are all opened up - completely the opposite. That's what Google did with buying On2 and opening up VP8. That is really useful way to spend extra cash - it benefits everyone.
Not really. Since there is no guarantee the same thing will happen with any other given patent. It's not like each patent has a great value. The ones which affect the critical markets are important. But trolls already push for making such patents to extort money so it doesn't really change the incentive for making more of them. Was there any higher patent rush after Google bought On2?
I think it does - it creates interoperability for video on the Web. It benefits everyone including Apple. But they don't think in such terms or pretend that its not relevant. And anyway - they should profit from creating technology, and not from sitting on the pile of patents. But Apple is Apple.
Or maybe sink a significant portion of that cash into hiring the world's brightest scientists and engineers, and doing some crazy, next-gen R&D at the sort of level only governments are able to fund. Maybe fund some university research and claim first patent rights on the results, too. Hell, might as well buy the future for the next 50-odd years.
To the extent that Apple's success is predicated on staying a couple steps ahead of the market, seems like a decent investment.
And since Musk owns 2/3 of the company, and seems to be a man with a mission, it's not at all clear that he'd sell to anyone.
Then again.... SpaceX was apparently built on around one billion dollars. So for $10B (Charlie's suggested figure), you have a fair shot at building a SpaceX from scratch. Start by offering to triple the salary of everyone at SpaceX if they come work for you.
I doubt many folks work at SpaceX for the money, so even if it was 10x I doubt many would leave. You don't build a SpaceX from scratch unless you have someone like Musk driving it.
You think Boeing lets any schmuck work on their aircraft? The airlines have Boeing certified and trained mechanics that work closely with Boeing to conduct maintenance and repairs. Apple, similarly, allows you to become an authorized maintenance service provider for their products.
In any case, the airlines are often not the owners either. A lot of new aircraft are actually leased from Boeing or Airbus. That's kind of how I view my cell phone really. A leased appliance that I'm happy to let the maintenance of which be someone else's problem.
Those aren't users. The owner of the plane is the user. They use it to get paying customers. If American Airlines had to ship broken planes back to the Apple factory for service and repairs, that would be a problem.
If you could order one...
The materials would be crap....
It'd need a ROM from a Russian ICBM to function properly
On the flight into space you'd need to reboot it several times.....
The manufacturer and the launch pad owners would keep the updates from the pilots.
Yeah, when the crew of Applo 13 are told they can't repair the air scrubbers because they were glued to the frame of the spacecraft, they would collectively gasp.
Planes are user-serviceable. The user is the owner, which would be the airline. In the case of an Apple rocket, presumably the manufacturer would be the only one that could service it. This would be like all of the major airlines needing to send their planes back to Airbus or Boeing whenever service needed to be done.
They aren't giving it back to all of the end-users that purchased their products. They are performing huge shareholder payouts to people that already own their stock.
* SpaceX (market cap $10Bn, AIUI)
* Dell (a mere $23Bn!)
* Boeing
* Ford
* The entire global publishing industry (figures for the top 50 publishers' turnover are here: http://www.publishersweekly.com/pw/by-topic/industry-news/fi... -- the largest only turns over $8.4Bn)
* A year of Puerto Rico's GDP (roughly $100Bn)
It is really hard to get your head around just how big Apple's cash pile is.