/linked/2016/09/01/yglesias-ireland-apple

Comments

ass:
And you still side with Apple?
8:44 pm — Thursday, 1 September 2016
anonymous:
Vox is a pox on the pop.
9:01 pm — Thursday, 1 September 2016
charles:
yeah, well, also the explanation I got from cursory reading of the various stories that were published early on on the subject. Nothing complicated or subtle.
9:30 pm — Thursday, 1 September 2016
Sebby:
> The best explanation I’ve seen about this story.

Yes, it's good. Why on earth didn't you read it first, *before* advocating for Apple's continued exploitation of Ireland's bent tax regime, to the exclusion of other firms?

Or maybe you think that since everybody else is doing it, Apple should as well. I'd disagree, of course, but it's a perfectly suitable, typically unreasonable position for an Apple-worshipper such as your good self to take. Tax-dodging is awful, and I hope the EU gets some uniformity on dealing with it, but if it's not actually illegal, it's all right. Yes?
9:33 pm — Thursday, 1 September 2016
anonymous:
> The best explanation I’ve seen about this story.



What, had you only read Tim Cook's letter?

For fuck's sake, man.
10:11 pm — Thursday, 1 September 2016
anonymous:
Johnald Grump level flip flopping underway
11:09 pm — Thursday, 1 September 2016
anonymous:
"The best explanation I’ve seen about this story."



"The only explanation I've read"

fix'd
11:15 pm — Thursday, 1 September 2016
Tony Soprano:
to be fair, human level of understanding are different. also, to be fair, Apple is legally right. It's EU own policy to allow such loophole and now they accuse people to take advantage of it. If Apple is not the most profitable company, there won't even be any sound. o wait, google can always get away with it.
1:37 am — Friday, 2 September 2016
anonymous:
Tony, have you been drinking?
1:41 am — Friday, 2 September 2016
gruber circlejerk:
You can hate on Ireland for their "illegal" tax structures (illegal to an unelected group of delegates in the EU). To me, it's similar to if the US Federal government said that the states that have no state income tax were doing so illegally (except, to make the analogy work, you'd have to assume the Feds were unelected).

However, to fault and fine Apple is totally punitive. They saw the law as it was, and used it to their advantage. In the US, we generally have an assumption that all ex post facto laws, criminal and civil, are unfair. Criminally, they're prohibited under the Constitution, and civilly, they've been frowned upon. Take the AIG bonus controversy in 2009, where Chuck Schumer wanted to tax it at 100% (that's another issue too, being a bill of attainder also prohibited under the Constitution).

Anyway, ultimately, this is against our US sensibilities, but it's not our playground anymore. It's unfair to our mindset of what a first-world free market should be, but maybe the EU isn't a free market, either. If you want to reap the rewards, you have to play by their rules, no matter how backwards it is.

And, in the end, it is backwards to give up your sovereignty.
2:20 am — Friday, 2 September 2016
CL:
https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/White-Paper-State-Aid.pdf
3:07 am — Friday, 2 September 2016
chas_m:
I'm with Gruber circlejerk -- I don't know enough about the minutia of EU trade laws to judge whether Ireland's lowering of the corporate tax rate amounted to "illegal state aid," but fine -- let's say that it did. So Ireland broke the EU law.

I'm not understanding why the various companies (Apple was not alone in this) are being punished for Ireland's bad act. As Apple (and others) have said, they followed the law, and have a fiduciary (and legal) responsibility to minimize their tax burden. If a loophole exists, surely the legislators that created that loophole are to blame.

It's hard not to see this as a naked cash grab by the EU since they do not appear to be punishing Ireland for its illegal activity in any way (unless I have missed some report that covers that).
4:46 am — Friday, 2 September 2016
Sebby:
Right, legal and right are two different things, and it depends on who you ask whether Apple's behaviour is right or not, irrespective of whether it's legal. That's fair enough. I can deal with that.

But in this case, the competition regulator got involved precisely because the market conditions that sweetheart deals like Apple's create aren't fair. They disproportionately favour those who can get this status. That, without question, is wrong; we've got to have free-market conditions, as far as possible.

So really there are two issues to think about:

1. Is it proper that taxes are collected off-shore, instead of the place of sale? Apple thinks so: they have "Intellectual Property" stashed away in Ireland, for this purpose. They can thus attract profits away from their mother country, using Ireland as the broker. If everyone pays the same tax rate, do we have competition? And is it proper that other countries are disadvantaged by what essentially amounts to a tax haven? I don't like it, but it's not illegal--not yet, anyway. I hope that we'll give thought to *making* it illegal if it does continue to deprive other states of the taxes that they genuinely need, but for now it's no fault of Apple's, and as someone who thinks that he pays way too much tax as it is, I'm not exactly happy to empower my own government's brand of bungling tax policies. But it's an important question.

2. Is Ireland's independent tax system, including the provisions that allow multinationals to avoid tax essentially completely, excusable on the basis of sovereignty? This is easy: no, it isn't, because Ireland is an EU member state, and as we can see, it means competition within and outside Ireland is being hurt. Even if the arrangements weren't dodgy, legally speaking, the competition commissioner is right that someone who pays 0.0005% tax is clearly at a much bigger advantage than somebody who pays 12.5%. But wait, sovereignty--doesn't Ireland get a say on this? Isn't a good bit of the case that Apple are making that Ireland's tax affairs are their own, and that there are important reasons why Ireland would prefer not to turn away its own clientele? I've already said on here why I think the answer is "No", but somebody's bound to disagree.

I'll only add that Apple insists themselves, and Ireland agree, that all the value of Apple's products comes from the great minds in Cupertino. But as the Commission found, the IPR is in Ireland, the head office is a work of fiction, and all the taxation is being redirected there. Apple has a workforce in Cork, too. That's not such a great arrangement for the US, but Apple think it justifies their practices to go through Ireland and pay essentially nothing. What might this say about Apple's attitude to paying corporation tax, irrespective of where it's paid?
5:55 am — Friday, 2 September 2016
To Be Fair:
@gruber circle jerk:

>And, in the end, it is backwards to give up your sovereignty.

How did Ireland give up its sovereignty?

It was Ireland's choice to join the EU. It was not forced to do so. Just as America can choose to join international trade agreements. It has nothing to do with giving up sovereignty.
6:14 am — Friday, 2 September 2016
gruber circlejerk:
chas_m, I completely agree. And, to your point:

> It's hard not to see this as a naked cash grab by the EU since they do not appear to be punishing Ireland for its illegal activity in any way

They're actually _helping_ Ireland by trying to undermine the opposition. From http://www.adamsmith.org/blog/five-things-to-know-about-the-eus-apple-tax-ruling:

> The Commission stated on 31 August that Ireland is free to spend the €13bn of uncollected taxes how Ireland wishes. This, while being in direct contravention to European fiscal principles (which state that windfalls should be allocated to national debt reduction), was also political act designed to undermine the Irish government's reaction domestically.

TBF:

> How did Ireland give up its sovereignty? It was Ireland's choice to join the EU.

You answered your own question. No, I didn't say Ireland was conscripted into the EU. They voted to give up their sovereignty. Ergo, this situation.
11:13 am — Friday, 2 September 2016
Patrick Henry, the 2nd:
Fuck the EU. Apple worked with the Irish government to get a tax rate. Is it fair to other companies? No, but that's Ireland's problem for agreeing to it. And they are fine with it.

This isn't the government's money. Its Apple's. So they can go fuck themselves.
12:10 pm — Friday, 2 September 2016
CB:
@gruber_circlejerk:
> However, to fault and fine Apple is totally punitive. They saw the law as it was, and used it to their advantage.

The difference is that Apple and the Ireland tax negotiator worked together (colluded? conspired?) to come up with their scheme. Apple did not passively accept the Ireland tax law and then pay; they actively manipulated their standing with Irish tax law.

One could argue that Apple still has the duty to negotiate the lowest tax burden. OK, fine. But let's not pretend that Apple had no active hand in this process.
12:27 pm — Friday, 2 September 2016
gruber circlejerk:
@CB, fair point, I wasn't trying to exonerate Apple there (not that they did anything illegal). But under a fair society - certainly under the structures we are used to in the US, it would be up to the Irish to vote away that EU 13m as an incentive to domiciling Apple's European headquarters.

Of course, Federalism differs a bit from the EU analogy as there is a US tax on top of the state income tax (if any), but there is still heavy state lobbying with tax dollars and incentives at play.
2:18 pm — Friday, 2 September 2016
Sebby:
[Apparently](http://www.theregister.co.uk/2016/09/01/apple_looks_at_pulling_profits_back_to_us/) Timmy-boy is talking about tax repatriation in the US.

Either he's turning over a new leaf or, more likely, he's trying to pit the US against the EU for a good rate. This should be amusing.

Oh, and in the interest of counterbalance, if you want to know what the former competition commissioner thinks about this, [here you go](https://www.theguardian.com/technology/2016/sep/01/eu-state-aid-tax-avoidance-apple). TL;DR: state aid ruling is inappropriate and uncertainty about the rule of law is ultimately harmful. She did do good work while in office, to be sure, but she's ever-so-slightly coy about her own present-day conflicts of interest, or the fact that the Netherlands is part of the problem ...
5:32 pm — Friday, 2 September 2016
To Be Fair:
>They voted to give up their sovereignty.

Except they haven't given up their sovereignty at all. They can still leave the EU.

Engaging in international treaties and trade agreements is a sovereign choice.

You're just talking bullshit propaganda.
7:56 pm — Friday, 2 September 2016
gruber circlejerk:
> Except they haven't given up their sovereignty at all. They can still leave the EU.

You can't possibly be this obtuse. Well, I know the answer to that, you are.

Voting to give up your sovereignty, even with the unlikely opportunity to rescind that vote, is still giving up your sovereignty. Unelected bureaucrats controlling your nation's tax policies is a symptom of that.
8:04 pm — Friday, 2 September 2016
To Be Fair:
>Voting to give up your sovereignty, even with the unlikely opportunity to rescind that vote, is still giving up your sovereignty.

Except being a member of the EU does not involve giving up your sovereignty.

9:57 pm — Friday, 2 September 2016
Tony Soprano:
>Except being a member of the EU does not involve giving up your sovereignty.

Yes, it does.
8:11 am — Saturday, 3 September 2016
Tony Soprano:
>That, without question, is wrong; we've got to have free-market conditions, as far as possible.

The obscene bureaucracy being imposed out of Brussels creates "free-market conditions"? Pray tell, in what way?
8:13 am — Saturday, 3 September 2016
Tony Soprano:
>But in recent years, Vestager and her competition commission have interpreted favorable corporate income tax deals as a form of illegal subsidy.

Subsidy? How the fuck can a lack of taking someone else's money be considered a "subsidy"?

If I decide to NOT rob someone at gunpoint, have I now "subsidized" said person I declined to rob?
8:24 am — Saturday, 3 September 2016
To Be Fair:
>Yes, it does.

How so?
9:19 am — Saturday, 3 September 2016
anonymous:
> If I decide to NOT rob someone at gunpoint, have I now "subsidized" said person I declined to rob?


You are terrible at analogies.
7:48 pm — Saturday, 3 September 2016
Sebby:
> The obscene bureaucracy being imposed out of Brussels creates "free-market conditions"? Pray tell, in what way?

How do you think? In case you missed the bit where I said "as far as possible", it's pretty clear to anyone not totally sold on bonkers objectivist theory that you can't have a free market when a state is practically guaranteeing monopoly status to certain companies, as is happening here.

But of course you knew that already, didn't you?
8:17 pm — Monday, 5 September 2016
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