Lobbying groups. You said *Apple*. I'm not disagreeing with your general assertion that politicians are influenced a lot by money. I'm looking for some concrete citation of your very specific assertion "Apple created laws".
I don't buy that. If companies had room to raise prices, they would've raised prices already. There isn't some level of profitability where they go "well, that's enough guys".
If taxes were higher, all a company would do is make less money (or close up shop because they're not making enough money to justify the trouble). By definition they were already pricing their product at what the consumers were willing to spend. And they were paying their employees as little as those employees were willing to make.
And since taxes are only on profit and not revenue, no business would lose money with higher taxes. Only make less. Now, whether it's a good strategy to try to tax corporate profits....that's a separate question.
There are plenty of cases where "spirit of the law" comes into play. That's why we have courts and justices interpreting laws. But tax law, in general, is pretty open-and-close. However, in this case, there is some interpretation to be had. Including whether or not Apple's tax advantage was available to any other company.
Of course it isn't fair. But some of us are still fans of "rule of law". That is, if you haven't broken any laws, you don't get punished. No matter how unfair those laws are.
Change the laws (they have already) if you think them unfair. Mob justice is obsolete.
If you consider the Irish tax authorities giving a written compliance ruling "lying", sure. That's what the entire EU case is based on. The Irish tax authority blessed Apple's internal allocation of profits in a 1991 and 2007 ruling. The EU claims this is anti-competitive as no other company was blessed to do this (whether any other company tried, who knows).
The laws have already been changed going forward. These types of tax evasions in Ireland, at least, are closed to new companies and existing agreements will expire in 2020.
This is actually a case of anti-competition. The EU is asserting that only Apple received the type of tax ruling that allowed it to hide profits behind a mysterious "head office" that wasn't taxed in Ireland.
It may be true that no other company had done this. But I don't know whether that can qualify as anti-competitiveness since they'd have to show other companies being denied such a blessing.
Please don't lump us 1-5% people with those 1%ers. I know it's convenient when talking about fair taxation.
Once you reach a few million in net worth, it's like there's some magical barrier you just broke through where your effective tax rate actually goes down. Dramatically.
How much of the current government's spending do you think are on those "unreasonable" things? I see strawman argument against things like the FCC (what business is of the government to regulate the airwaves?), FDA (safe food? Privatize that!), EPA (clean air?! pfff) and other such "things that aren't in the constitution".
Usually with the argument that said things, if abolished, would lower taxes. But have you actually looked at the FY2015 federal budget? If you got rid of everything except Defense and disability (FICA/Medicare is its own tax, so I guess you can argue for getting rid of those), you'd still basically have the same budget. Those "not in the constitution" things are in the noise margin in terms of spending.
Now, I could be persuaded to re-think FICA/Medicare.
Autonomy has not ended any lives. The auto-feature didn't make someone take their hands and eyes off the wheel and road. I can take my hands and eyes off the road right now in my car (without any lane assist) and it'd be nobody's fault but mine.
Current cars allow you to take your hands off the wheels for way longer than a minute. You may not live that long depending on the road you're driving but it's an option.
I fail to see how it's somehow required that an assist feature also make you do something a car without the assist feature doesn't make you do.
The Irish government is breaking EU guidance. I'm not sure what legal powers and/or consequences the EU has about that but one of the principles of such guidance is to prevent member states from racing to the bottom with their tax laws and thus giving away bargaining power.
Actually it does work that way. A person's LLC shields him from liability unless it can be proven he/she knowingly guided the books to illegally skirt taxes. So if his accountant were to say, testify in court that the point was brought up but ignored -- possibly show emails -- then he'd be on the hook.
Otherwise, the LLC assets can be seized and the accountant can be charged, but he can't be.
Outraged or not, clearly this is a problem. While it might not be Apple alone, China's government should really look into beefing up labor protection enforcement. If no supplier can provide the low cost, they'll have to pay more. Or find alternate places to do their manufacturing.
The deductions I find avaialble for my personal income taxes were deliberatly written into law AS deduictions. I did not walk through an elabporate maze to build a house overseas, or hire a squad of lawers to create a way to expoit this "bug" in the tax code.
Where do you draw the line of what's acceptable tax-reduction methods and what isn't? If you have an investment property, sometimes it makes more sense to incorporate and put that investment property under that C-corp. You seem to be drawing a line between what's "acceptable" and what's "out of line". Not everyone agree with the line you've drawn.
If they took the time to figure out how to do what they have already done, it's not much of a stretch to imaginge that they are lobbying hard. They are, afterall, a money making machine.
Got it, guilty because...you can imagine it.
That's admitting it IS A PROBELM in Apple's own judgemnt and passing blame to Congress.
Congress *is* to blame. Taking advantage of a legal method of reducing your taxes instead of voluntarily paying more is *not* the problem. The problem is that those legal methods are there to begin with.
The collective total amount of money this 'loophole" has cost the governemnt is a lot.
Read what I said. If Apple alone were to voluntarily pay taxes on its overseas profits. That'd amount to about ~80B$. Or about how much money the DoD blows in 2 weeks. That doesn't solve anything.
The only way to actually make a dent is to make them, their competitors and all the other companies also pay more in taxes. That's kinda beyond Apple's abilities.
Ture. But they ARE a part of the problem... not the solution.
Have you written your congressman and senator about taxing royalties of foreign subsidiaries of US companies? No? Then you're part of the problem, not the solution.
There are plenty of places in the US with vibrant manufacturing. Hell, take a look at Indigogo or Kickstarter. Such a large number of their projects are mom-and-pop shops making a few thousand in cities like Portland, Seattle, Denver, etc. And a lot of those companies are perfectly profitable too.
The landscape has changed. It's no longer mega-company-X moving into a city and setting up a huge factory anymore. It's easier now than ever was to go mom-and-pop level and sell. And those guys go into work every day doing both grunt work as well as planning and designing their next revision.
It does employ fewer people than before for the same output because of automation. Way more than consumption has increased. So that alone, I realize, isn't the answer. But that doesn't mean manufacturing is dead in the US. It just means that the glory days where anyone willing to work got a job without needing skill or knowledge are over.
Of course there are people who want jobs and some wouldn't even mind boring jobs. The question is, what's better for everyone in the long run? Example after example shows protectionism (i.e. mandating by law job X be located in the US) doesn't help everyone. You help 5% of the population at the expense of the other 95% who don't work in that industry. And you reduce your economic efficiency as a whole by some percentage all the while fighting the inevitable. You're never ever going to fight the basic fact that other, poorer workers are willing to work for less under worse conditions if they can do the same job.
If a certain profession or industrial sector is so easily replaced by low-wage, low-skill workers, perhaps it's better not to rely on that for your economic backbone and to instead put your energy towards enhancing, training and making jobs for sectors that are growing and aren't easily replaced by the lowest-common-denominator types of labor in poorer countries.
There are plenty of examples of this. And we can put way more resources than we currently are into it. And government can play a lead role in that to boot.
So, Apple is again leading the pack by showing the world how to screw the nation that allowed it to become so rich.
Sure, it's not illegal, but how does that demonstrate social responsibility?
IDK. If you discovered something in the tax code that let you pay way less of your taxes, would you consider it not "socially responsible" to do it and tell your friends to? Would you just forget about said discovery and keep paying what you originally paid in taxes? Do you take any deductions every year? Do you take tax credits that you don't need?
If Apple were lobbying (and they very well may be, but we can't just assume) for laws in every country to stay as they are, that'd be a different story. But we have Cook on record as saying "this is a Congress problem". And it is. Congress needs to change the tax laws.
Even if Apple were to choose to voluntarily pay more taxes, it'd be a drop in the bucket for the Federal budget. Same as if you voluntarily chose to pay more taxes. The only way to actually make a dent is to make them, their competitors and all the other companies also pay more in taxes. That's kinda beyond Apple's abilities.
If you study the history of it, it's actually way more benign (read: stupid) than that. The loopholes exist because of different laws in 3-4 different countries, some of which has existed for hundreds of years. They involve laws on how royalty money (paid for intellectual property) is taxed in both Ireland and the Netherlands as well as loose incorporation laws in places like the Cayman Islands.
These laws were all put in place for different reasons and for different industries to benefit. With regards to royalties, the US part was specifically there to help the movie industry.
Someone at Apple one day spent some time drawing lines between all of these laws and had an "ah ha!" moment. Incorporated a bunch of shell subsidiaries in each of these countries and had them pay "licensing royalties" to each other using profits from hardware sales (again, totally legal) and boom: no taxes paid on foreign profits.
IDK if any of those can be blamed on Apple. In the beginning, yes, sure. But nowadays, it is just not possible to manufacturer tens of millions of iPhones every quarter in the US. They tried to shift Mac production (much less demanding) to the US and found they couldn't even get the supply chain for *that* fully in the US. This isn't even a problem of cost anymore. The Chinese simply do it better and on a bigger scale even if you don't account for the difference in labor costs. After all, if cheap labor is all you need, iPhone production should've moved to Vietnam or Malaysia by now.
As to taxes, again, their fault for finding the loophole and exposing it to all companies to use. But taking advantage of a *legal* way to pay less taxes is in no way "douchebaggery". It's Congress that's at fault here, they made the laws the way they are. I doubt you or anyone voluntarily pays more taxes than you legally owe nor would such an act make much difference. It only makes a difference if *everyone* does it, not just one entity. And that requires a change in the laws.
Apple is first and foremost a company that wants to sell stuff. That involves a lot of technology but it has never been the only thing they've focused on. Throughout its history, the company has banked (literally and figuratively) on selling stuff based on "the feelz" -- that warm glow of self-righteous euphoria their customers want to feel after purchasing their products.
What gives a demographic "the feelz" changes with society and culture and can very well be nudged by marketing. Today's society is much more concerned with social justice, diversity and charity than it was even 10 years ago. And so it can be argued Apple is doing the smart thing by changing their image to be one of social conscience.
There's no need. ISA really doesn't matter that much except in very-small-scale processors (think microcontrollers). You can make a very tiny and very power-efficient CPU using almost any ISA you want provided you have:
1. Compilers that are well tuned to your ISA 2. Good microarchitecture to run the ISA on
And then you need software that's written for that ISA. ARM didn't win out mobile because of its ISA. ARM won out mobile because the IP was low-cost and ARM poured tons of resources into developing a good ecosystem with compilers and toolkits.
I see RISC-V as being somewhat competitive only because it is open-sourced and therefore doesn't cost anything to use. But it has a long long way to go before the ecosystem (including SoC bus-fabric IP) is anywhere close to ARM.
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Lobbying groups. You said *Apple*. I'm not disagreeing with your general assertion that politicians are influenced a lot by money. I'm looking for some concrete citation of your very specific assertion "Apple created laws".
I don't buy that. If companies had room to raise prices, they would've raised prices already. There isn't some level of profitability where they go "well, that's enough guys".
If taxes were higher, all a company would do is make less money (or close up shop because they're not making enough money to justify the trouble). By definition they were already pricing their product at what the consumers were willing to spend. And they were paying their employees as little as those employees were willing to make.
And since taxes are only on profit and not revenue, no business would lose money with higher taxes. Only make less. Now, whether it's a good strategy to try to tax corporate profits....that's a separate question.
How does Apple create the law?
By hiring and maintaining a rather massive lobbying presence, just like any other tax-dodging mega-corp.
[Citation Needed]
There are plenty of cases where "spirit of the law" comes into play. That's why we have courts and justices interpreting laws. But tax law, in general, is pretty open-and-close. However, in this case, there is some interpretation to be had. Including whether or not Apple's tax advantage was available to any other company.
Of course it isn't fair. But some of us are still fans of "rule of law". That is, if you haven't broken any laws, you don't get punished. No matter how unfair those laws are.
Change the laws (they have already) if you think them unfair. Mob justice is obsolete.
If you consider the Irish tax authorities giving a written compliance ruling "lying", sure. That's what the entire EU case is based on. The Irish tax authority blessed Apple's internal allocation of profits in a 1991 and 2007 ruling. The EU claims this is anti-competitive as no other company was blessed to do this (whether any other company tried, who knows).
The laws have already been changed going forward. These types of tax evasions in Ireland, at least, are closed to new companies and existing agreements will expire in 2020.
This is actually a case of anti-competition. The EU is asserting that only Apple received the type of tax ruling that allowed it to hide profits behind a mysterious "head office" that wasn't taxed in Ireland.
It may be true that no other company had done this. But I don't know whether that can qualify as anti-competitiveness since they'd have to show other companies being denied such a blessing.
Please don't lump us 1-5% people with those 1%ers. I know it's convenient when talking about fair taxation.
Once you reach a few million in net worth, it's like there's some magical barrier you just broke through where your effective tax rate actually goes down. Dramatically.
How much of the current government's spending do you think are on those "unreasonable" things? I see strawman argument against things like the FCC (what business is of the government to regulate the airwaves?), FDA (safe food? Privatize that!), EPA (clean air?! pfff) and other such "things that aren't in the constitution".
Usually with the argument that said things, if abolished, would lower taxes. But have you actually looked at the FY2015 federal budget? If you got rid of everything except Defense and disability (FICA/Medicare is its own tax, so I guess you can argue for getting rid of those), you'd still basically have the same budget. Those "not in the constitution" things are in the noise margin in terms of spending.
Now, I could be persuaded to re-think FICA/Medicare.
Autonomy has not ended any lives. The auto-feature didn't make someone take their hands and eyes off the wheel and road. I can take my hands and eyes off the road right now in my car (without any lane assist) and it'd be nobody's fault but mine.
Current cars allow you to take your hands off the wheels for way longer than a minute. You may not live that long depending on the road you're driving but it's an option.
I fail to see how it's somehow required that an assist feature also make you do something a car without the assist feature doesn't make you do.
They include the dongle with the phone...
The Irish government is breaking EU guidance. I'm not sure what legal powers and/or consequences the EU has about that but one of the principles of such guidance is to prevent member states from racing to the bottom with their tax laws and thus giving away bargaining power.
It totally is. But this isn't the U.S. it's Europe. Mob rule has a very different meaning over there.
Actually it does work that way. A person's LLC shields him from liability unless it can be proven he/she knowingly guided the books to illegally skirt taxes. So if his accountant were to say, testify in court that the point was brought up but ignored -- possibly show emails -- then he'd be on the hook.
Otherwise, the LLC assets can be seized and the accountant can be charged, but he can't be.
Outraged or not, clearly this is a problem. While it might not be Apple alone, China's government should really look into beefing up labor protection enforcement. If no supplier can provide the low cost, they'll have to pay more. Or find alternate places to do their manufacturing.
The deductions I find avaialble for my personal income taxes were deliberatly written into law AS deduictions. I did not walk through an elabporate maze to build a house overseas, or hire a squad of lawers to create a way to expoit this "bug" in the tax code.
Where do you draw the line of what's acceptable tax-reduction methods and what isn't? If you have an investment property, sometimes it makes more sense to incorporate and put that investment property under that C-corp. You seem to be drawing a line between what's "acceptable" and what's "out of line". Not everyone agree with the line you've drawn.
If they took the time to figure out how to do what they have already done, it's not much of a stretch to imaginge that they are lobbying hard. They are, afterall, a money making machine.
Got it, guilty because...you can imagine it.
That's admitting it IS A PROBELM in Apple's own judgemnt and passing blame to Congress.
Congress *is* to blame. Taking advantage of a legal method of reducing your taxes instead of voluntarily paying more is *not* the problem. The problem is that those legal methods are there to begin with.
The collective total amount of money this 'loophole" has cost the governemnt is a lot.
Read what I said. If Apple alone were to voluntarily pay taxes on its overseas profits. That'd amount to about ~80B$. Or about how much money the DoD blows in 2 weeks. That doesn't solve anything.
The only way to actually make a dent is to make them, their competitors and all the other companies also pay more in taxes. That's kinda beyond Apple's abilities.
Ture. But they ARE a part of the problem... not the solution.
Have you written your congressman and senator about taxing royalties of foreign subsidiaries of US companies? No? Then you're part of the problem, not the solution.
There are plenty of places in the US with vibrant manufacturing. Hell, take a look at Indigogo or Kickstarter. Such a large number of their projects are mom-and-pop shops making a few thousand in cities like Portland, Seattle, Denver, etc. And a lot of those companies are perfectly profitable too.
The landscape has changed. It's no longer mega-company-X moving into a city and setting up a huge factory anymore. It's easier now than ever was to go mom-and-pop level and sell. And those guys go into work every day doing both grunt work as well as planning and designing their next revision.
It does employ fewer people than before for the same output because of automation. Way more than consumption has increased. So that alone, I realize, isn't the answer. But that doesn't mean manufacturing is dead in the US. It just means that the glory days where anyone willing to work got a job without needing skill or knowledge are over.
Of course there are people who want jobs and some wouldn't even mind boring jobs. The question is, what's better for everyone in the long run? Example after example shows protectionism (i.e. mandating by law job X be located in the US) doesn't help everyone. You help 5% of the population at the expense of the other 95% who don't work in that industry. And you reduce your economic efficiency as a whole by some percentage all the while fighting the inevitable. You're never ever going to fight the basic fact that other, poorer workers are willing to work for less under worse conditions if they can do the same job.
If a certain profession or industrial sector is so easily replaced by low-wage, low-skill workers, perhaps it's better not to rely on that for your economic backbone and to instead put your energy towards enhancing, training and making jobs for sectors that are growing and aren't easily replaced by the lowest-common-denominator types of labor in poorer countries.
There are plenty of examples of this. And we can put way more resources than we currently are into it. And government can play a lead role in that to boot.
So, Apple is again leading the pack by showing the world how to screw the nation that allowed it to become so rich.
Sure, it's not illegal, but how does that demonstrate social responsibility?
IDK. If you discovered something in the tax code that let you pay way less of your taxes, would you consider it not "socially responsible" to do it and tell your friends to? Would you just forget about said discovery and keep paying what you originally paid in taxes? Do you take any deductions every year? Do you take tax credits that you don't need?
If Apple were lobbying (and they very well may be, but we can't just assume) for laws in every country to stay as they are, that'd be a different story. But we have Cook on record as saying "this is a Congress problem". And it is. Congress needs to change the tax laws.
Even if Apple were to choose to voluntarily pay more taxes, it'd be a drop in the bucket for the Federal budget. Same as if you voluntarily chose to pay more taxes. The only way to actually make a dent is to make them, their competitors and all the other companies also pay more in taxes. That's kinda beyond Apple's abilities.
If you study the history of it, it's actually way more benign (read: stupid) than that. The loopholes exist because of different laws in 3-4 different countries, some of which has existed for hundreds of years. They involve laws on how royalty money (paid for intellectual property) is taxed in both Ireland and the Netherlands as well as loose incorporation laws in places like the Cayman Islands.
These laws were all put in place for different reasons and for different industries to benefit. With regards to royalties, the US part was specifically there to help the movie industry.
Someone at Apple one day spent some time drawing lines between all of these laws and had an "ah ha!" moment. Incorporated a bunch of shell subsidiaries in each of these countries and had them pay "licensing royalties" to each other using profits from hardware sales (again, totally legal) and boom: no taxes paid on foreign profits.
Then everyone else saw this and did it too.
It means they wanna get rid of a connector they feel is outdated. Like parallel ports, CD drives, etc.
IDK if any of those can be blamed on Apple. In the beginning, yes, sure. But nowadays, it is just not possible to manufacturer tens of millions of iPhones every quarter in the US. They tried to shift Mac production (much less demanding) to the US and found they couldn't even get the supply chain for *that* fully in the US. This isn't even a problem of cost anymore. The Chinese simply do it better and on a bigger scale even if you don't account for the difference in labor costs. After all, if cheap labor is all you need, iPhone production should've moved to Vietnam or Malaysia by now.
As to taxes, again, their fault for finding the loophole and exposing it to all companies to use. But taking advantage of a *legal* way to pay less taxes is in no way "douchebaggery". It's Congress that's at fault here, they made the laws the way they are. I doubt you or anyone voluntarily pays more taxes than you legally owe nor would such an act make much difference. It only makes a difference if *everyone* does it, not just one entity. And that requires a change in the laws.
Apple is first and foremost a company that wants to sell stuff. That involves a lot of technology but it has never been the only thing they've focused on. Throughout its history, the company has banked (literally and figuratively) on selling stuff based on "the feelz" -- that warm glow of self-righteous euphoria their customers want to feel after purchasing their products.
What gives a demographic "the feelz" changes with society and culture and can very well be nudged by marketing. Today's society is much more concerned with social justice, diversity and charity than it was even 10 years ago. And so it can be argued Apple is doing the smart thing by changing their image to be one of social conscience.
There's no need. ISA really doesn't matter that much except in very-small-scale processors (think microcontrollers). You can make a very tiny and very power-efficient CPU using almost any ISA you want provided you have:
1. Compilers that are well tuned to your ISA
2. Good microarchitecture to run the ISA on
And then you need software that's written for that ISA. ARM didn't win out mobile because of its ISA. ARM won out mobile because the IP was low-cost and ARM poured tons of resources into developing a good ecosystem with compilers and toolkits.
I see RISC-V as being somewhat competitive only because it is open-sourced and therefore doesn't cost anything to use. But it has a long long way to go before the ecosystem (including SoC bus-fabric IP) is anywhere close to ARM.