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View Diary: Apple launches iRomney (62 comments)

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  •  Are we attacking the symptom and not the disease? (5+ / 0-)

    The fact that Apple can pay an outrageously low income tax is pretty atrocious (My exhausted memory thinks that their tax rate is 4% of revenue, but I can't remember where I read that and I could be viciously wrong).  Obviously, they're not paying their "fair share" as compared to the average working stiff who pays more than that solely in FICA taxes.

    But they're doing what comes natural to any business or even any person - making as much money as they can, and if they're doing it legally, ranting at Apple as an evil corporation is not a good use of energy. (of course, if they're doing it illegally, then the ranting is righteous and should continue).  I support higher taxes, but that's not incompatible with making sure that I request the largest tax refund that I can lawfully receive.

    We really need to, as a strategy, use this not to vilify individual companies, one by one, but to show how horribly unjust it is that companies can so thoroughly game the system.  International business and treaties are the cause of this - it's the exact same reason that so many oceangoing vessels fly Liberian flags - because they can.  It's perfectly legal and the tax, cost, and liability benefits are obvious to anyone in the cargo business with two brain cells to rub together.

    These sorts of games need to be made illegal - revenue needs to be taxed where it is realized, not in a post office box in Ville de Luxembourg.  Companies need to be registered in the place or places that they operate, not in a file cabinet in Dover.  This is a fundamental change that we need to enact throughout the world's economic systems  This is the kind of thing that requires high-level treaties, and we can get all the big economies on board for this kind of thing if they are all playing by the same rules, because all of them suffer from the loss of tax revenue to places like Luxembourg and the Isle of Man.

    I recognize that you say exactly what I'm saying (except far more eloquently than I) once people read below the iCurlyQ.  But a lot of the other coverage doesn't, and that bothers me.

    I buy a lot of Apple products and, income permitting, I'll continue to buy Apple products, because at the end of the day, they're not violating the laws and, in fact, the laws today encourage gaming the system.  The only difference is that, compared to many companies, they're better at it, and competition needs to be based on the quality of a company's product, not the quality of their tax lawyers.

    "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

    by auron renouille on Fri May 24, 2013 at 07:45:23 PM PDT

    •  But when did everything legal become OK? (2+ / 0-)
      Recommended by:
      Patango, claude

      Apple's tax-dodging antics are widely applauded by the very culture to whose maintenance it contributes as little as lawyerly possible. And that would be us - American culture - dutifully worshiping at the free market altar, shrugging and saying, "Well, that's just smart bidness". We're as dumb as a box of floppies and deserve whatever corporate-gilded screwing we masochistically permit.

      Maybe 12 1/2 people won't buy Apple products over this. We need a culture shift, massive, until it becomes not at all OK to dodge, squirm, and squiggle out of every dollar-signed social responsibility a company or an individual isn't legally required to fulfill. M.Path.E Pluribus Unum.

      Possibly this won't happen soon. Pass the Two-Buck Chuck...

      •  Apply it to GE, for example, and so many others, (1+ / 0-)
        Recommended by:
        sfbaytransplant

        and your principle would not work.

        I doubt all but a fraction of taxpayers overpay their taxes intentionally.

        A much better challenge is the incredibly byzantine tax laws that achieve those results, that introduce legally permissible fictions into business and investment decisions, that induce corporations (and perhaps individuals, too) to make decisions based on tax effects as opposed to solid business decisions. Apple deciding to borrow to get an interest deduction, for example, than re-patriating their offshore stash.

        The following is too simple a solution, but it may be directionally right - decrease the corporate rate to, say, 25%; set a more strictly enforceable minimum rate, say, 20% despite any other deductions, credits, preferences, etc; increase the repatriation rate to 40% to be effective, say, four months after the new rates go into effect.

        2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

        by TRPChicago on Sat May 25, 2013 at 06:15:39 AM PDT

        [ Parent ]

        •  In terms of practical solution, (0+ / 0-)

          your approach is, of course, a whole lot less Pollyanna-ish than mine. I prefer a fictional approach to problem-solving, preferably involving dragons, magic and lots of lore...and horses...

          You suggest, I think, that the complexity of the tax code has, in itself, turned tax avoidance into a sort of game. The winner successfully games the system. I get that, and it's a valid point. But when, and why, apart from a small, sterile nod to a well-played battle of wits, did gaming the system become so otherwise forgivable, and even laudable?

          It is our system, after all. Do we intentionally set it up as an adversary?* If so, why?*

          *rhetorical questions

          •  It's legislated tax avoidance, plain and simple. (0+ / 0-)

            I don't think what is going on is "gaming."

            It's not a set of tricks and strategies, it's not underhanded. It's not like one player can stack the deck and get advantages others just aren't up to speed on. It isn't - "Ah Ha! I found another gap in the law I can squeeze through!" The tax laws aren't adversaries, nor is the system they represent.

            What is happening - by Apple, GE and a host of other very large and successful businesses - is the deliberate use by expert craftsmen of intentionally established US tax laws and regulations, used as intended by the people who wrote them. YES, the effect is for taxpayers who can take advantage of them, to pay lower taxes, and lower and lower.

            The tax code is very involved and elaborate - byzantine, I am fond of pointing out. It is those things by design. These deductions, credits, offsets, preferential rates, moratoriums and postponements are almost all deliberate policy choices. These are not "loopholes" as in accidental hiccups no one thought of, "gotchas" sprinkled throughout the law. The tax law writers thought of them and intentionally provided for them, and many had public hearings, publicly proposed rule-making, etc. True, there is not universal logical or policy coherence. Some are the result of horse-trading and compromises, some limit the amount of revenue loss, some are intentionally discriminatory (favoring one type of investment or activity over another), etc.

            True, too, that businesses and investments can be structured differently than they might otherwise be to exploit the provisions of the tax laws. That happens all the time, but those are business decisions being "gamed", not the tax laws.

            Gaming vs. intentional policy-making is a critically important distinction for me because it's what makes it so impossible - I don't lightly use that word! - to "fix" or "reform" the tax laws. There are beneficiaries of each of these provisions, rationales to keep this if you're going to do that, abundant arguments of how awful it will be for the economy if you repeal thus-and-so. The tax code is a briar patch that is beyond the power of even a wise Congress to change, short of obliterating the whole code and establishing a flat tax. (Good luck with that!)

            And that's what makes an override - like a minimum tax to recapture some of the income foregone - about the only likely way of fixing a byzantine system.

            2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

            by TRPChicago on Sat May 25, 2013 at 12:56:03 PM PDT

            [ Parent ]

            •  The notion that there is no such thing (0+ / 0-)

              as a loophole, ie, that corporations rarely take advantage of tax evasions which the tax code does not anticipate, is a little difficult for me to accept; perhaps it's my own prejudice, but that seems to grant a competence to the tax code that I'm reluctant to award.

              Your override certainly sounds practical (if somehow naggingly inelegant) to me. It may indeed be a workable solution, for now.

              But I hope you'll forgive me if I continue to hope for a cultural revolution.

              •  Go for it, brother! It's not "competence" in ... (0+ / 0-)

                ... the tax code or lack thereof, it's intentionality.

                True, the supporters and those who voted for this-and-that provision might not have realized or been told what all it might be used for, but there is intentionality there.

                There aren't "gaps" in the code. Basically, income is taxed, unless it isn't.
                If you're a taxpayer who needs something - some special provision to cover your special case - you get a lobbyist.

                My favorite is the provision - many, many years ago, and probably no longer part of the tax law - so incredibly arcane that for quite a while, no one was able to figure out who benefited from it. Turns out the sole beneficiary was a radio station. The first letters of each applicable paragraph of the tax code spelled out the call letters of the station. Now that is an elegant tax provision!

                2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

                by TRPChicago on Sat May 25, 2013 at 04:43:44 PM PDT

                [ Parent ]

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