It is not in the best interest of Apple shareholders for the quality of life in the US/California/etc to deteriorate due to missing tax dollars. Long-term, stable societies are much more useful for making money than a few billion in secret stash tax havens.
The honorable judge Learned Hand (yes, really) once said
> There is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.
As long as companies are staying within the bounds of the law, it's perfectly reasonable for them to keep their tax bill as low as possible, and one might even argue that (for public companies) they're required to do so in order to perform their fiduciary duty to their shareholders. If you have a problem with the "loopholes" that companies use to lower their tax bill, you should take it up with the people who make the law, not the companies that follow the law.
Here's why: for tax regulations created through a transparent democratic process and a popular mandate, this quote might be proper, but that's not what happens. The kinds of tax loopholes that allow for companies like Apple to dodge their obligations are created through corruption and regulatory capture, and would be choked off in a heartbeat if the general public actually had any say in the matter. Worse, they're simply not available to schlubs like you and me, so it's not a level playing field. To set up these loopholes in a corrupt way, and then use this quote (and the broader attitude of "It's legal, so it's OK!") to gag people from complaining about it, is despicable.
Fyi, Apple's stash of billions in foreign corporate structures is not "secret".[1] The IRS, the California State government, and all the Wall Street analysts know the money is over there in Ireland. In any case, Apple is complying with the law and paying the relevant foreign taxes (which are lower than the USA rates).
Since their revenue shuffling is not illegal, the more accurate criticism is if Apple is abusing legal loopholes. A lot of people feel they are.
The shuffling was illegal, that is why they are going to be made to repay billions. It was illegal for the Irish to not charge them the standard rate, not illegal for Apple to try to do a deal.
> Apple is abusing legal
> loopholes
http://www.cumber.com/the-euro-dollar-riot/
Excerpt: The US has peculiarities in its income tax code that create these incentives for companies to avoid repatriation. The last time those peculiarities were lifted was in 2004 when then-President Bush allowed a one-year repatriation tax break. Over $300 billion flowed back into the US. Discussions about repeating that tax break are stymied in the current administration. Estimates are that as much as $1 trillion in repatriation would potentially occur if the Congress and the White House could agree on this issue.
With the election approaching this is one issue on which Trump speaks eloquently.
For those curious.
http://www.bloomberg.com/news/articles/2016-08-24/trump-s-of...
What a disastrous moral hazard. The Bush family truly failed this country; they've left scars that will be felt for generations.
I would invite you to sit in local legislation and see how local taxes are enacted.
Specific to this scenario, you have a Sovereign nation (Ireland) that has it's tax laws, which Apple (presumably) is complying with. Then comes a bigger body, the EU, challenging Ireland's original tax laws.
If you're Apple, what do you do? You're doing business in Ireland, so why not follow their tax laws which have obvious benefits.
> Their fiduciary duty is to act in the best interests of their investors.
And if you paid every bill collector who came up with their hand out without first doing due diligence, you would be in breach of that duty.
Apple specifically did business in Ireland because of tax break incentives.
Apple, You, Me, and anyone else have no obligation to pay anymore than the barest minimum taxes legally allowed.
Maybe that companies are extremely efficient giving money to their shareholders.
But I don't see your point.
Welcome to the Cyberpunk era, where nations are private entities ... I can't wait to play CD Project game by the way.
Notice that these jobs were always mandatory part of the tax breaks. They'll likely disappear with the tax break, given that Ireland has since dramatically elevated it's living standard on the basis of low corporate tax (and special tax) and wages are no longer competitive for something like support jobs.
What do all those people do? do you know? I'm interested.
That'd be like re-scoring the 1890 World Series based on today's MLB rulebook.
You know its bad when the US Treasury department even disagrees with the EU commission
Here is to hoping EU politicians fix the tax system and force companies to pay a meaningful tax in the countries where they sell their products.
Personally, I'm not very optimistic considering J.C. Juncker is still one of the most influential EU politicians.
https://en.wikipedia.org/wiki/Jean-Claude_Juncker#Controvers...
They already did. The tax is VAT and recent changes on electronic services had exactly the goal you mentioned in mind. It's just that the idea of income tax for companies is silly as it requires the tax authority to verify valuations of transactions (for brands, services etc.) and that will never be doable. The fixing would be to get rid of income tax for companies and substitute it with different taxes (like VAT for example).
Those changes on electronic services make similarly little sense, as they require a service to apply taxes in the jurisdiction of the consumer rather than in the jurisdiction of the business. (And such regulations disadvantage EU companies, as a non-EU company with no legal nexus in the EU has no obligation to charge such taxes.)
The US and Ireland both signed off on the arrangement that apple and other companies use to avoid tax.
Now, a government that didn't exist at the time, is using new case law it has created, to retroactively change the tax laws of the governments underneath it.
Think of it as Europe's Marbury v Madison moment
It's kind of tricky because though the EU as it is today is relatively new Ireland joined the European Economic Community which essentially became the EU. Also whenever that rule came into effect the special rules Ireland gave Apple should have been reevaluated and removed. They've always been against the state aid rule it's just not been tried until now. As for "changing the tax laws of governments underneath it" that's part of being in the EU you give up parts of your national sovereignty in a number of areas for the benefits of being in the open market.
In some ways there is a fight going on with national governments telling corporations to start putting their hoarded cash to work in the various economies or else we'll take it and put it to work in the economies. In a number of dystopian futures there is an event in the past called the "corporate wars" and this kinda feels a bit like something you might call a corporate war.
[1] "Do I Owe Taxes On My Foreign Income?
U.S. citizens and resident aliens earning over a certain amount of income from foreign sources may have to pay income taxes on the foreign income." -- http://www.efile.com/foreign-earned-income-and-income-exclus...
Most US-based corporations who benefit from this scheme don't want their Double Irish with a Dutch Sandwich going away anytime soon [2].
[1] https://en.wikipedia.org/wiki/Regulatory_capture [2] http://www.investopedia.com/terms/d/double-irish-with-a-dutc...
Ha! I like it. US all of the sudden is defending Apple. Not because it loves Apple, but because it was hoping it would get its hands on those billions ... somehow.
EU here is basically saying, "ok Uncle Sam, fish or cut bait, do something. If not get out of the way, we'll take that money". So Uncle Sam is a bit upset at that, he doesn't like to be handled that way.
They will probably be various threats of sanctions from US and EU will buckle eventually. Maybe some scheme to divide the tax penalty between US and EU eventually.
Ireland's position is understandable. It could lose those companies overnight basically if this goes through.
This whole tax avoidance criticism just boggles my mind. There's a sale in China. One person pays money to another person in their country for a phone created in China that never left China. Yet somehow US citizens believe they are entitled to 30-40% of the money that exchanged hands there or it's "tax avoidance".
What is not a member of the UE prerogative is giving unfair deals to just some companies. This is what the case is about.
http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELE...