
Tim O'Reilly's Reflections on Apple's Tax Avoidance Tactics - scottkduncan
https://plus.google.com/107033731246200681024/posts/JpobfLAreyo
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carbocation
This is a classic example of singling out one particular actor for blame when
the problem is clearly systemic.

There is little value for society to spend its time saying, "Apple is bad
because it minimizes, within the contours of the law, its tax burden." And,
contrary to Mr. O'Reilly's assertions at the beginning of his piece, I don't
say this because I think Apple can spend its money better than the US
Government can. For this argument, I don't care either way because it's
irrelevant; he merely dismissed a strawman.

The question has to do with our tax code. Is it achieving the goals that we
created it to achieve? If so, then there is nothing to discuss, so presumably
it's not. If it's not achieving its goals, let's look at the entire picture
and talk about where its failures are and how we should change it. Attacking
any one particular company is merely a distraction that impedes our ability to
discuss the things that actually matter.

~~~
dredmorbius
When that actor is that largest player on the stage, and the article (and
Tim's commentary on it) make clear that many others are simply playing the
same game, then your criticism falls doubly flat.

The biggest and most profitable companies are avoiding huge portions of their
tax obligations. It's a systemic problem. Both points are made by the NY Times
piece and Tim O'Reilly's commentary on it. It's hardly a distraction.

And yes, the underlying dynamics of the problem are manifold. Both statute and
regulation should change.

~~~
carbocation
Unless you alleging fraud, then it's patently incorrect to say that Apple is
avoiding its _obligations_. Apple is merely demonstrating what their
obligations under the law are, and people aren't liking what they see. That's
fine; let's change the tax code.

~~~
dredmorbius
Given that 1) the law involved is tremendously complex, that 2) enforcement
and compliance actions by the IRS are hugely underfunded and undermanned, and
3) that corporate and monied America has an undue direct influence on the
legislative process, including tax legislation, then I'd say that de facto
fraud if not de jure fraud is an open question.

------
brackishlake
I'd love to hear about a PERSON who routinely went out of their way to overpay
for a service. When was the last time you arrived at a store, saw a shirt, and
said, "I'd like to pay you an extra $10 for this shirt because I believe in
what you're doing."

Never.

For that matter, when was the last time you called up the IRS and said,
"Dammit America, you're doing such a good job, I'm sending an extra $5,000."

Never. In fact, the most you or I have ever given extra is the $3 election
fund.

Let's stop joking around, people. Companies, like people, are going to find
ways to pay as little as possible, so long as it's legal. Let's stop blaming
Apple and blame ourselves: reform the tax code to be simple, fair, and
progressive.

~~~
vacri
I'd love to hear about a PERSON who routinely funnels their income tax through
a different country so that they pay less tax, despite not really living or
doing much business there, nor stamping Designed In Different Country on
everything they make.

~~~
dap
You can't legally do that. That's an important difference. But you can do
other things to reduce your tax burden, and people _do_ hire tax professionals
to do that. H&R Block even has a "Maximum Refund Guarantee".

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jerf
A classic substitution, substituting an argument that government should exist
for an argument that a government should get a given bit of money. It's not
the same question, and following that substitution to its logical conclusion
leads to the government needing 100% of the money. (And I do mean _logical_
conclusion, not extreme conclusion. This is a fallacious argument.)

Those libertarians he references are strawmen.

~~~
skore
I disagree. From what I understand, he is not talking about _government_
needing the money, but _society_ needing the money (in his example, which is,
after all, the central reason for his post, he talks about him taking in money
for a group of people to organize an event for everybody).

This maps well to his addressing those "strawmen" libertarians. Most
libertarian rhetoric builds on the fact that people have been made suspicious
of government and are suggested to think of government as "the other".
Likewise, you seem to try to force his argument on its head - Nobody argues
whether government should exist and you suggesting it makes me wonder how
closely you've read the post.

"The Government" is the subgroup of society who have been elected by the rest
of society to invest part of societies resources to the advantage to
everybody. The basic math being that society will be better off having spent
the money in that way than had it kept the money. Whether or not you agree
that that is happening, that is the basic plan.

Tims post simply says: If we want to be a society, that comes at a cost and
somebody has to pick up the tab at the end of the night and the system to make
that happen is called taxation.

Claiming that this in itself "fallacious argument" because _you_ actually know
what his argument is seems ambitious, but I simply have no idea where you take
that from. Let's argue the reverse: Since you don't seem to disagree that a
government in itself is a good concept, who do _you_ think should pay the
price for it?

~~~
jerf
"If we want to be a society, that comes at a cost and somebody has to pick up
the tab at the end of the night and the system to make that happen is called
taxation."

Your own summary simply repeats the fallacy. That someone must pick up the tab
does not imply that the tab must be larger than it is today, or that the tab
must be paid for by this particular chunk of money. It does not follow. It is
not a logical argument.

It isn't even about libertarianism. It doesn't even rise to the level of an
argument against libertarianism, because it isn't well-formed enough to even
be called a proper argument. "We need a thing" and "We need more of a thing"
are _two completely different arguments_ , and you shouldn't allow one
argument to be substituted for another without noticing.

~~~
skore
Well, that's another thing that nobody is arguing. Maybe that really is where
you misunderstand Tim's position: He does not say we need more taxation, he
says that there are actors in the game that do not pay their fair share.

You're doing your own argument a disservice by trying to modify the position
of your opponent. That's not how discussions work.

The position that Tim (and I) argue is simple: There is X amount of money that
it costs to run society. While, yes, we constantly have to figure out what
that amount is, there is no question that it should be paid by everybody in
that society. And that the stronger players (who both benefit most from a well
funded society and who have the most to give) should be decent enough to step
in appropriately.

~~~
carbocation
Were you 'decent enough' to pay more in taxes than you owed this year? Of
course not. Why should anyone else feel compelled to do so?

~~~
skore
Phew, I'm not sure whether I even have to respond to that non sequitur.

Obviously I'm not a big corporation and obviously we're talking about tax
loopholes here, not paying extra taxes on top of what you owe.

~~~
tedunangst
What is a loophole, if not something that reduces the amount of tax you owe?

Concretely, how do you propose Apple calculate how much tax they owe if "the
amount the law requires" is not the correct amount?

~~~
vacri
I'm sure it was the intent of the framers of tax law that large corporations
should funnel a third of their income to a different country as part of "the
amount the law requires".

~~~
tedunangst
Apple is a company, not a mind reader. How are they to know where to funnel
the money except where the law tells them?

~~~
vacri
I think you'll find the law does _not_ say "US corporations should funnel
their money to Ireland". Apple (and other corps) hire people to find edge
conditions in law that they can exploit - they are not the doe-eyed innocents
'complying with the law' that you're painting them as.

They are dodging tax laws using technical loopholes, not complying with the
spirit of the tax laws. Stop being an apologist.

~~~
tedunangst
How hard would it be to write a law that says "don't funnel your money to
Ireland"?

~~~
vacri
If you think it's that simple, try writing to your representative with your
solution to the problem.

But ultimately the issue is you painting them as innocents in this, 'they're
not mind-readers', when the main article suggests that they were actually
aggressive pioneers in finding ways to dodge the spirit of tax laws.

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waratuman
His family example doesn't really work. If we had all agreed to throw this big
party then each person who agreed stated his obligations to the party. If
someone had not agreed to the party, they simply would have not payed and not
come. This is not how it works with the government. You are forced to come to
the party and pay for it to make everyone else happy. It does not matter that
it cost you or that it is not what you want to do. You must surrender yourself
for societies "greater good."

It is also worth mentioning that happiness is a subjective value. It is
pointless to draw a conclusion about what make society happy when only
individuals can be happy. If someone goes their own way, they are not leaving
happiness on the table, they are seeking it out elsewhere.

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glenra
I don't see how Tim's conclusions follow from his premises.

If we are supposed to think of general taxation and the overall amount of
government spending as reasonably justified on the grounds that these things
were the outcome of a democratic process which "the people" (somewhat
indirectly) agreed on, doesn't the same logic suggest that _the loopholes_ are
similarly reasonable and justified?

Loopholes aren't a bug in an otherwise perfect system; they are _part of the
negotiating process_ that produces laws. If it weren't for the loopholes,
legislators wouldn't be able to find support for tax rates as high as they
are. The loopholes are there for a reason. The loopholes are _part_ of the
exact same "social contract" that produced the taxes.

~~~
skore
No, that would be overly relativistic. There is a huge corporate culture that
drives tax law lobbying. This has created a situation where tax law more
likely reveals the will of the corporations, not the will of the people.

~~~
yummyfajitas
There is a huge government union culture that drives spending law lobbying.
This has created a situation where spending laws more likely reveals the will
of unions, not the will of the people.

~~~
skore
That may or may not add to the problem, yes, I'm not an expert in that area.
If I was forced to guess, though, I would still say that most of the money
influx comes from corporations.

~~~
yummyfajitas
You'd be wrong. Plenty of money comes from unions.

<http://www.opensecrets.org/orgs/list.php?order=A>

However, the point I'm making is that once we claim the democratic process
doesn't justify the taxation side due to lobbying, we also can't claim the
democratic process justifies the spending side.

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DennisP
The whole point of taxes is that we can't rely on voluntary donations to fund
public goods. It's pointless to argue that people or corporations should
voluntarily pay more taxes than they're legally required to pay.

~~~
skore
> _It's pointless to argue that people or corporations should voluntarily pay
> more taxes than they're legally required to pay._

[[Citation needed]] - don't see what you're talking about in the post - _who_
is arguing that?

~~~
eli
Are there major corporations already doing this ?

~~~
skore
I don't know and that's not what I was asking - I tried to clarify that I was
asking OP to cite where in the post that this discussion is about somebody
argued that corporations pay voluntary, additional taxes.

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EricDeb
I admittedly have a poor understanding of corporate taxation and offshore
avoidance, but this example makes sense to me. Though government is not a
family, and it is safe to say all parties will act selfishly. This may further
his argument that there should be no tax exceptions or render it irrelevant,
I'm not sure.

------
jbarham
The family analogy is heart-warming, but scaled up to a societal/country level
it can lead to destructive practices like nepotism and tribalism.

~~~
3pt14159
The way I usually say it is like this:

Communism works best between two spouses, a little worse with immediate
family, a little worse with extended family, a little worse with orthodox
religious communities. People can see the trend. As the number of people that
get involved goes up the total number of connections goes up n + 1 choose two
and the chance that you deeply care for them goes down.

