We appeared on the Melissa Harris-Perry show on Saturday to participate in a discussion of the Senate Permanent Subcommittee on Investigations hearing on Apple’s astonishingly low tax payments.
This was a lively discussion and I had to push a bit to get my comments in.
The discussion was in two segments. I believe if you watch the first clip, it will roll into the second, but in case not, I’ve included the second one as well.
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Great clips, thank you.
I appreciate that you pointed out so clearly how much corporations are subsidized indirectly (especially by NIH grants and science research grants–so big pharma and big tech companies get lots of development work paid for by the federal government).
On your last comments in the program, I have 2 questions.
1) I didn’t understand the potential benefit down the road, something about corporations loving income tax. . .
2) You mentioned “What if France brings in an upload tax?” Does this refer to a fee for putting content on the internet, or to a tax on something else?
On a related (re Government Subsidies), across the pond, note:
05/17/13 ‘Just a joke’: Amazon gets more money from UK government grants than it pays in tax
On the upload tax, one way it would work would be to charge content providers for every MB uploaded to them. So (say in the US), Verizon and Google would be charged every time you sent e-mail, Facebook every time you put up a photo, You Tube every time you uploaded a video, iTunes every time you made a query re a song (although queries take vastly less in the way of bitstream than a video does).
Think of it as analogous to a toll for Internet usage.
So they’d have a charge per KB for everyone delivering content up through French servers. You could also do it on downloads. But the point is they’d hit the tech companies (directly and indirectly) who’ve been the most flagrant about evading income taxes. And this sort of tax would not be deductible from their income taxes.
I’m sort of leery of these kinds of solutions, not because I think they’re necessarily bad ideas, but because I know how in-the-pocket US law-makers are to business generally, and how easy businesses can get legislation cutting around such laws specifically. Of course I’m no expert on these issues and I know far less about them than you so I by no means think my opinion on the matter is unassailable, but from my experience as an observer of US politics, I’d expect tech companies would first pass the “costs” of the tax on to their consumers, then lobby and get laws cutting them exemptions to the tax or getting them subsidies that zero it out, then continuing to charge the higher rates to their customers; essentially using a tax meant to get around thier tax-dodging as a justification for increased prices.
The real problem of US tax policy is that our politicians are corrupt, and because they are corrupt, even enforcing the laws we have on the books can be difficult for those agencies responsible for doing so. Methods like this might work for a few years(though even that seems questionable given the travials of Dodd-Frank), but eventually they’ll get undermined if we don’t fix the underlying cause, which is political corruption.
Did you miss the bit that it was the FRENCH who might do something like this? I’m not saying an upload tax specifically, but a sales or usage charge that would hit multinational tech companies that are tax evaders.
I can’t help but feeling that the reason for the congressional hearings was not to chide apple,for not paying taxes.What it seems like to me was this was a ruse, so that all the pundits can point out to gullible americans that these “law abiding american job creators”, really just need a “fair” tax code.i.e. meaning a LOWERING of corporate tax rates so these law abiders can bring those tens,if not hundreds of billions of dollars back into this country.WHere it can be used by the executives for …well… whatever they want..
My answer to them is/would be… go screw yourselves.
After we really look at anti-trust issues…We jack up the corporate tax rates on the fortune 500 companies.Letting the vast majority of corporations,be.
What we will do is:
Raise corporate income taxes.Close tax loopholes that allow off-shore subsidies/tax avoidance….
And if you “threaten to move abroad”,well our re-institution of import tariffs,which will hit your products heavily, when you attempt to sell them in THIS market, will effect your sales, for sure.
I say screw apple. and the like. They aren’t doing anything important, and nothing that others can’t do in a real ‘free market”
If they don’t like it, I say “burn them to the ground”. And let some other entrpreneuer, who will be reasonable, take over the market share they will be conceding.
Indeed, and the ‘primo’ fair tax nonprofit in the U$, CTJ (Citizens for Tax Justice) wags fingers at despicable ReThugs such as Rand Paul, but can’t be bothered to note that Pwogwessives, such as Barbara Boxer (see Boxer sponsored 01/25/11 Senate Resolution Number 25, and read between the lines), are fully on board with the $wine Fe$t.
Our ‘primo,’ pwogwessive! Tax Justice!!!™ DemoRat nonprofit couldn’t be bothered to be outraged that income averaging for average citizens should never have been repealed while Multinational Corps[e] “Net Operating Losses” (which aren’t really losses at all, most especially as the average citizen understands a crippling, life threatening lo$$ in a hideous $ys$tem which values money more than life itself), allowed to be carried back and forward (for years), have flouri$hed to the detriment of all else.
They couldn’t be bothered to be outraged that those middle aged, swept under the bus forever, paid astounding penalties for needing to cash in their retirement funds to pay for a roof over their head. Although, the sick and demented U$ government does allow penalty exemptions for those who spend their retirement funds going back to online skool$ (when they know perfectly well that a lack of education is not why the middle aged can no longer make a livable wage). So, all you middle aged who’ve lost your shirts, cash in your retirement funds, live under a bridge, and attend classes, and we won’t penalize you.
great to see you speaking truth to power. thanks for saying what you did. only wish you could say more. your efforts and knowledge makes a big difference. would love to see you on a talk show.
i mean, have your own show.
The thing about this issue that annoys me is that the US government already taxes overseas income…. of US citizens who reside & work abroad for non-US companies. The framework already exists to tax US corporate overseas earnings; our government just doesn’t want to do it. Somehow, it’s more important for our elected leaders to grind the middle class with their $65k average annual salary with a tax burden than it is to generate revenue from the trillions of dollars sitting in overseas tax shelters via offshore corporations. Just another example of how corporations are people too, but just a little more equal.
This Apple vs taxation issue is an inspiring and encouraging event! Corporations should not be required to pay taxes on their profits. They pay their employees, (including their CEOs) and stockholders, and these folks then pay taxes. If they did not have profits to invest in new products, this creation of taxable income would not expand. (Unless of course you think the corporation should be forced to borrow.) Think about this. What else can a corporation do with its profits? Possibly the international corporation is a very intelligent invention that in reality protects the “seed corn” from the predations of the government. The next intelligent step might be to eliminate taxes on domestic corporations. This would enable them to create more taxable income and useful products on a long term basis and of lasting benefit to society.
wow, the Free Market!!!!™ $pamBot$™ get more and more complex every day. Pwogwe$$!!!!™, Hope!!!!™, ₵hange!!!!™
Oh, puhleeze. The double tax argument is stupid and the innovation/job creation is empirically false. That is all you have?
Citizens pay sales and gas and airport taxes out of income that was already taxed.
And the last time we had a tax holiday for these tax-evaders (2004) the money they repatriated went to bonuses and dividends. The companies that repatriated $ actually CUT jobs after 2004.
Yves,
If they possibly can, most small corporations in the US pay their employees and shareholders an amount that will minimize the corporate profit precisely to avoid “double taxation”. So there are a whole lot of “stupid” business owners out there. Consequently they do have less for innovation and expansion unless they borrow, which of course increases their costs and enriches the bankers you so thoroughly despise.
And the last I heard, folks must pay taxes on “bonuses and dividends” too.
As I have mentioned several times on this forum, the cutting of jobs has a great deal to do with the digital revolution we are experiencing. It is not an evil plot to deprive folks of their jobs. Doing things with a large number of hands instead of using high tech equipment is one of the most certain ways to go broke. The competition is not going to reciprocate by putting themselves on the same playing field and the consumers are going to purchase the most cost effective products. This trend is not going to reverse itself and most probably will intensify. One might as well rail against the wind!
what focking cru$t, your’e going to now conflate failing by the shiteload, non publically traded teeny “s corporations,” to Apple, Google FaceBook, Amazon? You were referring to Apple, clown, not some teeny, soon to flounder s corp, versus a a predatory $CORP.
Further, re:
if that’s so, why do you still have an income, spitting out the same ole $hite that $pamBot$ do, Dave?
Dave,
Are you talking about Apple or small corporations? Either way, any corporation can pay either their employees and/or shareholders enough to avoid a profit, thus avoiding double taxation altogether. Why do you suppose they don’t choose to do so? Why would Apple choose to offshore jobs to China, tech companies push for H1B workers when new STEM grads have a 50% rate of unemployment and current workers over 40 are being laid off, or Walmart pay non-livable wages yet rake in billions in profit?
Just as I would prefer taxable income to no income, they realize that profits that are taxed are still worth more than no profits at all? A company that pays their employees more as a means to avoid double taxation is an unusual company indeed (whereas increasing dividends can be attributed to a less than altruistic motive, as executives are often large shareholders). It’s far more likely that the minimum wage rate necessary to hire qualified workers will be paid.
Warren Buffett says when he calls somebody to tell them he has a deal for them that is sure to make them money, they never express concern about the taxes they might owe.
Yves,
Taxation is unnecessary. It would be more productive to ask the rich to not spend too much and then their money in the bank simply represents a “score”. Which would motivate them and other wanna be rich to work harder and produce more!
Then the government can issue currency and just give it to the public without creating inflation.
Unspent money does not consume resources.
more at:
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
mansoor h. khan
oh do stomp, just like a spoiled nasty brat, in that stench filled manure pile about being fair to monsters. Monsters who would murder their own kin for a focking worthless nickle.
Diane,
You are getting the money in my scheme. What is your problem?
Mansoor Khan
Could it be that I’m old enough enough (like you) to understand that the word $cheme has such a high $tench to it, man$oor h. kahn … ?
(oh, that $mall ₵ase ‘name’ is such a ₵ute touch …. from $omeone who clearly de$pise$ being taxed to contribute to the public’s well fare, no matter how irrelevant that tax is to you in the $cheme of thing$.)
Diane,
relax. please think about what I said.
I create a 1000 loaves of bread as a entrepreneur. The government prints currency and gives it to the public. The public gets 1000 loaves of bread (from the entrepreneur) and the entrepreneur gets $1000 bucks (assuming a loaf is for a $1).
If the entrepreneur spends much less than a $1000 on himself there will be very little or no inflation!
mansoor h. khan
relax? I am not the one who felt it nece$$ary to justify myself on a web site where I never ever (at the very least, rarely, just in case I’ve missed it) comment, you are, Man$oor, …and on a holiday, at that.
Perhaps you need to relax, after all, sharing is healthy, $ir.
Diane,
my idea:
http://aquinums-razor.blogspot.com/2011/02/give-500-per-month-to-each-us-citizen.html
mansoor h.khan
my, my, I just can’t keep up with your $cheme diatrobe, but I think my response (directly above your 9:03 PM EDT comment) might suffice.
diane,
Your tone is out of line. More like that and you go in moderation.
Eisenhower’s top rate of 91% would solve a lot of problems. IMNSHO we focus a little too much on corporate entities, and and not enough on the very small number of individuals who control those corporate entities, for their personal benefit (which is, after all, what accounting control fraud is all about). Alternatively, or perhaps in parallel, entartisme…
Eisenhower’s top rate of 91% would solve a lot of problems. IMNSHO we focus a little too much on corporate entities, and not enough on the very small number of individuals who control those corporate entities, for their personal benefit (which is, after all, what accounting control fraud is all about). Alternatively, or perhaps in parallel, entartisme…
I would have worded that:
So true Mariannejones so true and I’m glad you brought that up. Has anyone here really looked into “FATCA” which went into effect in January 2013? It’s an insult to all Americans living abroad and their families.
http://americansabroad.org/issues/fatca/fatca-is-bad-for-america-why-it-should-be-repealed/
Implementation of FATCA was delayed until 2014. Americans will have to be insulted the same as citizens of other foreign nations…… to the extent they attempt to hide assets in foreign institutions in order to avoid paying taxes owed to their home country. Of course, one can be legally exempted from owing US taxes simply by surrendering U.S. citizenship.
This whole issue is a bad joke wrapped in political deception.
The yuppie plutocrats like Cook say “GIMME, but we don’t wanna pay anything!”, and the Congress-crats (both kinds with hands out to grab all bribes!) and all Presidents over the years (again both kinds!) re-jigger and manipulate the tax laws to suit the plutocrats, and tax collections are then a bad joke hardly worth the effort.
The deception comes from blaming the Cayman islands (just a few shoals barely above the sea as I remember them), or Ireland or Singapore, etc., etc. We and our corrupt politicians and their hired-gun, stumble-bum MBA helpers are the ultimate source of the problem.
The dude on your left looked like he was checking you out. haha. Seriously. I would. How can any conversation like this make sense to a probing mind and so one thinks to themselves, “Well, here I am, might as well relax and check out the women.” Nobody knows what money is anyway, so if there’s more or less of it in taxes here or there it’s like more or less of a puffy cloud in the sky. In an hour the atmosphere may change so much the cloud is gone. The money doesn’t run out or run in. It’s continually emitted in waves, from infinite imagination and into the infinite void. In bewteen it animates the forms of social interaction with a wave/particle duality where money = property like wave = particle, and the forms rise and fall in imagination like solar flares. They’d never get to the bottom of this in one TV show, and so the fallback option for conversation is justice, which certainly is one facet of the wave function that defines the range of property form potential. IT may be an INET grant can help this philosophy bloom into a 4 or 5 bagger. Why is it so hard to get lucky in the stock market in one or two months and then not work. It’s hard to know now if GLD is a good bet finally or whether it’s penny stock time. One way or another you have to go for it, taxes or not.
Thank You Yves!
You are always edifying and uplifting. You tie together the overlooked, fundamental, contributory factors that drive and fuel the unspoken agendas and narratives.
Your intellect and speaking ability are ferocious – you roar.
Caveat: I’m sometimes conflicted when offering praise because excessive praise can lead to hubris or a cult of personality. I appreciate your humility, Yves, because it is consistent with a belief in social equality and a dialogue among peers.
Thanks for uploading this, I would have missed it for sure, not being a TV watcher except occasionally. Good to see you on more “mainstream” venue getting yourself out there. David Cay Johnston is a PRO. He does this a lot. He is not shy and I’ve heard him give serious pushback to interviewers if they tried to cut him off and not let him say what he wants. You did great notwithstanding the tough competition sitting next to you. And he’s a great speaker, too, have made a reputation for being able to break this complex tax stuff down for more general audiences. You did very well.
I am heartened to see such discussion anywhere in MSM land. If only the public could see more of this sort of discussion.
Good contributions Yves.
Cook says Apple abides by all US laws. Is it possible that a corporation could arrange such a sweet deal in Ireland with out bribing at least one foreign official?
And would not that be a violation of the Corrupt Foreign Practices Act?
Wow, Can’t believe the mis-information here. Transfer pricing was beyond poorly described. Fact is if an asset is not properly priced the government will challenge it and does. Second, Tim Cook is right, congress sets the tax rules. If Congress feels the system is out of date and not reflective of intent, it’s more than appropriate to investigate, hold hearings, and debate changing the rules, but to make accusations that Corporations are imorral or breaking the law by exploiting what the tax-code offers them is rediculous.
Agree the tax code needs fixing, disagree with the rhetoric.
CofC,
You are WAY out of your depth here.
1. The government in fact pretty much never challenges transfer pricing in tax cases. This has been the case for quite some time. Large corporations can muster armies of valuation experts to justify pretty much anything. The IRS has lost enough of these cases that it doesn’t fight them, save for small fry on flagrant abuses.
2. The “check the box” system is very much an IRS administrative matter which the IRS could change. It implemented it in 1996 and wanted to reverse it in 1998. It backed down when Congresscritters (put up to it by large corps) howled.
In 1998, deficits were low and moving towards a surplus. In addition, no one in important markets for multinationals was challenging tax policy. Governments all over the world are now hungry for revenues and the US is much less loved and much less dominant a power.
Please don’t opine authoritatively on topics where you lack expertise.
Yves, thanks, this was great. And thanks for explaining the upload tax idea. Please post the link to the Lee Shepard article you mentioned.
Medusa needs speech therapy. Is this some kind of self esteemb building media creation for ugly girls when the rainbow isn’t enuff?
You are a sad little man aren’t you?
The “b” attached to esteem might not be a typo…
Management is quite displeased that the tech crowd has tried to ignore their offer that can’t be refused.
No doubt Congress will ultimately be successful in shaking down Apple, a huge outlier for how little it spends on lobbying and political activities and a company that publicly withdrew membership from the US Chamber of Commerce, to ramp up the printing presses.
Clearly Congress understands the need to exploit new markets. Just look at all the potential. Google is the only tech company in the top 20.
Or maybe the finance and healthcare and defense and real estate and telecommunications and media and other actors are just really bad at lobbying :)
http://tech.fortune.cnn.com/2013/02/18/apple-google-lobbying-washington/
http://www.opensecrets.org/lobby/top.php?showYear=2012&indexType=s
http://www.environmentalleader.com/2009/10/05/apple-drops-bombshell-immediately-withdraws-from-u-s-chamber/
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