4 ms·

In this case it's not a loophole in American laws. It's a problem with European and Carribean laws. This money was earned abroad. Blame the Irish, and now wh

In this case it's not a loophole in American laws. It's a problem with European and Carribean laws. This money was earned abroad. Blame the Irish, and now whatever this Jersey Island place is. The EU made a move to close the loophole, apple found another. I suppose there are loopholes with them selling IP assets to subsidiaries. But that's a different loophole than the one with them floating money around different countries. That money wasn't earned in America, so why are you trying to "repatriate" it? The better term would be "appropriate" it as it was never here in the first place. Until it costs more for apple to pay interest on a loan (and/or penalties and fines) than they would pay in taxes, that money will never come here.

_0ffh 9y ago
It's a British crown dependency, and afaik not the only tax haven under British rule. And it seems like there's no much the EU will be able to do about those.
- charlesdm 9y ago
  Perhaps this might change after brexit though.
  - toyg 9y ago
    Yes, French and German authorities have made it known that they cannot wait for brexit to happen because it will relieve them of any need to play nice with the UK about shenanigans like these. At the same time, the Irish border problem puts the Republic of Ireland in a similar position of weakness, and they are enemy n.2 for honest tax authorities worldwide. Enemy 3 and 4 (Luxembourg and NL) have also been weakened by the disappearance of the “free trade alliance” that ran from Poland to Ireland, and when left isolated, they have been successfully bullied in the past anyway. This is one of the very few areas where brexit might actually end up a net positive for the world at large.
    - charlesdm 9y ago
      Maybe. It's likely a UK-EU trade deal will appear before Brexit (in some way or another) and that might not lead to many changes in the end.
deong 9y ago
The US government doesn't, as a general rule, care if the money has ever been here. If you as a private US citizen choose to live and work abroad, you are required to file US income taxes and declare all foreign income. And depending on the precise details of the foreign government's treaty situation and tax rates, you may be required to pay the normal US tax rate on some or all of that income. I don't know that it counts as a "loophole" exactly that the system for corporations works the way it does. "Loophole" sort of implies an unintended consequence, when the reality is that the laws are written with the express purpose of making this type of tax avoidance possible.
- malandrew 9y ago
  At some point you tax people too much and they leave your country for one with better taxes. Never forget that the top 20% of citizens are responsible for like 87% of all the tax revenue the US and state governments rely on. In fact this already happens at the state level in the US: http://www.howmoneywalks.com/irs-tax-migration/ http://www.howmoneywalks.com/irs-tax-migration/ If the new cut cut cut tax plan passes and Californian's can no longer write off state income tax on their federal returns, you will see even more people leave California.
  - ubernostrum 9y ago
    Never forget that the top 20% of citizens are responsible for like 87% of all the tax revenue the US and state governments rely on. Never forget that you implicitly assumed this is because taxes on that segment are too high, rather than because various aspects of our economy were rigged to give those people a disproportionately high share of the total taxable income. In other words: there are two ways to reduce your tax bill, and only one of them requires Congress to pass a law that puts you in a lower bracket.
    - malandrew 9y ago
      > "various aspects of our economy were rigged" This is an entirely handwavy and unsupported assertion, whereas stating the percentage of tax paid by the top 20% is a statement of fact with no implicit assumptions. The people of a country get the tax system written by the representatives they voted for, and are complicit in any "rigging" of the economy. What we have is a tax code that is layer upon layer of exceptions that came about when Group A supported a tax on Group B to pay for a benefit for Group A. Sometimes group A is in the top 20% (e.g. taxes used to subsidize an industry) and sometimes group A is in the bottom 20% (e.g. taxes used for food stamps). The former arises from things such as regulatory capture and the latter arises from uninhibited populism. No politically active bloc of voters is innocent. Everyone from the rich to the poor are special interests and all are equally as guilty of "rigging our economy". Only a flat tax that treats no group as special is fair. I'm curious what you think of Nozick's Wilt Chamberlain example: http://resources.seattlecentral.edu/faculty/jhubert/wiltchamberlainargument.html http://resources.seattlecentral.edu/faculty/jhubert/wiltcham... In it, absent any tax code distortions, Wilt Chamberlain would end up with most of the taxable income through entirely voluntary transactions. If thousands of people voluntarily pay Wilt Chamberlain to be entertained and Wilt ends up with most of the income, is that a rigged system? Power law distributions in income are a naturally occurring phenomena. No rigging is required. If the system is indeed rigged, it's rigged in favor of the 45% of Americans that don't pay any federal income tax. They get all of the benefits at none of the cost.

_0ffh 9y ago

It's a British crown dependency, and afaik not the only tax haven under British rule. And it seems like there's no much the EU will be able to do about those.

charlesdm 9y ago
Perhaps this might change after brexit though.
- toyg 9y ago
  Yes, French and German authorities have made it known that they cannot wait for brexit to happen because it will relieve them of any need to play nice with the UK about shenanigans like these. At the same time, the Irish border problem puts the Republic of Ireland in a similar position of weakness, and they are enemy n.2 for honest tax authorities worldwide. Enemy 3 and 4 (Luxembourg and NL) have also been weakened by the disappearance of the “free trade alliance” that ran from Poland to Ireland, and when left isolated, they have been successfully bullied in the past anyway. This is one of the very few areas where brexit might actually end up a net positive for the world at large.
  - charlesdm 9y ago
    Maybe. It's likely a UK-EU trade deal will appear before Brexit (in some way or another) and that might not lead to many changes in the end.

deong 9y ago

The US government doesn't, as a general rule, care if the money has ever been here. If you as a private US citizen choose to live and work abroad, you are required to file US income taxes and declare all foreign income. And depending on the precise details of the foreign government's treaty situation and tax rates, you may be required to pay the normal US tax rate on some or all of that income. I don't know that it counts as a "loophole" exactly that the system for corporations works the way it does. "Loophole" sort of implies an unintended consequence, when the reality is that the laws are written with the express purpose of making this type of tax avoidance possible.

malandrew 9y ago
At some point you tax people too much and they leave your country for one with better taxes. Never forget that the top 20% of citizens are responsible for like 87% of all the tax revenue the US and state governments rely on. In fact this already happens at the state level in the US: http://www.howmoneywalks.com/irs-tax-migration/ http://www.howmoneywalks.com/irs-tax-migration/ If the new cut cut cut tax plan passes and Californian's can no longer write off state income tax on their federal returns, you will see even more people leave California.
- ubernostrum 9y ago
  Never forget that the top 20% of citizens are responsible for like 87% of all the tax revenue the US and state governments rely on. Never forget that you implicitly assumed this is because taxes on that segment are too high, rather than because various aspects of our economy were rigged to give those people a disproportionately high share of the total taxable income. In other words: there are two ways to reduce your tax bill, and only one of them requires Congress to pass a law that puts you in a lower bracket.
  - malandrew 9y ago
    > "various aspects of our economy were rigged" This is an entirely handwavy and unsupported assertion, whereas stating the percentage of tax paid by the top 20% is a statement of fact with no implicit assumptions. The people of a country get the tax system written by the representatives they voted for, and are complicit in any "rigging" of the economy. What we have is a tax code that is layer upon layer of exceptions that came about when Group A supported a tax on Group B to pay for a benefit for Group A. Sometimes group A is in the top 20% (e.g. taxes used to subsidize an industry) and sometimes group A is in the bottom 20% (e.g. taxes used for food stamps). The former arises from things such as regulatory capture and the latter arises from uninhibited populism. No politically active bloc of voters is innocent. Everyone from the rich to the poor are special interests and all are equally as guilty of "rigging our economy". Only a flat tax that treats no group as special is fair. I'm curious what you think of Nozick's Wilt Chamberlain example: http://resources.seattlecentral.edu/faculty/jhubert/wiltchamberlainargument.html http://resources.seattlecentral.edu/faculty/jhubert/wiltcham... In it, absent any tax code distortions, Wilt Chamberlain would end up with most of the taxable income through entirely voluntary transactions. If thousands of people voluntarily pay Wilt Chamberlain to be entertained and Wilt ends up with most of the income, is that a rigged system? Power law distributions in income are a naturally occurring phenomena. No rigging is required. If the system is indeed rigged, it's rigged in favor of the 45% of Americans that don't pay any federal income tax. They get all of the benefits at none of the cost.