4 ms·

Smokey Yunick was a race mechanic famous for skirting the rules. My favorite was, gas tank sizes were fixed but he noticed that there was no rule specifying the

by ip26 8y ago

Smokey Yunick was a race mechanic famous for skirting the rules. My favorite was, gas tank sizes were fixed but he noticed that there was no rule specifying the parameters for a fuel line. So, Instead of a half-inch fuel line, Yunick created a two-inch fuel line that was 11 feet long, and held five gallons of gas. (A car with more gas has to stop less often) You could say he took a loophole. You could try, I'm sure, to argue "how could he have known he wasn't supposed to make a fuel line that way? What was the correct ethical size of a fuel line?". But it's pretty obvious to most people that took it too far, and specifications for fuel lines were created immediately after the gambit was discovered.

jdsully 8y ago
Yes but the dimensions of a fuel tank are straightforward. The rules for a PFIC are intentionally designed by congress to be byzantine (to protect US investment funds). The two rulesets are following different ethical norms.
paulddraper 8y ago
I still contend that it was impossible for him to “know” the “correct ethical amount”. So a 2in x 11ft fuel line was "too far". But what about a 1in x 6ft fuel line? 0.75in x 3ft? Which of these is not too far? > specifications for fuel lines were created immediately It sounds like everyone recognized there was underspecification and it was remedied. Are you suggesting that was wrong?
baddox 8y ago
I don't think the analogy applies. It is pretty easy for reasonable people to agree that that fuel line loophole is not in the spirit of the rules, since we know that the point of the rule is to ensure each racer has the same amount of fuel. In that case, of course, patching the loophole is trivial: just limit the total amount of fuel that can be stored in the car. The difference with taxes is that there isn't some well-agreed upon precise amount or percentage of money that companies are supposed to pay. The rules are very complicated, even for companies that most people wouldn't consider to be "searching for loopholes." In other words, it may be easy to get a lot of people to agree that Apple should be paying more taxes to the US, but how will they agree on an exact amount?
- ip26 8y ago
  We don't need to know what the right number is exactly to know that $1 is not a good faith estimate of the value of IP licensed from Apple USA to Apple France (for a somewhat hypothetical example). As far as I understand many of the games hinge on tricks like that.
  - baddox 8y ago
    But my point remains. Does anyone expect Apple to just voluntarily contribute more so that fewer people are upset about their so-called loopholes? That just doesn’t make much sense. They could voluntarily contribute 80% of their profits and there would still be complaints from people who think that the correct ethical amount of taxation is more than that.

by ip26 8y ago

jdsully 8y ago

Yes but the dimensions of a fuel tank are straightforward. The rules for a PFIC are intentionally designed by congress to be byzantine (to protect US investment funds). The two rulesets are following different ethical norms.

paulddraper 8y ago

I still contend that it was impossible for him to “know” the “correct ethical amount”. So a 2in x 11ft fuel line was "too far". But what about a 1in x 6ft fuel line? 0.75in x 3ft? Which of these is not too far? > specifications for fuel lines were created immediately It sounds like everyone recognized there was underspecification and it was remedied. Are you suggesting that was wrong?

baddox 8y ago

I don't think the analogy applies. It is pretty easy for reasonable people to agree that that fuel line loophole is not in the spirit of the rules, since we know that the point of the rule is to ensure each racer has the same amount of fuel. In that case, of course, patching the loophole is trivial: just limit the total amount of fuel that can be stored in the car. The difference with taxes is that there isn't some well-agreed upon precise amount or percentage of money that companies are supposed to pay. The rules are very complicated, even for companies that most people wouldn't consider to be "searching for loopholes." In other words, it may be easy to get a lot of people to agree that Apple should be paying more taxes to the US, but how will they agree on an exact amount?

ip26 8y ago
We don't need to know what the right number is exactly to know that $1 is not a good faith estimate of the value of IP licensed from Apple USA to Apple France (for a somewhat hypothetical example). As far as I understand many of the games hinge on tricks like that.
- baddox 8y ago
  But my point remains. Does anyone expect Apple to just voluntarily contribute more so that fewer people are upset about their so-called loopholes? That just doesn’t make much sense. They could voluntarily contribute 80% of their profits and there would still be complaints from people who think that the correct ethical amount of taxation is more than that.