Apple truly needs to get out of China, the amount of virtue signalling they do comes up sour considering their current manufacturing being heavily based in China. Look, I am all for corporations playing the good guy and standing up for what is right but you don't get a Get Out of Jail Free card with just a message, actions speak louder.
This could be more along the lines of alarmist chatter but should the US get a new President China's best opportunity to act on some of its threats to Hong Kong and Taiwan is after February 2021. Guarantee they took the lesson to heart about how Crimea and Ukraine were handled with effectively little more than hash tag diplomacy.
I don’t think the dependence for manufacturing is sufficient to explain all the pressure Apple faces in China. Even if they were to move all manufacturing (not just final assembly) out of China they would still want to sell iPhones to the Chinese.
The cynic in me would suppose that the move is merely in case there is a backlash against anything “made in China” by western consumers/governments, but maybe Apple really are trying to reduce dependence on China or just cut costs.
In China I expect Apple to be just as craven as ever.
Apple USA and Apple China are, in a sense, different companies, even if they're owned by the same shareholders. If they're manufacturing for the USA market in China, it gives China leverage over Apple USA and not just Apple China.
Apple pays taxes in every country it does business in. The remaining profits it keeps in Ireland because of the low tax rate, otherwise if returned to the US it would be taxed again.
US international corporate taxation works like this if you repatriate profits to dividend to shareholders:
1) First pay taxes on profits in each country the profits were made.
2) Out of the remainder pay state corporate income tax in the US state you are headquartered in.
3) out of remainder pay federal corporate income tax.
4) out of remainder shareholder pays state income tax.
5) out of remainder shareholder pays federal dividend tax.
Typically the shareholder is able to keep about 30-40% of their share of the original profits after they go through the five layers of taxation.
Well yes, the problem is people seems to think it should be "revenue" taxed and not profits "taxed". ( Dont ask why, but that is the general sentiment )
And you can see they are very vocal about it, If they are sold in X, they should be taxed in X.
The problem with current Profits based system is that it allows Apple X to paid Apple Ireland 99% of your profits as IPR, Brand / Logo usage ( Apple France paying to Apple Ireland ). Effectively leaving only 1% of the profits being taxed in X.
And there is no way to determine the proper value of those IPR. Apple spends tens of billions every year on R&D and Marketing. So not paying for those IPR would be wrong, but also paying no tax in countries is also wrong.
And no one so far has a reasonable solution to fix the current profit transfer problem. And it is a much harder problem with Globalisation.
Yes, profit transfer is a problem, but it’s not nearly as big a problem as you make it out. Companies can’t just make it up on their own, there are accounting rules they must follow.
Secondly, there is a simple and much better solution that would boost everyone’s economies. Stop taxing investment and savings, tax consumption instead.
In the US it would be as simple as taxing capital gains and dividends at higher ordinary income rates, while no longer taxing corporate income at all. That would increase capital for building new businesses, while restoring progressivity to the tax code.
VAT is taxing the difference between the procurement price and the sales price (thus its name Value-Added Tax), not the revenue.
E.g., if Apple Finland procures the phone from Apple Inter Co., two separate entities, for USD 499 and sells it for USD 500, the tax would be on the USD 1, i.e., 20 cents, since Apple Finland would get the VAT paid to Apple Inter Co offset by the Finnish tax authorities.
While true in a sense, that's not the best way of looking at it.
VAT is charged on the sale price of every intermediary, however businesses can claim back VAT on their purchases. In your example, Apple Inter Co. would sell the iPhone to Apple Finland for $499 + $119.76 (VAT in Finland is 24%). Apple Finland would pay $618.76, claim back $119.76, and sell the phone for $500 + $120 to the consumer, charging the consumer $620 and giving $120 to the government.
So yes, Apple Finland will have given effectively about 20 cents to the government, but the total $120 of VAT will still be paid and calculated on the end sale price, not the profit margin.
> Apple is not paying VAT, the consumer are paying for it.
This has nothing to do with what kind of tax it is.
If the company lacks competition then the price they can charge is the total value of the product to the customer. In that case any kind of tax is going to get paid by the company, because the customer won't pay any more than they already do or it's not worth buying the product anymore.
If the company is in a competitive market then they have thin margins and any tax is going to be paid by the customer because the company has no choice but to pass it on or go out of business.
If the company has some competition but not very rigorous (i.e. like Apple) then some of the tax is paid by the company and some by the customer, but it still doesn't matter what kind of tax it is.
> VAT is VAT, it is different. Apple needs to paid revenue tax.
This is just inaccurate. VAT and "revenue tax" are effectively equivalent. They may differ in some implementation details but not in anything fundamental.
> VAT and "revenue tax" are effectively equivalent.
I mean VAT is a type of revenue tax, sure. However it is rather uniform and generally it's rate is not affected, e.g. by the total revenue of a business, the type of business, and other such qualities.
It's very easy to just shift the burden to the customer, not only due to the above but also because there's general understanding in the population (which visibly see the government set that tax uniformly on all their receipts).
But there's typically also additional taxation on corporate income. Isn't that essentially the "revenue tax" people meant?
> However it is rather uniform and generally it's rate is not affected, e.g. by the total revenue of a business, the type of business, and other such qualities.
Neither are most corporate income taxes. Otherwise the company would use many small corporations instead of one larger one (which they already do to varying extents for other reasons) and avoid the higher rates.
And, of course, the type of business can easily be taken into account with VAT if you like that sort of thing.
> It's very easy to just shift the burden to the customer
It's not any easier or harder than anything other way. Again, if they had thin margins, they have no choice but to raise prices or go out of business, so they raise prices and the customer pays. If they have higher margins they may (or may not) eat some of the tax because the reduction in demand from raising prices might cost them more than paying the tax would. That's the primary consideration in practice, not what you call the tax or whether the customer sees it on their bill.
In some cases the customer may end up paying more than the amount of the tax because the business has to pass on the tax, which reduces demand, which lowers the sales volume they have to amortized fixed costs over, which requires them to raise prices even more.
Though whether the customer sees it on their bill certainly affects the politics of it, because then they notice that they could be the one paying it, even though that was true either way.
> But there's typically also additional taxation on corporate income. Isn't that essentially the "revenue tax" people meant?
It is, the problem with "income" is that it doesn't have a jurisdiction. If you make sales, the customers are somewhere. If you hire employees, the employees are somewhere. If you own property, the property is somewhere. If you make "profit" it's just numbers in a bank's computer, which can be anywhere, so it goes wherever the taxes are lowest without regard to where anything tangible is.
So if you don't want that to happen you have to tax the thing that actually happens in your jurisdiction, and we're back to VAT or payroll tax or whatever.
And it's a bit worse than that even because of inflation. You buy some shares of Verizon for $21.11 in 1990, you sell them for $56.85 today, they claim you have a taxable gain of $35.74. But 20.62 of that was just inflation, so the rate you're paying on the last bit is really ~47% rather than 20%.
Not sure why you're getting downvoted. It's true that it doesn't make it any less immoral, but at the end of the day companies will seek to lower their costs, after all it is their mission, hence this (major) problem is political and shouldn't depend on corporations good will.
Paying the minimum in tax allowed by law to reserve the maximum amount of money possible for pursuing your own social or charitable goals is not immoral.
The government is not a charity (indeed, Apple HQ’s government uses some fraction of their tax revenues to conduct mass murder) and to argue that anyone is immoral for not paying more tax than is specified by the law is an argument against the rule of law in society.
If you don’t like the laws, take it up with your lawmakers, or with the concept of representative government or democracy in general, NOT those who explicitly comply with the law, and indeed spend millions on staff (and their payroll taxes) to ensure that they do.
It outprortionally transfers the cost of doing business to normal taxpayers, even those not interacting with said companies. It swoops local money and hides it in coffers of unrelated countries. I don't blame them for doing it, I blame it on global politics (it will probably require a global response), but it doesn't make it any more moral or damageless, tho I guess it's somewhat subjective.
> It swoops local money and hides it in coffers of unrelated countries.
It absolutely does not. Tax revenues (“local money”) are based on the law and the law alone.
It’s simply not “local money” if the law does not describe it belonging to that local jurisdiction. The concept of ownership and rights to money are legal ones, and the cash flows are flowing according to the law.
You may argue that it goes against the spirit of the idea of tax, but that is simply not documented anywhere and thus could not be complied with precisely even if someone wanted to.
Don’t criticize people for obeying the law as written, and certainly don’t criticize them for not voluntarily donating to organizations that like to use their resources to run torture camps and bomb children.
I don't understand why you are adopting this tone, read my message again as you seem to be misinterpreting it. I explicitly mentioned that I am blaming the laws themselves and not the corporations for abiding by them, it is the entire point and premise of the few comments I left on this thread. These laws are at fault for allowing corporations to make money in country X and pays tax for it in country Y, to defend this form of taxation seems boneheaded to me.
Governments have to close this loophole. A CEO is going to be quickly ousted if they suggest not taking advantage of the well known tactic. For one it means less money in the pockets of shareholders but also reduces the ability to compete if all other companies are paying little to no tax. Until governments step in, nothing will change.
That's true in the US where corruption is legal, in most other developed nations it is severely limited or forbidden, making it much less rampant and outproportioned. Here in Canada (and I assume many similarly developed countries), stories of corporate donations to political parties are often big enough scandals to make the party lose thereafter. Citizens United v. FEC has to be one of the grossest judicial change a developed country could adopt. I doubt political donation regulations are this loose even in tax havens. It didn't birth the US era of crony politics, but it sure does contribute to cement it. It's up to the people now to tackle these issues.
Wikipedia:
>The Court held that the free speech clause of the First Amendment prohibits the government from restricting independent expenditures for political communications by corporations, including nonprofit corporations, labor unions, and other associations.
Citizens United is also a threat to national security as it opens the floodgates for foreign money to directly influence American politics to an almost unlimited degree.
It may take a constitutional amendment to fix it though.
I think it says more about corporation taxes being unfit for purpose than immorality. They clearly don't work with international companies, so it would be better to charge consumption taxes on their products.
With IP monpolized and enforced by the neo-colonial global North corporatocracy or empire, thanks to TRIPS [1]
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"Meanwhile, the educational, information and intellectual commons have been plundered more than at any time in history. Thomas Jefferson, a founding father of the US Constitution, correctly said, ‘Ideas, in nature, cannot be made the subject of property.’ Sadly, that is precisely what has been done in the neo-liberal era.
A globalised intellectual property rights system was immensely strengthened by TRIPS (Trade-Related Aspects of Intellectual Property Rights) passed through the World Trade Organisation in 1994, shaped by a few US multinationals, backed by the US and UK governments. This has facilitated the commercialisation, privatisation and colonisation of ideas. Since 1994, the annual filing of patents has more than tripled, with the global stock of patents close to 12 million, each giving monopolistic control of some idea for 20 years or more.
Many patents result from publicly-funded research, diminishing the risk. But TRIPS allows corporations to receive monopolistic income for two decades, or use the patent to block others from producing something. Those claiming to believe in free markets should have opposed the trend, but reveal their class-based ideology by keeping quiet. There is evidence that the patent system hinders economic growth and innovation. It merely increases inequality and rentier capitalism."
Every (or almost every?) industrialized nation already had a patent system. The TRIPS agreement just standardized some aspects of those disparate systems across countries.
"Of all the forms of artificial property and legal privilege in existence, the one most indispensable to corporate power in today's economy is probably "intellectual property.
A large portion of the price of most goods and services consists of embedded rents on “intellectual property.” Tom Peters, in The Tom Peters Seminar, argued that the cost of materials probably accounted for some $60 of the total price of his new Minolta camera, and that he paid “the rest, about $640, for its intellect....” He went on to celebrate the portion of economic value made up of “intellect” and “imagination.”33 Whether Peters' estimate is typical for the portion of the price of manufactured goods made up of rents on IP is doubtful. But in an economy with no property rights in software and product design, with competition unrestricted by "intellectual property" claims of any kind, whatever portion of a product's price was made up of rent on the ownership of designs or ideas—as opposed to labor and materials—would evaporate overnight.
IP is a major legal support to oligopoly, since so many cartels were stabilized by the exchange or pooling of patents between the major players in various industries (e.g. G.E. And Westinghouse in home appliances, the Bell Patent Association as the basis for AT&T, RCA as a patent pooling arrangement for the major radio producers, etc.).
If IP were abolished, there would be no legal barrier against many small companies producing competing modular components or accessories for the same platform, or even big companies producing modular components designed for interoperability with other companies products. That means that IP is an important legal bulwark not only for planned obsolescence, but also for a business model based on selling cheap platforms and then charging an enormous markup to a captive market for accessories. If you've ever remarked on how expensive toner cartridges or glucometer testing strips are, you can thank “intellectual property” for it.
It's odd that the so-called “Free Trade Agreements” promoted by so many professed “free traders” focus so disproportionately on provisions for stricter enforcement of patents and copyrights. IP plays exactly the same protectionist role for global corporations that tariffs did for the old national industrial economies. Patents and copyrights are barriers, not to the movement of physical goods, but to the diffusion of technique and technology. The one, as much as the other, constitutes a monopoly of productive capability. “Intellectual property” enables the transnational corporation to benefit from the moral equivalent of tariff barriers, regardless of where it is situated. In so doing, it breaks the old link between geography and protectionism. With an American tariff on a particular kind of good, the corporations producing that good have a monopoly on it only within the American market. With the “tariff” provided by a patent on the industrial technique for producing that good, the same corporations have an identical monopoly in every single country in the world that adheres to the international patent regime. “Intellectual property,” just as much as the tariff, is a form of protectionism in that it restricts the right to produce a given good for a particular market area to a privileged class of firms."
Your argument that patent systems already existed does nothing to critique the systems, or the dynamics of the systems, themselves. Instead of accepting things on face value or because an authority has made a claim, I am trying instead to find out the story of how it came to be.
I am not arguing that we should not have any system at all. I strongly disagree however that the existing systems are as harmless as you make them out to be. When you say it "just standardized some aspects" it brushes under the rug any nuance of the underlying mechanics of these systems.
No matter what the topic is, if you focus only on the negatives and pretend the positives don't exist, it's gonna sound bad. Reasonable people can argue about whether the negatives outweigh the positives, but reasonable people don't pretend that that there just aren't any positives.
Critiquing something is not denying positives. Please point out where I said that? That is not my intention. I would say that critiquing without providing an alternative is about sharing grief [1], than it is about discussing, planning and creating alternatives. I think you've given me the opportunity to reflect on my approach and message.
I am for systemic evolution and integration: technology shapes us, and we shape technology, it's a spiral.
Promoting intellectual property rights while at the same time talking about 'free markets' is one of the most harmful and backward Doublespeak going on in today's system I think.
The systemic components and dynamics that are part of the intellectual property systems are ripe for evolution. I believe we are living with a pre-21st century systemic reality that doesn't account for the new opportunities available to us due to digital technology.
The reality is that there is a world out there with people who are suffering at the bottom of the corporate pyramids (the Precariat, e.g. gig workers - who have no job security, no benefits, and not many prospects of a peaceful retirement). Then there are also the hundreds of millions suffering in so called 'developing' countries whose resources are plundered and whose governments compete for industrial-production contracts with our corporatocracy [2][3], creating continuous race-to-the-bottom dynamics that squash workers' rights and create environmental catastrophes.
Commons-based peer production integrates our new digital technology abilities, and it has to be our future. Firm/corporate production is wasteful and destructive. Imagine if all phones and gadgets were modular, including the software inside. Instead our gadgets today become slow non-backwards compatible bricks because of perceived obsolescence. I can do without Siri, or the gaming capabilities of the latest flagship phone... or multitasking, or whatever other corporate feature I do not have a choice whether to run or not.
Because of the monopoly created by the idea of exclusive intellectual property (and the systems constructed to support it), many of these useful ideas and technologies lie locked up inside corporate databases, unexplored and unused. What a waste. What a cosmic joke and tyranny.
My belief is that by using technologies like Ceptr and MetaCurrency's Holochain, we can be in a large scale transition to Commons-based peer production, where we might be able to reverse climate change in just a few years.
The technologies that can save us are here today, yet the intellectual property regime keeps them artificially scarce.
The big constraint underneath all of this, though, is our dogmatic ideas around wealth and money:
1. The current political economy is based on a false idea of material abundance. We call it pseudo-abundance. It is based on a commitment to permanent growth, the infinite accumulation of capital and debt-driven dynamics through compound interest. This is unsustainable, of course, because infinite growth is logically and physically impossible in any physically constrained, finite system.
2. The current political economy is based on a false idea of “immaterial scarcity.” It believes that an exaggerated set of intellectual property monopolies—for copyrights, trademarks and patents—should restrain the sharing of scientific, social and economic innovations. Hence the system discourages human cooperation, excludes many people from benefiting from innovation and slows the collective learning of humanity. In an age of grave global challenges, the political economy keeps many practical alternatives sequestered behind private firewalls or unfunded if they cannot generate adequate profits.
So my hope is that I can continue dreaming and imagining a world where humans have a non-violent and harmonious relationship with the Great Mother, where we’ve moved to a closed loop resource economy, where all outputs can become new inputs, where nothing is wasted. A world where everything is modular and where the scarcity of our intellectual property systems have become inverted and lead to a rich Copyleft world instead, where intelligence is pushed to the edges.
