“Apple Inc. Chief Executive Officer Tim Cook is in Paris to meet Emmanuel Macron, amid calls by the French President and European allies to change rules in the region to get technology giants to pay more tax,” Marie Mawad and Helene Fouquet report for Bloomberg.
“Cook and Macron are due to meet on Monday afternoon, according to the French president’s public agenda. Macron is leading a group of countries — including Germany, Italy and Spain — that are seeking a way to plug the European loopholes that allow some companies to minimize taxes by shifting profits to jurisdictions such as Ireland or the Netherlands,” Mawad and Fouquet report. “Macron said last month in Tallinn, Estonia, during a European Union summit, that internet giants don’t contribute to the common good.”
Read more in the full article here.
MacDailyNews Take: Along with overregulation, overtaxing is the surest way to drive business – and all of the ancillary tax revenues that companies and their employees provide – away.
Politicians are bottom dwelling scum that suck the life out of businesses and consumers. When is the last time you ever heard of a politician lowering taxes? I hate them all and wish a POX on them.
Its actually Banks and large business that have more power than Goverments. I think you may want to read up on it. The Banks if 2008 created a Finacial Crash and then asked for bailouts that the tax payer has to pay back. They used this money to pay themselves huge bonuses and no one went to jail for it. Also your aware there is $30 Trillion hidden in offshore bank account in Bermuda, Gurensey, Jersey and the isle of Man which is in tax havens
I’m not sure why all the anti-EU posters on MDN are so opposed to free enterprise. They keep misrepresenting EU tax discussions as “tax grabs,” “money-grubbing,” and worse. Actually, the central EU institutions (the European Commission and European Parliament) have no direct financial interest in national tax rates.
The member states’ contributions are based on the level of overall financial activity in each nation, not on tax collections. To the extent that lower taxes increase financial activity, the EU actually has reason to keep national rates as low as possible. Similarly, no EU member state has any direct financial interest in how high (or low) taxes are in other members.
However, there are nonfinancial interests at play here. Only someone like Marx and his materialist followers could insist that nations and individuals are only motivated by economics. Since the first predecessor organization was founded 66 years ago, the EU has been primarily motivated by the desire to reduce conflict—including armed conflict—within Europe by removing artificial barriers to free enterprise.
The aim is to create a level playing field where competition and innovation can flourish at the entrepreneurial and corporate levels because there is minimal conflict at the national level. A rising tide raises all ships. The EU’s rationale is thus the very opposite of socialism or communism.
From 1951 on, a guiding principle has been that goods, services, information, capital, and people should be free to move around Europe in a single market without barriers at the national borders. Any governmental action that favors one enterprise (whether public or private sector) over another has been prohibited.
The Europeans, like most capitalists, believe that businesses should be allowed to prosper or fail on their own merits without government interference. Business decisions within the European Union should be based on purely business considerations and not on whether one member government is friendlier than another. That isn’t a new idea that only popped up when American tech firms started using Ireland and Luxembourg as tax havens.
We might disagree on the proposed remedy, but let’s at least be accurate about what the remedies are intended to address. The equalization tax is not primarily intended to increase revenues (even if it has that effect), but to provide a disincentive for national tax policies that interfere with the free market in goods, services, information, capital, and people. Companies should be placing their factories and offices anywhere in Europe where it makes business sense, without those decisions being dictated by national tax and regulation policies.
Good factual post.
As a Brit, I would like Apple to pay U.K. taxes on the profits they generate in the U.K.
Presently the taxes on profits in the U.K. do not benefit the folk who fed the pot. That. Is. Wrong.
US entitlement to a share of Apple’s non-US profits is a bizarre money-grab with no justification.
I can imagine the outrage if it were the other round.
If the EU wants to ‘level the field’, they should stay out of it and let free market governments decide whether it is worth it to lower taxes to attract more businesses and compete with other governments in the EU and in the world. Your wordy argument is exactly the opposite of that. They are actually trying to stop competition, so they can preserve higher tax rates.
Pedro,
I’m sorry you found me wordy. If you made it through the first paragraph, though, you saw that the EU doesn’t actually give a flip what tax rates its member countries adopt, because it is no skin off their nose. Ireland or whoever can adopt a tax rate of 0% if they want (and can still somehow fund their treaty obligations). EU countries can compete on general tax rates till the cows come home.
What they cannot do, consistent with their treaty obligations, is to offer direct subsidies or tax benefits to one company that are not generally available to all companies. In particular, they cannot devise schemes under which one member country collects taxes on revenue that a favored company actually earned in another member country. That isn’t competition; it is government intervention to suppress competition. It isn’t “leveling the field” but “putting a hand on the scales.”
It is a pretty weird twist on the term “free enterprise” to suggest that private companies should not be vying with one another in the open marketplace, but should instead be seeking government sponsorship and protection. That replaces business competition with competition between adversarial nation-states. To repeat, that sort of competition in Europe is what brought us two world wars, which the folks who founded the European Movement knew from personal experience.
Never heard such hypocrisy in a single post.
We Europeans signed on to the EU for a single currency to force monetary discipline and efficiencies and to reduce trade impediments among partner nations as much as possible. This has been corrupted and now must be dismantled and a new model put in place.
First of all, as typical, you have become a bloated club bureaucracy and have been allowed to morph into a body that has little accountability and takes on tasks never assigned to it, like forcing member states to take fake refugees who we know for sure – not the slightest doubt – that they are by mostly able young men seeking economic benefits, then using chain migration to bring in hundreds and hundreds of thousands of more economic refugees. You know it and I know it.
What you EU bureaucrats are doing is generational theft from countries where these folks ancestors have lived for hundreds of generations, and your irresponsibility and bleeding heart polices are removing the very people that are necessary to rebuild those countries. You dislocate a culture, a religion, family traditions, food habits … everything, thinking in your own damn vain way that you are going to ‘save’ these folks. Look at what you’ve done already.
Entire nation states what no part of your definition of refugee policy, but your unelected bureaucrats honeycombed in Brussels are little dictators telling Poland, the Czech Republic, Romania, Great Britain and others that THEY HAVE NO SAY IN HOW MANY OF THESE PEOPLE THEY MUST TAKE. Shame on you.
And the Cato Institute had it right in their Economic Bulletin No. 26:
“From a humble free-trade area and a customs union among six Western European countries, the EU has grown into a supranational entity that governs many aspects of the daily lives of 508 million people spread across 28 European countries. While lacking sovereign power, the EU has its own flag, anthem, currency, president (five of them, actually), and a diplomatic service. Today, the EU is trying to grasp new powers, while, paradoxically, it is also facing mounting opposition and a growing probability of collapse.”
You tell us exactly how a cucumber is to be grown, packaged and marketed. You tell Norwegians that they are not permitted to use snuff. Rather than encourage trade, you competition authority says its OK that Alko in Finland, System Bolaget in Sweden, etc. are OK monopolies.
The CAP, for example, has resulted in mountains of butter and lakes of milk. Those were later destroyed or dumped in Third World markets, where they undermined local producers. The CAP, for example, has resulted in mountains of butter and lakes of milk. Those were later destroyed or dumped in Third World markets, where they undermined local producers.
The Structural and Cohesion Funds (SCF), a system of transfer payments that used money from taxpayers in rich countries to try to spur growth and employment in Europe’s underdeveloped south, became a legendary boondoggle of financial misallocation and corruption.
The euro was supposed to have led to increased growth, lower unemployment, and greater competitiveness and prosperity. According to “50 leading economists” who were brought together by the pro-EU Centre for European Reform, “there was a broad consensus that the euro had been a disappointment: the currency union’s economic performance was very poor”.
Britain has wised up and left, and that is YOUR FAULT BUDDY. I suspect others will follow. The head of the EU is a self righteous bully and fool who marinates in his Euro liberalism and utopian globalism that has gone amok.
This is going to change, but it will done the hard way.
what a disgrace Macron is, shameful
Not to mention that 1% of the worlds population has 40% of the total worlds wealth.
And that the top 10 richest people have more wealth than 3 billion people.
So you think coroprations pay there fair share of taxes, your having a laugh
We shouldn’t begrudge the ultra wealthy for their wealth. Taxes weren’t meant to make us all equal.
The problem is when governments don’t provide a reasonable living standard for our poorest.
If Apple would’ve paid the normal corporate tax in Ireland, 12%, there would be no problem. But they got a sweetheart deal and paid only 2%. Actually the Irish government is equally guilty of this tax dodging arrangement. What’s the corporate tax in the US, 39% ?
They pay the “normal” tax rate on income earned in Ireland. Irish sales at a tiny part of Apple’s international sales. It’s the income not earned in Ireland that is taxed as a non-state entity. Ireland got the tax it was entitled to.
KenC,
There is some dispute whether Apple pays the same rate in Ireland on Irish income as other taxpayers. What is not disputed is that the Irish deal makes it possible for Apple to avoid most income taxes in the other European countries where the income actually IS earned. That is not “normal.”
Perhaps it is true that Ireland is getting what it would be entitled to if Apple’s taxes were allocated in proportion to sales, but it is preventing any other country from getting what it would be entitled to on that basis. Hence the EU demand that Apple pay Ireland the taxes it avoided elsewhere in Europe and Ireland’s insistence that it does not deserve or want the money.
Anti-taxers will never become satisfied with the level of taxation no matter how much it’s lowered. They will continue to cry, “My taxes are too high. Bring down my taxes.” Sure, bring taxes down to zero so that there’s more money left for Socialist programs like incentives to corporations, fire departments, and more money to fix public highways that corporate trucks use to deliver corporate products to the corporate distribution centers. And don’t forget windfall less taxes would create for allocations to the Pentagon. Yes, zero taxes.
zero taxes, John.
I am an Independent Progressive but would remind any and all politicians that taxing everything that moves is a sure way to kill innovation, stifle enterprise, encourage tax evasion and enable a large non-productive class of leeches.
There are many kinds of welfare- from what Wisconsin is giving FoxConn, to what Texas gave Toyota to relocate from Hawthorne, to what Amazon is seeking, to the non working Welfare Queen with a bouquet of illegitimate kids living in Section 8 housing and eating on SNAP. Most all of it is unnecessary, is poorly overseen and corrupt to the core.
There should be no corporate taxes on income- period. The dividends paid are taxed, capital gains are taxed, real estate is taxed, etc. At the same time, the depreciation tax deduction should go away as We the People should not subsidize a company investing in their own equipment.
Governments should collect fair taxes in the most efficient method possible, but in the most transparent way possible- not the arcane, byzantine and obtuse system that exists today.
Tax his land, tax his wage,
Tax his bed in which he lays.
Tax his tractor, tax his mule,
Teach him taxes is the rule.
Tax his cow, tax his goat,
Tax his pants, tax his coat.
Tax his ties, tax his shirts,
Tax his work, tax his dirt.
Tax his chew, tax his smoke,
Teach him taxes are no joke.
Tax his car, tax his grass,
Tax the roads he must pass.
Tax his food, tax his drink,
Tax him if he tries to think.
Tax his sodas, tax his beers,
If he cries, tax his tears.
Tax his bills, tax his gas,
Tax his notes, tax his cash.
Tax him good and let him know
That after taxes, he has no dough.
If he hollers, tax him more,
Tax him until he’s good and sore.
Tax his coffin, tax his grave,
Tax the sod in which he lays.
Put these words upon his tomb,
“Taxes drove me to my doom!”
And when he’s gone, we won’t relax,
We’ll still come for inheritance tax.
The taxation of multinational corporations is, as the King of Siam might say, “a puzzlement.” Any reasonable solution would require the nations concerned to work together for a solution that is fair both to the companies and to all the countries involved. Unfortunately, multinational treaties are a bit out of fashion at the moment. I don’t know the answer, but I’m pretty sure that eliminating corporate taxes isn’t it.
Most countries would be willing to drop their corporate tax rate to zero if the corporations were willing to stop using public resources like the police, courts, fire service, roads, water, sewers, hospitals, and so forth. Passing the tax burden through to the shareholders will not work. Taxes paid by an Apple investor in America do not compensate Belfast for putting out fires at the local Apple plant.
Besides that, some corporations (like Apple for many years) reinvest most of their profits in research or growth, do not pay dividends, and have investors who hold the stock for long periods of time. Without a corporate tax, the government would have no regular income to provide services to the corporation.