Putting aside the issues of sovereignty, is this policy of prohibiting favorable tax breaks to attract jobs a good policy?
I have long said that tax competition between countries is a race to the bottom while tax competition between states was cannibalism.
I think we shold prohibit taxpayer specific tax deals tax are mostly used to attract jobs from one state to another state.
Well, we have to do something at international level - multi-nationals are leading us around in circles and ending up paying 1% corporation tax.
For me it’s a matter of how we play catch up - this is robbing the people of basic services.
FFS, Apple had a European HQ office with no address.
Do tax policies actually create jobs? Or do they just move them from one place to another?
Why wouldn’t a difference in cost or regulatory burden have an impact on job creation?
(post shortened, underline added)
Who is this “we” you are referring to? All UN member states? 1st world countries? Sovereign nations? All 50 states and Puerto Rico? Only northern hemisphere countries?
The Irish government had yet another chance to bring good paying jobs to Ireland and they took it. But the EU’s Margrethe Vestager, the European Commission’s “competition commissioner” objects to how a sovereign nation handles it taxation and jobs. Little wonder that BREXIT was successful.
AFAIK, Vestager isn’t going to provide jobs or taxes to Ireland.
Well, not really. The problem with being a tax haven-ish economy is that a lot of companies are just using a postal code, neither creating jobs nor paying a lot of money.
Are EU members sovereign? Not in respect to trade deals. Sort of the point, really. The Republic of Ireland could of course do an… “Irexit”, but honestly, the Celtic Tiger exists because they are a gateway to a 300+ million market. It’s not like companies would be that interested if they were only a 4’5 million internal market by themselves. Certainly Apple wouldn’t bother.
Good news for Ireland is that in a couple of years they will be the only English-Speaking country in the EU. And excepting ridiculous excesses like this 0’005% tax Apple paid in 2014, the Comission will still have a fairly laissez faire approach to Irelands commitment to low taxation.
Thanks for the insider viewpoint.
According to the previously posted article -
In the 25 years since, Apple has created thousands of jobs in Ireland. By 2015 it had 5,000 employees in the country. Another 1,000 jobs are planned for the headquarters in the Irish city of Cork. This year Apple will open its site near the town of Athenry, with another 200 jobs in the making.
Apple is investing in Ireland. Could they do more? Probably. Should Apple find another country to invest in? Maybe.
Being generally suspicious of commissioners, I wonder if the EU commissioner has another company in mind to replace Apple? Maybe from a European country? Or a company owned by her close/distant relative? Or might be willing to OK a deal with Apple and her own country?
Sure. Maybe it’s a conspiracy by evil forces. Maybe it’s someone doing their actual job description.
Ireland is, by the way, an European country. Maybe you mean a continental one, but really, there’s no more love between continental states than between any continental state and Ireland.
Apple is not going anywhere. With or without this ruling they still have the lowest taxes in the EU, only in par with Estonia. And Apple still require EU headquarters.
I would start with the 50 states and territories. Then I would make it part of every tax treaty. Then I would make it part of the WTO, NATO, every trade deal and organization that we belonged to. Hopefully we can eventually get the whole world.
Bring from where? Bring at what cost? Its a race to the bottom.
Because it is anti-competitive. It is a state subsidy when you make a tax deal with a single tax payer to get them to relocate to your jurisdiction.
Ireland wouldn’t have those Apple jobs if Ireland wasn’t part of the EU.
Because its a tax break for ONE taxpayer. It was intended to lure headquarters jobs to Ireland. It is just giving Apple a competitive advantage over other similar companies, does that create jobs or just move them from one company to another?
So what benefit does Ireland get, except the salaries etc. from X thousand jobs? What does the rest of the world in which Apple does business get? And what does Apple get?
Deals like this, going back to DeLorean, seem to be short-term, ephemeral benefit for Ireland, whopping benefit to the international, and a screw job to absolutely everyone else.
Imposing retroactive tax obligations to the order of $15 billion?
Sets a (very) bad precedent.
Right, like they broke the law 10 years ago and you shouldn’t make them pay for the 10 years - we’ll just call them naughty boys and start from now?
I do love it when companies held in special snowflake regard turn out to be just as conniving and greedy as those already despised for it. Disney, Apple, Starbucks…
In effect, the Irish government gave £11 billion of Irish citizens money to Apple shareholders, and in the process enabled Apple to have a competitive advantage over other companies.
Seems to me that other companies have a right to feel aggrieved at that.
The EU did not set Irish tax rates, and Ireland is free to apply whatever tax rates it desires, the same as all EU nations. What it does not agree with is that tax rates were set preferentially for one company.
Ireland has a history of this, I think we might find google doing exactly the same - here has been something of a scandal over the fact that google carries out a great deal of business right across Europe, but when the actual payment transaction is made, the purchaser is transferred to account handlers in Ireland.
Apple is held in special regard?!?!?!?
They are the worst. They are the Kanye West of international corporations. They get away with some real bullshit because they are good at what they do.
I see it as two issues. Special tax carve outs for certain businesses is a bad idea because it is a form of corruption. Government should treat everyone equally.
On the other hand a race to the bottom for taxes would be a good thing. Taxes are the price you pay for government services. It is good for consumers and customers when businesses engage in races to the bottom for prices. That is why standards of living are higher now than at any point in human history. If the Irish government can provide government services for less than other governments it is good for its citizens because that leaves more money left over for other uses. If that efficiency causes other country’s governments to compete by lowering the cost of their services that is even better.
What single governing body has the authority to set state tax rates for all 50 states? Without a single governing body, how would you encourage all 50 states to relinguish their soverign right to set their own tax rates? What basic, world-wide, tax rate do you consider appropriate? 1%, 5%, 10%?
What single governing body has the authority to set tax rates around the world? The UN?
Wisconsin offers Illinois companies a tax break to move from Illinois to Wisconsin. That’s a competitive advantage for Wisconsin and for the companies which take advantage of the situation. Illinois doesn’t like it but Illinois can offer tax breaks to keep companies in Illinois. Either way, all taxes paid by companies in Illinois and Wisconsin are passed on to the consumers. Consumers pay the taxes of the companies and they pay more taxes for purchasing the products these companies make.
Ireland offered Apple a tax break to move some of it’s operation to Ireland. Apple could have moved this operation to Michigan. Michigan certainly needs the jobs. But Apple needed an EU presence and Ireland made the best offer.
But wait, there’s more.
The EU doesn’t like the deal. After the fact, they declare that Ireland didn’t charge enough, and Apple should pay more. I guess that’s the price of belonging to the EU.
The British voters seem to have many reasons for their decision to leave the EU. It appears that a majority of voters do not like how the EU runs/influences/regulates British companies, or tells British voters how to live.
If Apple choses to leave Ireland, and it is their choice to do so, maybe Ireland should leave the EU, also???
(post shortened)
“In effect”? The Irish government did NOT have this £11 billion. The Irish citizens did NOT have this £11 billion. Apple was capable of making £11 billion plus and the Irish government, as well as thousands of Irish workers, wanted a piece of the Apple pie.
A deal was made to bring Apple to Ireland. Except a deal wasn’t made. Not according to some EU commission. Maybe companies who wish to bring business to EU members should skip negotiating with individual sovereign governments and deal directly with their EU over-bosses?
There was pre-existing law. Would have been an idea to take note of it - it being the law. Somewhat better than riding roughshod over the law as US tech corporations seem to have a habit of doing.