Business Insider: Apple: You can have taxes or you can have jobs, but you can't have both
Apple's official statement on the EU ruling against its Irish tax arrangements tells you all you need to know about what is at stake: You can have taxes, or you can have jobs, but Apple is in no mood to deliver both.
After learning this morning that the EU expects Apple to pay €13 billion (£11 billion, $14.5 billion) in back taxes, the company said, "it will have a profound and harmful effect on investment and job creation in Europe."
That is not a threat, technically. But it will be seen as one by EU politicians who want to attract new companies to their countries.
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WNU Editor: When I was in Russia two weeks I spent a day at an economic forum discussing what direction should the Russian government take on its economy (this is my idea of a working vacation). I said the same thing .... what is more important for the Russian government .... taxes or jobs. In the case of Moscow .... they choose jobs .... because while times may be tough in Russia .... everyone is at least working. In the case of the EU and Ireland .... Ireland prefers the jobs (and they appear to be well paying jobs), but the EU prefers the taxes because in their minds they know how to create jobs better than companies like Apple, and besides .... in their mind a company like Apple has a lot of cash. My prediction .... Apple will pay the tax, but expect less jobs in Ireland. This also opens an avalanche of other tax cases .... expect more rulings and judgements in the months and years to come against multinationals and state run companies that operate in the EU .... Saudi Arabia's Aramco with its mega billions from its petro-sales comes to mind..
I read about this and was/am thinking the "the EU really does want to commit suicide or they really are that stupid." It's most likely they really are that stupid, as few actually would want to commit suicide.
ReplyDeleteAs a result of this, expect momentum to break away from the EU to increase. Some countries are actually serious about growing their economies, providing for infrastructure, healthcare, and their national defense. As such, more jobs = more tax revenue as more people are working and paying taxes. Higher taxes = less jobs which equals less tax revenue as fewer people are working and paying in.
I agree with your assessment that Apple will pay the tax, however, I would expect the case to drag on for a few years and ultimately a settlement will be reached.
As a business person and a person who works closely with other business people representing before various government entities and helping them navigate the myriad of regulations imposed by these entities, I fully empathize with and fully appreciate the sentiment of not wanting to pay these governments and their agencies ANY tax revenue and when legally possible I will work to do this, however, no tax paid in is generally not realistic for a profitable enterprise and like it or not the government must provide certain services and money is needed.
As such, a compelling case could be made that the 1% Apple was paying in tax is not enough and should be more, however, 14.5 billion is WAY to much. Expect a settlement to be reached whereby the EU gets the bulk of what it wants in the short term BUT this is going to cost jobs for EU countries, economic growth, and will result in less net taxes received over the mid to long term and perhaps worse it is going to leave a VERY BAD taste in the case of Apple as they will remember being extorted by the EU and more companies will be reluctant to do business in EU nations.
If EU leaders were intelligent and humble, this would be a great time for circumspection and they might ask themselves how can we attract great companies like Apple. Unfortunately these leaders are none of these. As such, expect a doubling or even tripling down on bad polices.
In short, BREXIT is only the beginning of the end for the EU. I'd expect leaders of individual countries who are closer to the citizens of those nations and therefore more responsive to them to come to their senses and change policies including tax policies to policies that are more sensible. Goodbye EU and good riddance!!
Are you insane WMU? How can you prefer jobs vs Tax when Apple is paying 0.005% of Taxes!? And the others companies in Ireland that pay much higher taxes, is this fair?
ReplyDeleteIf Apple were paying higher fees than you are right, jobs is the number 1 priority. But in this case we cant allow a company to PAY 0.005% of TAXES. THIS SHOULD BE A CRIME
Tax or jobs?
ReplyDeleteThis is the the typical and squalid blackmail of capitalism on governments.
If a serious government want to be free from those blackmails, force them to pay the taxes.
A wise politics may transform them into new good jobs.
In the '80 the province of Modena is well know and filled of textile enterprises. When recession and outsource/market policies hit that sector in favor of China, local authorities change great part of the focus on biomedical sector. Now we have the second district of industries of that type. In the world. And is not the only type.
Say no to those blackmailers pigs, a state must be a state for everyone, and so the taxes.
And the major part of the taxes come from workers and pensions. THIS is why tax evasion, especially by giants like Apple, is intolerable.
Healthcare, good services, high education, diffuse culture, modern infrastructures, social security. All that serve for a good state, and serve also to enterprises. Much more than low tax.
Unless your goal is not modernity, but salary wars among states.
Sure, we know, like Marx say, that the states are the face of the dominant class, but a democratic one must pose a limit to these exact from private business, privates that are NOT democratic.
And neither they care of the future of the people.
A wise government must care.