Apple solemnly agrees to pay France $570m in back taxes, turns to camera, gives us a wink

Yep. The real issue with fairness is that these dodges aren't equally usable by all....

You can legally avoid billions of taxes for a thousandth of that - by creating the proper office, with employees, in the low tax district and doing this foolery. Works great if you have the dosh in the first place - the big outfits all do, and all do this. But any small biz can't afford to play that game.

We thus generate anti-progressive taxation via "any country who wants to write laws that allows that", and there's always one who figures some is better than the none they'd probably get otherwise.

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But just to make it more interesting, since we are pretty much all direct or definitely indirect customers of these outfits, taxing them means what? Who pays? We do, of course. Always and forever, not exceptions have ever occured in all history - the corps either charge more, or go out of business, either way it's we who pay. Perhaps the more well-off pay more Apple tax, but most of us pay some of all of it. Do you think other manufacturers or advertisers don't get a boost in what they can charge by being just a little less, or a trivial example of one entity making the entire market more expensive?

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Governments get more taxes, and use it to wastefully redistribute income - not that that is working out well, or standards of living have actually gone up since the 1980's at least. But it'll work this time, it's never been done just right (definition of insanity).

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To inject even a little more fun into the analysis, think of it this way - while people usually are, and should be, equal under the law, we're not the same. Plenty of lower IQ people (as George Carlin mentioned so eloquently), plenty of low motivation folks and so forth. I think of the governments and their various departments as jobs programs for those sorts of people, who gravitate to sinecure jobs that require no thought, just choosing from drop down lists (which never really fit the complexities of reality), and showing up enough to last till a pension; depending on what country, it might even pay more than actually productive work - it certainly does if you count the pension most of us are never offered, or like most pension plans, is going to fail - arithmetic always wins in the end.

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So, think of it this way. Paying some .gov jerk to stamp "no" on whatever they force you to ask permission for (especially including most of it not really being any of their business anyway) is actually costing us less than dealing with the life of (other) crime they'd probably adopt otherwise. As it is, most criminals are stupid - and keep an nearly as stupid police and prison system employed, all easy pickings and mostly leaving we smarter people out of it - which is not the worst possible outcome.

Eg the middle intelligence people would cost us more as criminals than they do as...government occupied criminals.

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You can see why I'd never go anywhere in politics...the truth never sells well....especially if it's obvious in hindsight.

Re: It's not bullshit

You’re right, but the complex shell games around inter-subsidiary pricings have been around forever. I remember 3M France, in 1992 at a conference, getting, very gently, joshed at by _friendly_ businessmen that they deserved congratulations for not making any profits with their (large) French operations.

Im pro free market, against excessive taxation and pro free trade, but multinational companies really shouldn’t be able to game tax rates that blatantly. It’s not healthy in the long run and shenanigans like this is why losers like Trump or Tsipras get elected.

So, yes, close those loopholes.

"But a loophole is a loophole"

Sure, but its actual "interpretation" may change. For example Ireland may have thought it was safe with its deals - until EU started to interpret them as illegal state aids. Had Apple accepted to pay the standard quite low 12.5% company rate, the loophole would have fully worked - greed put it in a situation where it might not.

The devil could be in the details, and if loopholes found by companies were and are in collision course with other laws and regulations.

Evidently it would be far better to close existing loopholes once and for all - although it looks to require a consensus that doesn't exist as some small states take advantage of them too - but other ways can also be used to recover payments for past years while looking for future solutions.

Re: Transactional Tax

The problem is VAT is paid by the customer, not the seller. All the ideas floated around in the past years to increase taxes like VAT would put a bigger burden on customers.

It is true that taxing companies bears the risk that some of those taxes will be passed along to customers in the form of higher prices, but it's not always possible to pass the whole sum - because a company could price its goods out of the market (even Apple is probably pricing itself out of a large share of its own market), or see a sale slump.

Anyway tax policies are a complex issue, and balancing them it's not easy. There's a big evidence anyway that in the past years in most Western countries the tax burden has been shifted heavily towards workers, especially middle-class ones, and it starts to become unbearable especially in periods of crisis. A re balancing is needed, or the protests we're starting to see now will be just the beginning.

Re: Transactional Tax

VAT isn't a transaction tax. It's basically a sales tax with more complex paperwork. VAT and sales tax are paid by the final customer of a product, as stated by someone else.

There's an argument (tax incidence) that most of corporation tax falls on a mixture of a company's shareholders and customers. A company like Apple that mostly has control of its prices can pass tax costs on to customers, one that doesn't really control prices (most food companies say) will have to pass it on to shareholders in lower profits. So in the case of Apple a VAT or a corporation tax would have similar results - at least theoretically...

To be an economics nerd, a transaction tax is something very different. It's usually a very bad idea as it penalises more complicated supply chains - because by nature a transaction tax is charged on all transactions of a certain type. So if you make something complex and are buying and selling loads of small components then you're going to pay transaction taxes on each of those - and that compounds up to meaning the tax is higher than the sales price. Or in reality, nobody makes complex stuff because tax makes it uneconomic. VAT is charged on all the transactions in a supply chain too, but the point is business reclaim that VAT - it's netted off against their VAT bill, so that's why VAT isn't a transaction tax.

Note the EU was talking of having a financial transaction tax, but this was considered a bad idea because it would be very costly for pensions and might destroy the market in eurozone government debts - and thus risked destroying the Euro.

Re: "mes amies"?

Oh, je n’accuserai meme pas l’extreme gauche de la stupidite des ami.e.s ;-)

https://english.stackexchange.com/a/55

notice the bit about the “long history of criticism”. People could still say that, 9 years ago. Now, you’d be hung for daring to voice displeasure at unnatural linguistic contortions to assuage the professionally outraged.