Reply to post: Re: Jealousy

Europe to order Apple to cough up 'one beeellion Euros in back taxes'

bazza Silver badge

Re: Jealousy

Irked indeed, but there's not a lot that Uncle Sam can do about it unless Apple actually repatriates the cash to the US where it will attract an unappealing 40% tax rate. Same with Google, Amazon, Microsoft, Starbucks, and all the other large US owned multinationals that don't want to pay US tax rates on their profits.

With Apple if they repatriated the lot to the US, Uncle Sam would be in line for a most welcome $80billion (or thereabouts). I've no idea how much would be raised if Google repatriated all their profits, or Amazon. Anyway, it's a significant pile of cash, a not inconsiderable number of $100s for each man, woman and child in the US.

Other companies are going to have to start wondering what might happen now that the EU seems to have got their teeth into a theme. Vodafone famously did a deal with UK tax authorities which, arguably, would also count as illegal state aid.

We do have to be careful that this doesn't get out of hand; countries around the world compete on tax rates, and the UK has done very well by being slightly more competitive than the rest of Europe. If the EU suddenly starts overturning favourable tax deals between large multinationals and the UK government then that'd significantly reduce the competitiveness of the UK, and also Europe as a whole.

Not that the EU seems to have a problem with reducing the competitiveness of the European economy. In fact in seems hell bent on making it as uncompetitive as possible. The US too will have to realise that its corporate tax rates are deeply uncompetitive and that cannot be sustained in the long run. The problem for the US is that if the corporate tax rate is reduced, personal taxation will have to be increased to make up for that, and there's many a wealthy political donor well placed to ensure that no politician will ever get elected with that kind of thought at heart.

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