Ireland Tax Haven for American Corporations


[Howth and Ireland's Eye. County Dublin, Irela...
[Howth and Ireland’s Eye. County Dublin, Ireland] (LOC) (Photo credit: The Library of Congress)

Ireland Tax Haven for American Corporations

Is it ethical to have a company in the U.S. base a subsidiary in a nation like Ireland to avoid paying taxes here? The company being discussed here is Apple. Do you suppose since they used this tax haven to pay an effective two percent tax on their profits, that perhaps they are not acting responsibly in regard to their duties? Are the roads, bridges and communications systems the company uses free or do they cost tax money? Are educated workers free or do schools have to be financed to educate them? Does the fire department, the police and the military defend Apple and all of its possessions on a charity basis?

It must enhance the profits of a company immensely to sit inside a highly developed nation with elaborate communication hubs, educational systems and complex legal protections and pay virtually nothing for any of it.

Well, if they don’t then who does? I’m sure you can make a guess, my average reader is probably paying a far higher proportion of their income in taxes than the two percent Apple wound up with.

Is that fair? Is it ethical to shirk your responsibilities to your country?

I’ve heard it said that all taxation is a form of theft. That’s an interesting theory. It conveys a certain sense of righteousness in not paying taxes because, after all, you are preventing a robbery. However, I am a great reader of history and i am unable to discover any successful civilization that did not use shared burdens to develop and maintain their nation.

James Pilant

Ireland To End ‘Stateless’ Tax Avoidance Gimmick, Leave Others Untouched

http://thinkprogress.org/economy/2013/10/16/2791501/ireland-corporate-tax-change/

The scheme Noonan wishes to stop became famous this spring when a Senate investigation found that Apple had paid nearly zero taxes on around $100 billion in sales revenue. Apple’s arrangement, which even critics say is a completely legal exploitation of a poorly designed global tax system, relied upon three subsidiaries incorporated in Ireland but not “resident” there for tax purposes. Noonan said Tuesday that his budget proposal would “ensure that Irish-registered companies cannot be ‘stateless’ in terms of their place of tax residency,” adding that “we don’t want to incur any reputational damage.”

While Noonan’s move would end this particular form of tax evasion, a more common form that uses shell companies registered in Ireland will go untouched. A company can still register in Ireland but avoid paying its 12.5 percent corporate tax rate by declaring tax residence in some other country with lower corporate rates, Bloomberg reports. While Apple-style tax statelessness is relatively rare, Irish subsidiaries registering to pay taxes in Bermuda, Luxembourg, and other tax haven countries is not. Google, Yahoo!, LinkedIn, eBay, and Microsoft all use such schemes to avoid taxes by moving global revenues from points of sale to Ireland, and then from Ireland to another tax haven. Ireland’s proposal is therefore “a very small step” and “relevant only to Apple,” former Joint Committee on Taxation chief of staff Edward Kleinbard told Reuters.

From around the web.

From the web site, Venture Beat.

http://venturebeat.com/2013/05/22/ireland-were-no-tax-haven-but-yes-apple-did-pay-2-tax/

This is a stumper.

The head of the Irish agency designed to promote foreign investment in the country strongly denied that Ireland is a tax haven. But when questioned by Ireland’s RTE News, he could not deny that Apple has paid an effective tax rate of just two percent, much as Senator Carl Levin (D-MI) said yesterday in hearings on Capitol Hill.

Which, frankly, sounds pretty tax haven-ish.

“There is global competition, and tax happens to be one of the areas [where] Ireland competes for global investment,” IDA Ireland Chief Executive Barry O’Leary told RTE this morning.

That also sounds suspiciously like a tax haven. That’s what Senator Levin believes, as well.

“You are able to shift profits to places where you, an American company, don’t pay taxes,” Levin said yesterday to Apple CEO Tim Cook. “That is not right … that a company could shift its value to a tax haven, which is what Ireland is.”

Read more at http://venturebeat.com/2013/05/22/ireland-were-no-tax-haven-but-yes-apple-did-pay-2-tax/#gXo2Y2xGqeHZji3x.99

Income Inequality and Hubris


Income Inequality and Hubris

What They Really Think About Us | homophilosophicus

Surviving the post-apocalyptic landscape that Ireland has become in the wake of the Celtic Tiger is difficult enough for most people. The economic downturn and the past number of lean years and a governmental programme of austerity have exposed the serious divisions in Irish society. The years of plenty have spawned no small number of Tiger Cubs who feel no shame in flaunting their wealth and privilege in the faces of those who have been most affected by recession and hard times. As economic depression speeds the transfer of wealth from the working poor to the idle wealthy the mood of triumphalism in Ireland’s bourgeoisie reaches fever pitch. All the while the class war moves on from one middle class offensive to another: cheap ‘reality’ television shows depicting the fecklessness of the working classes, the publication of one ‘rich list’ after another, and the continual and propagandistic highlighting of social welfare fraud in the lowest economic brackets of Irish society. At no time since the Great Famine has the inequalities in this society been as acutely felt as they have these past few years. The poor have been despoiled of any platform from which to defend themselves as the attacks against them become ever more comprehensive and savage. Yet right in the heart of this darkness a red rag is waved before the bull. A young and wealthy woman was caught on video ranting and raving about the ‘losers’ who worked for minimum wage, and how she was ‘too rich’ for them.

What They Really Think About Us | homophilosophicus

Hubris is pride on a cosmic scale, and that is what we have here. I’ve heard this kind of thing myself. And, of course, here in the United States, we can see Honey Boo Boo on television, an American we can only understand through subtitles, a savage caricature of lower class Americans, who apparently doesn’t even realize she is being made sport of. I have heard those well off say the most amazing things about the unemployed, the poor and the homeless. They never seem to find it in their hearts to consider them fellow Americans but merely find them wanting in every regard.

But there is a just God, and there will be a reckoning in this world or the next.

James Pilant

From around the web –

From the web site, Inequalities:

On one level, the question of whether benefit cuts lead to higher income inequality is simple to answer.  Poorer people are more likely to claim benefits, ergo cutting benefits has less effect on people with high incomes – and from the 2010 Emergency Budget to the 2012 Budget, there were £19bn of net cuts due by 2014-15.[1]  Prof John Hills, the former chair of the National Equality Panel, calculates that £1000 of deficit reduction spread equally over all benefits and services will cut incomes of the poorest fifth by 12%, but less than 1% for the richest fifth.[2] In contrast, deficit reduction through equal rises across all taxes has roughly the same effect (a 3.5% reduction) on all.

However, the answer becomes more complex when we see the different ways that deficit reduction can be enacted.  Both benefit cuts and tax rises can be particularly targeted on the poor or rich; the Coalition can point to greater means-testing of Child Benefit as a benefits cut that is not targeting poorer people.  (This ignores the long-term political impacts of cutting universal benefits, (Baumberg, 2012)).  David Cameron has therefore argued (back in March 2009) that “fiscal responsibility needs a social conscience, or it is not responsible at all.”

our problem your problemFrom the web site, Dinmerican:

One can begin to unpack Lim Ewe Ghee’s logic by questioning if the hard earned innovations that triumph in a market economy, by virtue of the wealth they generate, do in fact serve us better.

For one, there are a lot of things a free market economy would welcome that is profitable without necessarily improving society as a whole. Cigarettes are widely purchased and consumed without leading to improvements in anyone’s health or finance. Whatever virtues there may be of having, among other things, pornography, prostitution or firearms in the open market cannot be confirmed purely on the basis of their potentially high demand.

How and why such things can be said to “serve humanity” must take into consideration a host of other factors, above and beyond what market forces or individual whims suggest.

One can extend that line of thinking to even more basic goods. The genetic modification that now routinely goes into the manufacturing of our everyday meats and vegetables has all to do with the necessity of rapid production in a competitive profit driven food economy.

The motivation in such cases is not the happiness, well-being or health of others, but the size of the product and the speed and quantity of production. So by that logic, it does not matter that the meat we eat is injected with cancer causing chemicals so long as an edge is gained by the producer to triumph in a rapidly competitive market.

 

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An Examination of the Political and Economic Crisis in Ireland


I very much enjoyed this documentary. I find it insightful. A citizen of Ireland who worked as a foreign correspondent returns home and looks at his country with some perspective.

It’s easy to see the very similar problems in both the United States and Ireland. In both cases, the government baled out the banks without asking any serious questions nor taking into account the actual value of the bank loans. In both cases, a real estate bubble that was clearly propelled by speculation was considered to be a safe and continuing source of prosperity for the country. And in both cases, the taxpayers wound up footing the bill, while unemployment doubled and services were reduced.

In other words, the well connected walked away and discussed with great seriousness their loss of reputation and minor financial irritations, while the great majority of the nation’s citizen’s suffered for their crimes.

James Pilant

Ireland The Rise and Fall of the Economy, Real Estate, Development – YouTube

 

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Listen to the “Morality” of Laissez-faire.


The English government during the Irish Famine of 1845 – 1852 adhered strictly to a doctrine of Laissez-faire. I want you to listen to the cold blooded ramblings of a government in thrall to a cruel, vicious and irrational policy concept. This is where economic philosophy confronted tragedy and compounded it.

Watch the clip and see if you can avoid recoiling in horror at the voices of the decision makers mindlessly repeating the necessity of letting the market have its way.

James Pilant

Laissez-faire

When Ireland Starved Episode 3 Managing The Famine (Part 1 of 3) – YouTube

When Ireland Starved Episode 3 Managing The Famine (Part 1 of 3) – YouTube

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Business Ethics (Friday, February 25, 2011)


No Irish Spring: Emerald Isle as Credit Crunch Microcosm (via The Big Picture)

Unemployment is now 13 percent in Ireland; it would be higher if 5 percent of the working-age population (principally the young and well-qualified) had not emigrated over the last two years.

Bankers Apoplectic Over Arizona’s Republican Dominated Senate Passing Chain of Title Bill, 28-2…by Martin Andelman (via ForeclosureBlues)

Frankly, I don’t know where to begin. There’s just so much to say. It’s like a cornucopia of… well, lots of stuff to say. Bankers everywhere must be walking in circles, muttering to themselves, perhaps breaking out in hives.

(Foreclosure Blues is just the best site for foreclosure news – If you want the best coverage of the foreclosure crisis, there’s no better place.)

Wall Street Cash Bonuses Fell in 2010; Average $128,530 (via Business Ethics, The Magazine of Corporate Responsibility)

Cash bonuses paid to New York City securities industry employees declined by nearly 8 percent to $20.8 billion in 2010, as Wall Street firms shifted toward more deferred compensation and higher base salaries, according to an estimate released by New York State Comptroller Thomas P. DiNapoli.

For the average Wall Street worker, however, that still translated into a 2010 cash bonus of $128,530, according to DiNapoli’s estimate.   And although cash bonuses were down, it’s estimated that total compensation on Wall Street rose 6 percent last year, DiNapoli said.

Only $128,530.

Democracy in the Workplace (via Richard D. Wolff)

Wolff has some very interesting idea and some sharp commentary.

Blogoversary and Why I Blog (via Compliance Building)

Mostly, I publish because the information is useful to me. This blog is a personal knowledge management tool. It’s all about trying to capture information that interest me and has relevance to my day-to-day work. I find that writing my thoughts adds some clarity to my thinking. By putting all of that information into the blog, it’s in a place where it is easy to find.

I promise you when I am tired – when my allergies are bothering me or just feeling a little out of it, I wonder why I blog. Compliance Building has a good handle on why it is important.

James Pilant

An Education Of Greed Destroys Nations


From the Independent.ie (Ireland), Anto Kerins writes
Our graduates need an understanding of, and a facility for, effective regulations, appropriate rules and ethical frameworks to guide organisational behaviour so as to ensure the safety and vibrancy of our economy and society.
 
 

 

From producing graduates who absorbed the mantra of deregulation and light-touch rules, we must now imbue them with the importance of ethical and regulatory frameworks and the ability to distinguish between rules that keep us safe, solvent and effective and those that just take up time.
 
 
 

 

 

 

Ireland has just experienced an ethics meltdown in the financial sector. I believe they are taking much stronger action than we have contemplated to solve the problem. I do not believe their anger is leaving any time soon. They have no beltway “wisdom” that is everything is okay except for those whiny unemployed. There is a determination for this to never happen again.

Read further –

While the economic and regulatory wings of Government are now desperately trying to get us out of the hole we are in, it is mainly to education that we look to ensure this crisis never happens again. Although the Government and its agencies are feverishly working to bed down a powerful and effective regulatory regime to keep us afloat, it is to education that we look to encourage the long-term development and sustenance of this framework.

I’m reading through the Hunt Report. It is not like anything I have seen in the United States. We have been all about job training and getting rid of those annoying history, philosophy, art and literature classes. The Hunt Report emphasizes the need for more of these, not less. I’ll be posting on this later.


James Pilant

Irish And Greek Bailouts Won’t Work!


James Saft
James Saft writing on his blog discusses the strange bailouts of Ireland and Greece. “What’s strange?” They are unsustainable. They are disastrous. They are a bandaid that won’t hold. This essay uses the word, bizarre. That is correct.

James Pilant

From Reuters

So let’s recap, because this is truly bizarre: Lenders to Ireland or the other troubled states won’t take a hit now but if they stick around until 2013 then they will take losses along with the taxpayers. Oh yeah, and the current round of bailouts are aimed at seeing Ireland and Greece through the next couple of years, at which point it will become extremely dangerous to lend to them, as their economies will have shrunk, their debt burdens bloomed and private lenders will be on the hook.

To add to this, the European Stability Mechanism, the name of the new fund, will be senior to all creditors except the International Monetary Fund, meaning that in the event of a bankruptcy it would be paid first. Ratings agency Fitch looked at this provision and quite rightly said that it might lead to lower ratings on shaky euro zone sovereigns.

The only way you could make this policy mix work was if you could find a very rich lender with no ability to conceptualize the future. Hmm, let’s see a rich entity with limited ability to fully imagine a future state – it must be the European Union!

Few private lenders will stick around, they will sell their bonds and the only buyers will be the EU or ECB, which itself as it understands this predicament is hugely unwilling to play along.

Germany and France are both so unwilling to both have principles and pay for them that they are refusing to act on proposals for common European bonds and are expected to resist moves to increase the size of the European Financial Stability Fund, the vehicle now being used for bailouts.

Okay, do you get it? These aren’t solutions. They are designed to tide things over until someone new is in office to take responsibility. And especially, they are designed to appear as decisive action when they are nothing of the kind.

It is important that both Greece and Ireland elect new governments charged with challenging these horrendous plans that smack only of disaster. Those countries deserve better, and their citizens should demand better terms. These are sovereign nations not American homeowners subject to the whims of banks.

Let democracies exert the power of the people, the one and only thing that banks fear.

James Pilant

An Irish Show of Irish Strength (via homophilosophicus)


Our buddy in Ireland has survived the demonstration to bring us an account of it. It was not very successful and there was no violence. (I like the no violence part.) He gives an account of the events of that day in usual modest way. It was a good read for me.

James Pilant

An Irish Show of Irish Strength There once was a time, before the introduction of the blasphemy law (January 1st 2010), when one could find a comic picture postcard in the tourist trap shops of Dublin citing all the reasons why Jesus was Irish. It ran something like this: "Jesus was Irish because he never got married, he was always telling stories, he lived at home until he was thirty three, he was convinced his mother was a virgin, and she was sure he was God." At the best of … Read More

via homophilosophicus

A Spectre is Haunting Ireland – the Spectre of Fascism (via homophilosophicus) [8]


This is Homophilosophicus take on the Authoritarian in Irish History and the last in today’s series. I hope you’ve enjoyed reading this as much as I have.

He has a thoughtful mind in a difficult place in a terrible time. The combination is painful but often results in very fine writing.

James Pilant

A Spectre is Haunting Ireland - the Spectre of Fascism One cannot help but be wryly amused by the accusation that the government and police authorities are fascists during this time of social discontent and upheaval. It sounds vaguely reminiscent of the language of the European student revolutionary movements of the 1970s à la John Sullivan’s Citizen Smith. No matter how often the term is used to describe the present régime it creates an involuntary smile across so many faces. No sensible person wish … Read More

via homophilosophicus

Revolutions are the Locomotives of History (via homophilosophicus) [7]


Homophilosophicus is angry. Big Time Rage. So, keep your computer away from combustibles and read.

James Pilant

Revolutions are the Locomotives of History Ireland has betrayed her children. No more can the republican rhetoric of the young state name the Saxon as the cause of all Irish woes; the current crisis was the cause of an wholly Irish government elected by the people of Ireland. The community of Ireland has been stripped and shamed by powerful and corrupt Irish men and women. However much this employment of famine economics may be reduced and subjected to a post-colonialist analysis, and a c … Read More

via homophilosophicus