How Ireland Got Apple's $9 Billion Australian Profit 288
elphie007 writes "An investigation by The Australian Financial Review has discovered how from 2002 to 2013, Apple has shifted approximately $AU8.9 billion of revenue generated in Australia to Ireland, via Singapore. The article states that last year alone, Apple Australia paid only $AU88.5 million in tax, or 0.044% of estimated potential tax liabilities. What's more, the Australian Tax Office has agreed that this arrangement is acceptable under Australian law."
Don't be so harsh (Score:5, Funny)
Remember Legal != Moral (Score:5, Insightful)
Remember moral != Legal, so just because they were able to cheat, doesn't mean they should. Also, they were under no legal or moral obligation to play silly buggers in order to cheat the Austrailians out of tax.
and yes it's cheating because they get to use all of the resources that Aus provides to allow business to make money the pay for almost none of it. That makes them little more than freeloading scum.
Re:Remember Legal != Moral (Score:5, Insightful)
the answer is simply to change the law, stop any tax-sharing agreements with foreign governments that allow super-low rates of tax, or refuse to recognise any "head office" that is little more than a postbox.
I mean, if the government (not just Aus) said "We agree with tax sharing but the tax rate here is 20% (or whatever) then we will recognise the tax paid by Apple Investment Holdings (Bermuda) Ltd at 1%, but we still charge the remaining 19% to the company's revenues made here".
The head office thing can be dealt with just like the EU 1995 directive that was applied to banks after the collapse of the BCCI bank - their HQ has to be in the same place as their registered office. (this is not so they can avoid tax, more that they can be effectively regulated, but I guess it wouldn't hurt WRT tax).
Re:Remember Legal != Moral (Score:5, Insightful)
It's not cheating if the ones making the rules (The Aussie government) says it's perfectly legal.
Re:Remember Legal != Moral (Score:5, Insightful)
It's not cheating if the ones making the rules (The Aussie government) says it's perfectly legal.
It makes me wonder exactly when and how those rules got onto the law books, how they were sponsored, and what relationship the supporting politicians had with the major corporations of that time.
There are lots of ways to cheat that are legally legitimate.
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The laws are reasonable - they allow costs to be offset when calculating profits.
The problem occurs because
A can sell to B at cost who can sell to C at the price that C finally sells for and the only person making any profit is B.
Perhaps the market is very competitive, A cannot sell above cost. C cannot buy at below the price B will sell at. (obviously in the real world A and C would need to make some profit but it's not inconceivable that A and C are working with margins of less that 5% while B is working
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Re:Remember Legal != Moral (Score:4, Insightful)
That makes them little more than freeloading scum.
You are correct. So did MItt Romney when he took advantage of a loophole in the law to move over $100 megabucks to a tax shelter in the Bahamas.
This is all perfectly legal, just like tax breaks and welfare is perfectly legal for people who are poor.
Which of these two did he choose to highlight as immoral? The poor person of course, not Apple's or his own immoral behavior.
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It's worse because they claim to be a moral organization. Investors were told that environmental considerations come before profit, for example. Just not social considerations, apparently.
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Hmmnm – that is a interesting idea. Since environmental protection is the most important thing why stop with the shareholder’s profits? Raid the worker’s pension funds and skip paying taxes. Or maybe just shut down production? Of course this leaves the question as what is important – CO2 reduction, water quality, processing of hazardous waste. Can I dump a lot of hazadus waste into the local river if it drops my CO2 footprint to zero?
Or, here is a different idea – we as a socie
Remember Legal also != IMMORAL (Score:2)
so just because they were able to cheat
By definition what they are doing is not "cheating" if the tax department says it is legal.
As much as you and people like you want to paint Apple with the Evil brush, what Apple is doing is sound AND ethical . There's nothing wrong with shifting profits around in the way Apple is doing it, not legally OR morally.
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I think legal = moral, heck I do things that I believe are moral that may be considered illegal in some parts of the world. If you've ever downloaded music or movies, if you've even linked to a site you did not own copyrights to, you may have done something illegal regardless of how much people it helped. If you're gay, if you have sex without being married, if you smoke pot, if you drink alcohol, all those things are immoral or illegal in some communities.
Your definition of morality should not imply that I
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So, how did they "cheat", exactly? By not paying any more tax than they were legally liable for?
Nor were they under any legal or moral obligation to pay extra taxes to Australia.
It always amazes me that so many people seem to think that anyone (corporation or individual) should pay more taxes than they're legally obligated
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I agree that the thing to focus on is the tax structure, but this seems like a good example to illustrate how it is messed up. So we ARE talking about that.
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No, the law is pretty clear. Management has a fiduciary duty to manage the companies’ assets for the owners – that is the shareholders. The sections range from SEC rulings, state fraud laws, national insider trading rules, etc. CEOs can’t (or at least shouldn’t) just give money away to people they like.
That being said, there is a huge amount of discretion when applying the law. Starbucks getting bad press in England due to laws – it makes a “voluntary” contribution
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When would “taking care” not mean “maximizing return”? And I would like the answer in a total return context – that is on a risk adjusted basis.
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If you are "taking care" of your neighbors kids do you have to "maximize" the effect? Do you have to feed them the best foods, only let him sleep on the best mattresses, take them to the best doctors?
No, you are only required to ensure that, within the best of your ability, he leaves as he enters, not that he leaves better then he entered.
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Citation please?
This article shows that they make, as an average, 20% of the income and pay 20% of the taxes, http://www.ctj.org/pdf/taxday2... [ctj.org]
of course that is generally speaking, not specifically speaking. Meaning that those who dodge the taxes in this way are paying lower than that, making them freeloading scum, while the part of the group paying more are making up for their freeloading.
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The Australian government makes the rules and the tax office implements them.
It seems Apple have complied with the rules.
If a majority of Australians are unhappy with what has happened, the correct response is to change the rules.
You are correct, however corporate media will spin this on behalf of the corrupt/immoral politicians that serve large corporations and keep the citizens in the ignorance. Lots of fuzzy warm feel good sound bites like "trade deals allowing tax breaks to foreign companies are good for our farmers", "allow us to grow our export industry" etc etc despite little actual evidence [wikipedia.org] after decades of such deals being in place. Australians are particularly at risk of the corporate media chamber given that Murdoch Medi
But why wouldn't they? (Score:4, Interesting)
If you got $500 from writing a tech article, would you rather pay $200 of it in taxes or $2?
Also, doesn't Apple have a duty to shareholders to cough up as little in taxes as legally possible?
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I'd rather claim a loss on writing the article and get a $200 refund on top of keeping my $500. But sadly, I don't live in Hollywood so I can't do that.
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Some creative accounting never hurt anyone. Pay yourself a salary of $700/article and then claim a loss.
Re: But why wouldn't they? (Score:5, Insightful)
And it is unethical. If only those wealthy enough to set up shell corporations and make imaginary tax evasion schemes can participate in evading taxes, but those that can't are forced in the burden of taxation, despite the expectation of the law to be that every company or entity be taxed.
If you accept that there is a duty for all to be subject to the same tax law, which I think we all do (regardless your perspective of tax evasion), then abusing a loophole to keep from paying taxes violates Kant's FUL, and is therefore also logically unethical if you follow Kantian ethics. For Utilitarians, I am sure you could make the argument that the tax evaded dollars serve the evaders far less than the good taxation does for Australia, but I don't follow that regime.
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Actually several legal systems disallow loopholes. That is, when the intent of the law is clear and any normal person could see that the loophole was a missing case in what was meant to be an exhaustive list, then the loophole doesn't apply.
On the other hand one can have a "to the letter" legal system which results in bills 5,000 pages long that still can be abused by anyone employing a sufficiently resourceful lawyer. This seems to be the preferred choice in the USA and several other countries but it doesn
Ethics are not universal (Score:2)
Their duty to shareholders comes after acting ethically.
I agree in principle but the problem with that argument is that it is easy to disagree about what is ethical. Many people see no ethical problem whatsoever with polluting or discrimination or tax avoidance or all sorts of other damaging/problematic behavior. Hell, a lot of people think it is downright heroic to stick it to the tax man. The usual argument for allowing pollution is that it is more ethical to allow pollution than to lose jobs. It might be a poor argument but many people honestly believe th
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You should trying asking that to Tim Cook at a shareholders meeting and see what kind of response you get. Last time he was described as "visibly angry".
Tim Cook is a tax hypocrite (Score:2)
You should trying asking that to Tim Cook at a shareholders meeting and see what kind of response you get. Last time he was described as "visibly angry".
Whatever. This is the same guy that bluntly told congress they were wrong [businessweek.com] to try to collect more tax from Apple. He talks about social responsibility but he only means it if someone else has to pay for it.
That's a pretty moronic take (Score:2)
He talks about social responsibility but he only means it if someone else has to pay for it.
No, Apple pays plenty (far more than any other company) for monitoring and reports on suppliers, for bonus to overseas workers that only Apple gives, for higher labor costs because they will not allow workers to be over-worked.
What does not make any sense is to pour MORE money into a giant engine of inefficiency that just wastes it. Why would anyone but a handful of government workers be better off if Apple paid mor
So you like to subsidize Apple? (Score:2)
No, Apple pays plenty (far more than any other company) for monitoring and reports on suppliers, for bonus to overseas workers that only Apple gives, for higher labor costs because they will not allow workers to be over-worked.
"Far more"? Demonstrable nonsense. There are plenty of companies that actually have their own facilities in China (and elsewhere) and I assure you that doing that costs FAR more than what Apple pays to "inspect" their suppliers. I've been to China and visited plants for companies like Emerson Electric which has over 10 plants in China. Apple sending over a few inspectors and "demanding" that they not overwork their workers (which BTW they still do) is hardly what I consider socially responsible. And Ap
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The way to fix this is legislation, not a moral appeal. The problem I have with the current tax situation is
Is duty to society duty to shareholders? (Score:2)
it's a bit naive to claim that Apple has a moral obligation to pay taxes if they have a legal way to avoid it.
It's not naive at all. They can have both a (perceived) moral obligation to pay and a legal way to avoid paying. The one does not preclude the other. The ability to do something about it is a separate issue. The question is whether their duty to society trumps their duty to their shareholders.
The way to fix this is legislation, not a moral appeal.
Bingo. Exactly correct. And the fact that such legislation has not been passed says everything you need to know about our elected officials and their priorities.
Our point is... (Score:2)
Government has a duty and responsibility to ensure that they are paying more like $40-$60.
Frankly, force corporations to be taxed on a W2. Hey, Citizens United, corporations are people, right? So use the same W2. And those corporations will in fact pay 1000x in taxes than what they currently pay.
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Because math and morality and directly related...
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Looks about right to me.
--
Verizon account executive
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Because they are Apple. No other reason needed.
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Because they never bring the money "back" into the U.S. If they did, they'd get hit with taxes. But keeping offshore let's them store it untaxed.
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Boards and directors due legally have a fiduciary responsibility to share holders. This is covered under countless laws like Sarbane Oxley and many others. This is, in a nutshell, a responsibility to report earnings and expenses completely and acurately. If the company is losing money or making money or just breaking even, the officers and leaders of the company are supposed to follow accepted accounting practices to record and report these things.
You are correct that there is no legal responsibility to m
With friends like these who needs enemies? (Score:2)
How long can this go on? Every one from the rich 0.1% of Americans, MNCs, two bit countries, supposed allies are all taking pot shots at Ame
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Australia is the one getting fucked here ... Australia has a trade surplus AND a current account deficit, they're a colony not a country.
At least the USA gets shit for free, you've been running a trade deficit for 4 decades.
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Free? Have you seen our defense budget? Spent mostly to defend our trading partners.....
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I think Ireland would have something to say about being called a territory of the UK.
Dual Citizenship (Score:2)
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Actually, the U.S. is one of the few countries who claim the right to tax income of its citizens, no matter in what country it was earned [americansabroad.org].
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The US also claims the right to prosecute its citizens for crimes committed in other countries... even if it wasn't a crime in the country it was committed.
The gain for Ireland? (Score:3)
I am sure they don't see much of the offloaded offshore profits.
So what does Ireland gain - other than may be few employees manning a registered office and may be a miniscule percent of the funds?
Is it a case of something is better than nothing?
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Free iPhones for life?
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> What's the gain for Ireland?
Seems like they get to host $9B. Now consider the mechanics of fractional reserve banking.....
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The only prize in the race to the bottom is just a smidgen of grease and crumbs, like when the peanut butter is empty.
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yes they did. The banks in Ireland can now use this money to make more money by lending it out.
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Apple is not a charity (Score:5, Insightful)
Apple - nor any corporation - is not a charity. It's not their job to pay more taxes than they legally have to. Their job is specifically the opposite - generate as much value for shareholders as they can.
Any company that pays more than they have to by law should be questioned, or the shareholders should revolt. Actually... I can't think of any example of one that does, intentionally at least.
So - the issue is NOT with Apple - TFS even says that the Australian tax office agrees this is all above board - but the issue is with their tax system. It's structured to allow that, intentionally or not. There are all kinds of tax incentives in the world, and they're all there to encourage the right mix of business development and growth that the region needs. Essentially, tax is used as an incentive to offset the disadvantages that would otherwise naturally be there (labor cost, non-ideal locations, skill levels, etc.).
Don't be mad at Apple... EVERY company does this. Haters be hat'n, I guess. :)
Which is why (Score:2)
This whole idea of paying taxes on "profits" is silly. If governments wanted to get taxes, they'd switch to gross receipts tax. Of course, their corporate masters won't let them, but that's a whole different problem.
Right....moron... (Score:3)
What we're saying is that the LAWS need to be re-written so that they can no longer legally pay such a low amount of taxes. And we are sharing this as an example of how extremely poor the laws are, and what a crappy job our government is doing in it's role.
And in Apple's case, they're in very gray territory. Creating a subsidiary company, and then charging it from another subsidiary company and insane license agreement. If it can be successfully argued that those charges are unrealistic (ie: no other compan
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Don't be mad at Apple... EVERY company does this.
Don't be mad at the Steubenville rapists... EVERY rapist does this.
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When you say something as generic as "generating value" then paying sufficient taxes could be considered an investment in the solvency of your target market. Any number of rationalizations could be made in either direction. You are correct though that the problem is not with Apple though, it's the citizens fault for not requiring a modicum of fairness in the tax code or at the very least shaming and boycotting corporations who are leeching.
Your "hater" phrasing does actually piss me off. Would you say th
US Patriotism (Score:2)
Totally missing on those $-addicts.
Seems to come with their genetics.
Not even sure if the word "patriotism" is the right term here. Maybe patriotism is including to cheat in taxes.
Nevertheless, people hate the taxman because they distrust the receivers - government.
So, it's an ingrained fad to reduce tax payments as much as possible.
Stash it away in Grand Cayman, Switzerland and hope you don't get caught. That's the smaller guys.
The larger whales in this game are doing it legally by feeding part of their st
random audio ads on /. (Score:2, Insightful)
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Someone got caught goofing off on slashdot when they where suppose to be working...
they didn't break the law (Score:2)
but that doesn't mean they aren't a bad actor.
Hopefully AU will change their regulatory law to stop this sort of greedy crap.
The US as well..also, well, everywhere else.
88.5 million is 0.044%? (Score:2)
Re:Ireland got it ? (Score:5, Insightful)
http://en.wikipedia.org/wiki/D... [wikipedia.org]
Ireland uses territorial taxation, and hence does not levy taxes on income booked at subsidiaries of Irish companies that are outside of the state. In the late 1980s, Apple Inc. was among the pioneers in creating this tax structure.
I guess not. They just siphon all the profits using Hollywood accounting over imaginary property to Ireland and stash them in Bermuda.
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The territorial taxation remark is off point. Everybody except the US (and a few very small countries) use territorial taxation. The US uses domical for taxation which is not compatible. Congress has passed a bunch of kludges to “fix” the problem but it causes major headaches. Half of the issues that surround US multinationals are due to this. It would be much more rational if we jointed the rest of the world with residential taxation.
As for the Double Dutch and other tactics – it kind of
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I've said, and will continue to say that we should not be imposing Taxes on things that we should be encouraging, like income. We should be taxing the things we want to curtail. Taxing income is downright EVIL, as it is a disincentive to actually working, which is only overcome by most people's need to better their lives.
How about instead of taxing income, you tax money being transferred out of state/country?
Re:Ireland got it ? (Score:4, Insightful)
How about instead of taxing income, you tax money being transferred out of state/country?
Because that would discourage free trade and international investment – it would tend to be even more distorting and inefficient than an income tax. Industries would tend to be local, smaller, and less efficient. And why would people want to invest abroad knowing that their income would be taxed when it comes back to them.
The US already kind of does this. As one of the kludges to handle the resident / domical issue money left abroad is not taxed. This has led to some weird situations which non-US companies avoid.
As to taxes being evil – that is a different kettle of fish. We can debate what type of levels of taxes there should be. My principle point is that the US use of dominical instead of residence / territory is highly inefficient and distortive. If we are going to have a corporate income tax then we should have the best one out there – which means using residence / territory like the rest of the world.
Side note - I have seen studies that corporate taxes under ~15% have a low to no impact on future investments.
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It is a requirement of international business – and in theory it must be done. Look up transfer pricing.
I will use Toyota as a good, solid concert example. Toyota Inc. designs a car, Toyota Japan builds the powertrain which it sells to Toyota USA, which builds and sells the car. The car generates $1,000. Quick – how do you divide the profit? If Toyota wants to pay Japanese corporate tax they increase the price that they sell the powertrain to the US, shifting profits to Japan. Or if they want to
Re:Ireland got it ? (Score:5, Insightful)
The norm: we NEED to shame them. (Score:4, Insightful)
Yes, I agree, things do have to change.
BUT people will NOT take notice until you DO start shaming individual companies.
That's how change happens.
Just throwing up your hands and saying, "Oh well, it's the norm. It's got to change." Means nothing to people; which means you are not going to get the political class to do something about it. They'll just keep things the way they are because people won't notice.
People have to get outraged. They have to see INDIVIDUAL companies and INDIVIDUALS who don't pay taxes because of BS like this: see the Forbes 400 for many of the folks who legally dodge taxes because they made up the rules.
So we NEED to shame Apple, Google, GE, HP, IBM, and every other golbal mega corp that shifts profits around the World to avoid taxes. We need people like Warren Buffet to say, "Hey look, my secretary has a higher effective tax rate than I do."
And this bullshit of "well if Buffet doesn't like it, then he can pay more on his own!" doesn't cut it because there are HUNDREDS of other billionaires and centi-millionaires who are getting away it.
We NEED 1950s income taxes again - adjusted for inflation, of course.
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This practice actually has a name, it's called transfer pricing, and the government was about to crack down on it (I believe some time back in 2007) and a bunch of companies simply threatened to move overseas if it happened. And quite honestly, in order for them to remain competitive with other foreign companies, they would HAVE to do exactly that. That is, even if they didn't move overseas, their operating costs would be so high that they'd eventually be driven out of business anyways.
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Taxes adjust themselves for inflation, they are a percentage of ______.
However, the taxes will need to be adjusted for the additional services provided by government today, as compared to 60 years ago.
...Apple tends to get singled out for some reason (Score:4, Insightful)
...Apple tends to get singled out for some reason
Advertising on column inches. A story about Apple gets more views than a story about some other company.
It's the same reason we keep hearing about "Google busses" being stopped, even though one of them actually belonged to Intuit; reporting it as a Google bus sold more ads per column inch than reporting it as an "Intuit bus" would have.
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Lol, as if any other companies are any better. Microsoft has been doing this for far longer than Apple, so has Amazon, Cisco, Dell, Dropbox, eBay, EMC, Facebook, Google, HP, IBM, Intel, LinkedIn, Logitech, Oracle, PayPal, Twitter and a number of other companies.
Re:Ireland got it ? (Score:5, Insightful)
Of course you're right. This is one of the reasons I drum the "all taxes are regressive". The rich can and will avoid as much tax liability, often quite legally (like this), while the poor and middle class cannot, because they do not have the resources. If you could spend 100 to save 1000 in taxes, wouldn't you?
There is a fix for this, a transfer tax, rather than an income tax. Tax money leaving your country. The easiest avoidance of these taxes is to keep the money in country, helping the country's economy. If money NEEDS to leave, then it provides an incentive to bring jobs home and use the resources of your own country.
Re:Good (Score:4, Insightful)
I don't know what summary or article you read, but it concludes that the minimal paying of taxes using this strategy is perfectly legal under both Australian and Irish law. The only precedent is that... business can continue as usual.
Re:Apple / Google / etc (Score:5, Interesting)
I'm not sure that makes any sense. The article is about how this was a perfectly legitimate tax strategy. And if the world has their eye, that means Apple/Google/etc are watching everything... not the other way around.
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...Apple/Google/etc are watching everything
Do you doubt Apple's accountants and lawyers are watching the taxing policies in all countries to minimize their tax burden? iSeeYou.
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Perfectly legal....not perfectly ethical. There is a difference.
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You don't have 'profits' if you had the 'expense' of paying royalties on imaginary property (IP) that is actually 'owned' by an offshore subsidiary of yours. That's what's happening.
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Why is perhaps why businesses should get taxed on income (aka revenue) like the rest of the tax payers.
Nothing would destroy the world economy faster than this staggeringly short sighted idea. A typical grocery store averages about 2% profit on sales. If, for example, a store pays $2.00 for a gallon of milk that it sells at $2.05 any tax that takes more than $0.05 make said grocer unable to restock his dairy case. How long exactly do you expect any store to remain in business under those terms?
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That is not how it works.
Under your scheme, GM and Google would pay about the same amount in taxes because they have about the same amount in revenue, even though Google’s profits are much higher. Besides, I would be hard pressed to think of a example where a corporation could spend money to decrease profits? Pay out more to employees? That would be picked up in income taxes. Spend more on capital improvements? That would be on the asset side, not the income side – no effect on profits. Overpay
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Umm, you should read the article. It does not say 30%, it says 4%. In fact the word, or number 30 is not mentioned in the article at all.
The company is not tax resident in any jurisdiction ... The average tax rate for all jurisdictions in which it operates is approximately 4 per cent.”
But
In its ASIC filings the company reported pre-tax earnings outside the US of $US4 billion in 2009 and calculated that 4 per cent tax would be $US160 million. The accounts show the actual tax paid was only $US3.65
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That's 30% of profit, but loop holes allow companies to eliminate profit from their revenues. So you'll have a $100 million in revenue, but use loopholes to reduce your net profit to only $5 million, and sure you may pay 30% on that $5 million. But it should of been paid on the entire $100 million.
If I could file taxes like a corporation, writing off my lease/loan payment of my buildings, my vehicles, deducting my utility costs, and many other incidentals. The result is, that I could pay myself a mere stipe
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let's gather together and reinforce our anger/banding-together memes. AKA politics as intended.
It depends on whether the audience has the maturity to read about an event without automatically getting upset about it. Sadly, most Americans have been conditioned by repeated example to do the opposite. This is highly desirable from the standpoint of the media, because irritated emotions tend to shut down critical thinking.
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Wrong, they cheat by paying millions to buy our elected officials to pass laws that let them legally cheat.
This is akin to paying off the referee. Sure, there were no calls against you. But there should of been.
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Go talk to your legislator if you are upset.
I can't afford to. According to the Supreme Court, campaign contributions are free speech. I spend all my speech feeding my kids and paying my mortgage this month.
Re:Happens here in the U.S. too.. (Score:4, Interesting)
to be fair its a bit more complex than that, the rich do get stung for tax. In the UK you can see the proportion of taxation [hmrc.gov.uk] based on income bands. The top 50% pay 90% of the tax take, the top 5% earners pay 47.9% of the total tax.
Its eye opening how much the wealthier pay towards society compared to the poor. Now I don't mind that so much, except that the super-wealthy tend to have far too much compared to the rest of the population, and the general disparity between income is far to great nowadays, but to criticise the wealthier half of the population because the poor think the rich should pay more is a bit uninformed and a bit selfish.
Still, we need to get rid of these loopholes, make tax simpler, much simpler, and apply it to everyone.
Re:Happens here in the U.S. too.. (Score:5, Insightful)
No the problem is the wealthy are constantly arguing visibly and publicly that the poor are stealing from them, and that they should be allowed to opt out of supporting anyone. For things like food and medicine. Because it the super-wealthy are just so upset at looking at that big tax number on paper (they are not affected in any literal fashion whatsoever - if they were, they'd be middle class...who also are frequently on the list of "people who should pay more" from the super-wealthy).
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With the value of labour dropping through the floor due to automation, globalization and peak consumption that would just be a one way ticket to feudalism ... well unless you have some kind of progressive consumption tax.
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because i have been in the past.
"last year alone, Apple Australia paid only $AU88.5 million in tax, or 0.044% of estimated potential tax liabilities"
implying that Apple Australia made $AU200 billion last year?
Yes you made a mistake. You correctly calculate (88.5 * 0.044) * 100 million or about 200 billion. What you forget though is that this is the tax liability - not their profit. Since the corporate tax rate in Australia is 30% [ato.gov.au] this means their profit was 200 billion / 30 * 100 or 667 billion odd.
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It would destroy the middle class, increase the wealth gap, cripple trades, and we would take a steep hit in revenue.
What the fair tax doesn't take into account the difference in percentage basic needs to get along in society the rich have compared to everyone else.
And other issues as well, but I suspect anyone who thing the fair tax is a good idea probably wouldn't understand them. Not that the are necessarily stupid, but that they haven't learned to thin about the details of things and impact.
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So this "fair" tax - it takes all the money we give to corporations and lets them keep it. And in return, for every dollar we give to corporations for private jets, seven and eight figure CxO benefit packages, and lavish corporate offices, we also get to give a percentage extra to the federal government?
How about this: a gross receipts tax. Instead of charging you EXTRA when you SPEND (which hampers spending and, hence, the economy), you kick in a percentage to the general welfare (in the constitutional sen