Apple faces €1bn bill for Irish tax loophole

Apple has conducted itself in Ireland in full compliance with Irish tax law. The so-called "loophole" (aka lawful structuring) was not something devious used deceptively but was well known to — and accepted by — the Irish tax authorities. The Irish government agrees that Apple has done nothing wrong and is embarrassed at being put into this invidious position.

The EU Commission — probably at the behest of the leaders of core EU "boss states" envious of the high-tech jobs Ireland's well-educated, English-speaking young workers are enjoying. — has argued, and the European Court has now decided, that the arrangements were illegal "state aid" and the Apple should pay up to €13bn in taxes neither it, its legal advisers nor the Irish tax authorities think is due. As an Irish politician has already commented, "they want us to tax Apple here on money made elsewhere".

There is no doubt that Apple, Inc. acted in good faith. Its shareholders (probably including you, gentle reader, if you have a pension plan, life assurance policy or other investment as few portfolios lack some holdings of the world's largest company) have every right to be furious at the EU's attempt to rewrite the laws in retrospect to their detriment.

Theresa May's government should make it clear that it will replicate whatever attractive arrangements Ireland had been offering in return for the relocation of Apple's European operations here. Under longstanding arrangements that predate EU free movement, Apple's existing Irish employees are able to move here without restriction and even vote in our elections. They will be most welcome.

Outside the statist, near fascist mindset of the EU, there is nothing to stop Britain abolishing corporation tax (a pointless tax anyway as the burden of it — as a company is a mere legal fiction — always falls in truth on its employees, shareholders or customers). Then watch all the great companies of Europe as well as the Americas move here to be based in a place with the rule of law, the greatest reservoir of international legal, accountancy and other expertise in the world, no retrospective legislation and with the world's financial centre at hand.

With the extra taxes earned not from stupid corporation tax but from the income tax of the new British companies' employees etc., the government could pay for the infrastructure and educational improvements required to make sure the country and the new corporate arrivals reap the long term benefits of their short term decision.

How one family were brought to their knees by the taxman - Telegraph.

This appalling story gives the lie to those who claim the British state is not funded by force - that there is, in effect, some "social contract" by which we all agree to be taxed. As regular readers will know, I regard any word prefixed by the word "social" with suspicion. "Social" usually means nothing more than "I wish to restrain your actions or steal the proceeds of your life's work in the name of a group I purport to represent." Especially when if features in the word "Socialist" or in that most dishonest expression in the English language, "Social Justice."

The Best Bet Is Freedom | The Freeman | Ideas On Liberty.

There is no such thing as a magical public fund from which political gifts spontaneously generate. No matter how noble the intention or the cause, the benevolent politician is not Santa Claus. All goods distributed by government must first be created or produced by somebody. Whatever is given must first be taken. This is true for corporate subsidies and bank bailouts, just as it is true for transfer payments made to the very poorest members of society.

People by and large accept such a system because they believe they will be able to draw more in political advantage than they lose by way of political plunder. This mentality keeps the population playing the game, and like the casino, if enough people play the game, it is the political class and the politically connected that always win.

In fact the odds of winning in the casino are actually better than the odds of coming out ahead in the political game. In Vegas the house has an advantage of about 3-10 percent on most table games. Currently, U.S. government takes a 32.6 percent rake to serve as the proverbial dealer, cashier, and pit boss. The government spends more, regulates more, and interferes more in our lives each year – and the economy barely grows. Even with the odds stacked against the average person, people still seem eager to place their bets on the system by looking for political solutions. In Vegas they would call this a “sucker bet.”

Signs of protest: the best banners at the public services strike marches around Britain - Telegraph.

Wirral Resource Centre/Home Page.

Our country must really be in trouble. I knew tax offices were under instruction to turn every stone to find revenue for our desperate (and financially incontinent) government but who could have imagined this would involve reopening the 1990s tax accounts of charities? Had the error been in the Revenue's favour, of course, it would now be time-barred.

Fairness. Don't you just love it? Still, those shrill enemies of the Rule of Law over at #ukuncut will be thrilled.

As HMRC seems to lack the Big Society spirit, I urge you to follow the link to the charity's online donations page and drop a bob or two into its virtual tin. They only need £16,000 to be back where they were before some malodorous civil servant earned his collections bonus. I have given £100 and Mrs P the Elder has chipped in a tenner.

h/t Private Eye

In my days practising commercial law in London 20 years ago, we called our tax lawyer colleagues with the volumes of Tolley's Tax Guide under each arm "the deal busters." My, how their deal-busting weapons have grown. For those at the Socialist Worker Party front known as UKUncut, here are the rules that people obeying tax law must follow. That you have repeatedly claimed people going to the trouble and expense of complying with such detailed rules should then pay tax as if they hadn't marks you out as fools, scoundrels or both.

In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year | zero hedge.

It's not just in Britain that the Welfare State has become a quagmire of perverse incentives. Consider this chart (click to enlarge);

Does anyone (perhaps someone on benefits) have the time and energy to do the equivalent calculations for the UK system?

h/t Zero Hedge

The Spirit Level Delusion: Fact-checking the Left's New Theory of Everything: Amazon.co.uk: Christopher John Snowdon: Books.

I am reading Christopher Snowden's book, The Spirit Level Delusion, which sets out to rebut - graph by graph, statistic by statistic - the thesis of Wilkinson and Pickett's work The Spirit Level. These books are both worth a read (the latter - it seems - more for its influence than its accuracy).

The Spirit Level has been embraced by socialists of all parties as proof that equality makes everyone happier, healthier and kinder - and that redistributive taxation is therefore good for all. As someone who has lived in the former Soviet Union, it only proves to me (a) how short human memories are and (b) the truth of Paul Simon's youthful insight that;

"...a man hears what he wants to hear and disregards the rest..."

Let me cite one paragraph from Snowden's counterblast, referring to the chart clumsily reproduced above. The further right the country, the more "unequal" it is, apparently;

"Equal and unequal countries donate part of their GDP to good causes in their own way. More egalitarian countries use money from high taxes which is given away as politicians see fit. Low tax countries allow people to give to charities and causes as they see fit. But although one system relies on compulsion and the other relies on charity, it is the voluntary system that generates the greatest sums. As shown ... the amount France gives to charity amounts to just 0.14% of GDP, twelve times less than the USA (1.73%). Even if we add the 0.39% France gives in foreign aid, it is still a quarter of the American total of 1.91%. When the contribution of individuals is combined with that of the state, it is clear that less equal countries are at least as philanthropic as the rest and often more so."

Link: Garbagegate - A Stealth Tax Compendium.

Many scoffed at the the new Libertarian Party's first official policy - to abolish income tax. Yet their calculations suggested that, if UK government spending were reduced to the same level (in real terms) as when Labour took power, the savings would be enough to do it. This implies that had Labour's "stealth taxes" been implemented openly as increases in income tax - they would have doubled the rate. This was simply too much for most to believe. To be honest, I still find it hard to believe myself and am inclined to think the party was unwise to take its first stand on such a controversial platform. It allowed them to be too easily dismissed as cranks.

Now someone over at Garbagegate (a new site to me) has taken the trouble to document Labour's stealth taxes. Read it and weep. Then ask yourself, if (a) this list is accurate and (b) the Libertarian Party's calculation of the cumulative effects of those taxes is correct, how well HM Opposition and the media have been doing their jobs in the last decade. To achieve the equivalent of doubling income tax while retaining a reputation for "prudence" and making your opponents afraid to propose tax cuts would be a huge political achievement. While Gordon Brown may go down in history as a loser, his dark arts of political deceit will - I am afraid - be studied and emulated for generations to come.

h/t Prodicus