Amazon, Google and Apple Won't Need To Pay Tax, Despite Goverment Threats 327
girlmad writes "Despite moves by government to get Google, Amazon and Apple to admit they make sales in the UK and US, and therefore should pay tax on these earnings, this article argues these are empty threats and that any taxes paid will get returned to the tech giants in government grants and subsidies. Tough luck to the small firms out there."
Re:they are paying taxes (Score:4, Interesting)
In the EU sales tax is applied in the source country. Companies like Amazon are often based in countries like Luxembourg because of low sales tax rates. The UK government gets no sales tax from Amazon sales (even though the goods are ordered from a co.uk website and shipped from UK warehouses).
This makes no sense. In fact, it makes so little sense, that I don't believe it. I just did a Google search on European sales tax (VAT) policy, and several sites, including this one [retailresearch.org], contradict what you claim. If sales are below a threshold they are based on the shipping country, and if over the threshold they are based on the destination country. At no point are they based on where the company is incorporated, as you claimed.
Re:Remind me,,, (Score:4, Interesting)
Just to be clear, I'm looking at all of this from a UK perspective.
There are some professions that are very well-paid, if and when you make it to the higher levels. You mentioned doctors, so let's consider that. Those hospital consultants and GPs who are earning a tidy living at 40 were probably junior doctors at 25. Maybe it's different in the US, but in the UK that means working around twice as many hours as most of us do, severely limiting social life and relationships and several years, and getting paid a fairly feeble wage, certainly far less than anyone with the drive and aptitude to become a senior doctor later could be earning in another field. Even when they become senior doctors, these are people who may be charged with making decisions that are literally life and death, and a lot of them are still working pretty long hours with all the admin that comes with those jobs on top of their clinical work. I don't think paying those people a high wage is at all unreasonable in return for all they did earlier in their lives to get there and in recognition of the skill and experience that they possess as a result. If you want an insult, bundle people like that in the "rich" pile with movie stars, celebrity sportspeople, and old money inheritors who might never have put in an honest day's work in their lives.
As for the entrepreneurs, you're quite right that it's a big risk and many people lose even if they do nothing wrong, but I think it's laughable to pretend that "everyone" works as hard and takes the same level of risk and makes the same level of sacrifice in life. Anyone who is bootstrapping a new business is probably giving up a lot that they could have had and done in order to get that business going, and even if the business is successful it will be paying tax itself and probably contributing to the economy by employing further people before it pays out any big profits. Again, it seems crazy to me that we might look at someone who has maybe risked all their savings, delayed having a family, learned a multitude of useful skills, basically given up a few years of their lives to get a business going, and then if their business is successful still begrudge them earning even 2-3x what they could easily have made in a regular day job. And yet, that is where the top tax rate in the UK kicks in at the moment.
Re:Don't You See... (Score:4, Interesting)
Your taxes go to pay for things we ALL need. Like roads, and firemen and teachers.
Roads are paid for (mostly) by fuel taxes. Fireman and teachers are paid out of local property taxes. Those taxes are fair, reasonable, and almost impossible to avoid. Income taxes, on the other hand, are easy to avoid by anyone who puts some effort into it. I am self employed, have a six figure income and, through completely legal means, I pay no income tax. The problem is not that the system needs some tweaks to close "loopholes", but that trying to tax net productive activity (rather than consumption or ownership) has perverse side effects and is fundamentally unfair. No country has ever made income tax work well.
Re:Apple paid 1/40th of ALL corporate tax in 2012 (Score:1, Interesting)
Re:You voted them into office, now suck it up. (Score:4, Interesting)
We're drifting a bit off-topic here, but I just wanted to say that I think education actually was one of the other areas where any incoming government was going to be doomed before they even took office.
For years, our education system at secondary and tertiary levels has been based on fantasy. Standards haven't really risen dramatically for decades for secondary school leavers, but it's easier to appease parents and teachers by pretending they have than to pick the fight. You can't really put 50% of each generation through university and expect that the degrees they come out with will get all of them the kinds of graduate jobs that used to be available when only 5-10% of each generation continued on to university. You certainly can't do that, and then not only remove financial support but actively charge a small fortune for the privilege, leaving entire generations saddled with debts before they even start their first real job, and then expect that there will be no negative consequences.
Unfortunately, anything that would fix these problems requires acknowledging that the teaching profession has been covering its collective backside for years rather than confronting the small but significant fraction of professional teachers who simply aren't up to the job. It requires admitting (or at least understanding) that the quality of teaching at universities is often pathetic, and that being an illustrious institution with an international reputation to protect does not change this. It requires honestly confronting falling standards and recognising that the entire basis of our higher education system is unsustainable and economically crippling a generation. It will take big changes to fix these things one way or another, but it was a constant pressure for change and improvement that created many of the underlying problems in the first place, so what to do?
Gove himself is a slightly odd character to me, because half of the time I feel like he's the first Education Secretary we've had in years who actually has the guts to stand up and tell it as it is, but the other half of the time I wonder where he dreamt up this or that crazy idea and what he was smoking when he thought alienating this or that major part of the education profession would help.
Re:Remind me,,, (Score:5, Interesting)
Wow, I'd like a 35% tax rate; ours in NL starts at around that percentage, and goes up to 52%... with that upper bracket kicking in real fast at around â55.000 taxable income.
"Taxable income" is the important term. Talking about the tax rate is pointless when you don't add what "taxable income" is. In one country, the cost of driving to work is deducted from your income to calculate "taxable income". In another country, they are seriously thinking about adding the benefit of having a free parking space where you work to your income to calculate "taxable income". In one country, mortgage payments are deducted from your income, in another country they aren't.
"Tax rate" on its own is meaningless. What you need to know is how much tax people in comparable situations actually pay.