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Old 7th January 2018, 12:03 PM   #1
Bob001
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Apple rips off the tax man....

The author contends that Apple's wealth is largely the result of complex, multi-national tax avoidance schemes. Particularly interesting is that the notion of "offshore" money refers to its legal status, not necessarily where it was earned or where it's invested.
Quote:
Most people probably think of Apple as a tech company, but equally important to its existence is its creative power to avoid taxation. Indeed, Apple may more aptly be described as a tax-dodging enterprise posing as a tech company. That’s because Apple's business, soup to nuts, is the protection of their capital. It is their North Star, their morning brunch and evening rest. In November 2017, Apple's cash hoard totaled $252 billion, 94 percent of it held offshore. The corporation has benefited from public investment and public credulity: almost all of the technology in your iPhone was developed by taxpayer-funded research. Apple has repaid the public’s faith by working with Trump and the GOP to give us the recent tax overhaul — a pure piece of class war.
https://www.salon.com/2018/01/07/app...dodging-taxes/
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Old 7th January 2018, 04:18 PM   #2
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I guess they can afford the best accountants etc.
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Old 7th January 2018, 07:00 PM   #3
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Steve Jobs was always a better businessman and marketeer than he was a techie. Bill Gates was probably better at all three.
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Old 7th January 2018, 08:23 PM   #4
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I don't doubt any of this. However, as my tax professor said, it's not illegal to take advantage of the way people wrote the law.
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Old 7th January 2018, 08:42 PM   #5
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You get your benefit from Apple by buying its advanced and rapidly-upgraded products, not from taxing it.

Say that to yourself 1000 times.

It completely disgusts me little peons are getting angry at the corporations that keep them from having to live in caves gnawing at fleas on their bodies. You are the mindless cogs manipulated by your masters for their own political gain and wealth, which is generated by backing off on laws that harm business in exchange for money, or secret donations, or access to business deals normal mortals don't get.

"We haven't strapped sufficient millstones to that which moves!" they blather to the droolers.

"Authorize me the power to beat the *** out of them and I will make your lives better -- I promise!" they program into the minds of the cogs, to get them to behave in ways that will empower the politician to hurt the corporation in exchange for money from said corporation to not hurt it quite as much.
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The government should nationalize it! Socialized, single-payer video game development and sales now! More, cheaper, better games, right? Right?

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Old 7th January 2018, 10:49 PM   #6
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Originally Posted by Beerina View Post
You are the mindless cogs manipulated by your masters for their own political gain and wealth, which is generated by backing off on laws that harm business in exchange for money, or secret donations, or access to business deals normal mortals don't get.
If you believe the corporate line that they couldn't exist if they had to pay tax on their profits then you are calling the wrong person a "mindless cog".
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Old 7th January 2018, 10:57 PM   #7
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Originally Posted by Loss Leader View Post
I don't doubt any of this. However, as my tax professor said, it's not illegal to take advantage of the way people wrote the law.

But it sure as **** can be immoral.
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Old 7th January 2018, 11:59 PM   #8
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Originally Posted by Loss Leader View Post
I don't doubt any of this. However, as my tax professor said, it's not illegal to take advantage of the way people wrote the law.
Two issues: The relevant laws may have been written decades ago, when corporations largely made money by making and shipping physical products, not transferring patents and licenses to paper subsidiaries in low-tax countries; and the laws may have been knowingly written by legislators to benefit narrow interests in exchange for campaign contributions or other benefits. Either way, nobody is asking "What's the best tax policy for the society?"
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Old 8th January 2018, 12:01 AM   #9
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Originally Posted by Beerina View Post
You get your benefit from Apple by buying its advanced and rapidly-upgraded products, not from taxing it.

Say that to yourself 1000 times.

It completely disgusts me little peons are getting angry at the corporations that keep them from having to live in caves gnawing at fleas on their bodies. You are the mindless cogs manipulated by your masters for their own political gain and wealth, which is generated by backing off on laws that harm business in exchange for money, or secret donations, or access to business deals normal mortals don't get.

"We haven't strapped sufficient millstones to that which moves!" they blather to the droolers.

"Authorize me the power to beat the *** out of them and I will make your lives better -- I promise!" they program into the minds of the cogs, to get them to behave in ways that will empower the politician to hurt the corporation in exchange for money from said corporation to not hurt it quite as much.
Hahaha do you repeat that mantra 1000 times every time you get conned into buying Apples latest piece of overpriced rubbish?

How does Apple stop me from living in a cave? You irrationally seem to worship the fruit brand. Expecting them to pay their faor share of tax to contribute to the infrastructure that allows them to design, manufacture and destribute their products is not beating the **** out of them, but then tax avoidance does help them make more money than some nations so they can spend big on shallow marketing that gets lapped up by "the droolers"
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Old 8th January 2018, 02:51 AM   #10
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Originally Posted by This is The End View Post
But it sure as **** can be immoral.
So Apple might be going to hell? Didn't the whole immoral/sin thing start with apples?
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Old 8th January 2018, 03:18 AM   #11
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Originally Posted by fagin View Post
So Apple might be going to hell? Didn't the whole immoral/sin thing start with apples?
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Old 9th January 2018, 01:35 PM   #12
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Originally Posted by Bob001 View Post
Two issues: The relevant laws may have been written decades ago, when corporations largely made money by making and shipping physical products, not transferring patents and licenses to paper subsidiaries in low-tax countries; and the laws may have been knowingly written by legislators to benefit narrow interests in exchange for campaign contributions or other benefits. Either way, nobody is asking "What's the best tax policy for the society?"
To some extent, they are asking "what's best for our society" - the problem being that the tax loopholes are spawned as responses to American tax laws, in an effort to draw money away from the USA taxpayers and into local economies instead.

Technology has advanced and made it easier to move money around to exploit these laws, so it's getting worse. IMO, this is a new problem that national governments are not able to address because of an emerging problem with the beneficiaries also being legislators.

Apple is a large beneficiary to the tune of tens of billions of dollars, but the root cause is that Congressman X personally benefits to in the order of half a million dollars, and the conflict of interest is too tempting. Multiply that by 90% of Congress, and American taxpayers are screwed.
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Old 9th January 2018, 01:51 PM   #13
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The title of this thread keeps reminding me of the TM issues between Apple Computers and Apple Records. [Insert riffs from Beatles song Taxman] But Taxman came out before the formation of Apple Records, so it just doesn't make any sense. Also, Apple Computers would never have anything to do with the music industry, anyway.
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Old 9th January 2018, 04:04 PM   #14
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Originally Posted by Dr. Keith View Post
The title of this thread keeps reminding me of the TM issues between Apple Computers and Apple Records. [Insert riffs from Beatles song Taxman] But Taxman came out before the formation of Apple Records, so it just doesn't make any sense. Also, Apple Computers would never have anything to do with the music industry, anyway.
It's the origin of their alert sound titled "Sosumi"

"Alert sounds. OK, now we're involved in audio. So sue us."
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Old 9th January 2018, 04:09 PM   #15
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Originally Posted by This is The End View Post
But it sure as **** can be immoral.
It's neither illegal nor immoral. As a matter of fact, it's foolish to do otherwise. Which is why no-one ever does otherwise. Just about everyone always tries to pay as little tax as possible. That goes for Warren Buffet, President Obama, Donald Trump and the guy making minimum wage flipping burgers.

We really need a simpler tax code.
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Old 9th January 2018, 05:38 PM   #16
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Originally Posted by sir drinks-a-lot View Post
It's neither illegal nor immoral. As a matter of fact, it's foolish to do otherwise. Which is why no-one ever does otherwise.
Lots of people do otherwise. Probably most people. My corporation does not hire lawyers to use international loopholes to reduce my taxes. Our accountant is often told to avoid skeezy strategies like this. I'm sure he has other, more sociopathic, clients that go for it, though.



Originally Posted by sir drinks-a-lot View Post
Just about everyone always tries to pay as little tax as possible. That goes for Warren Buffet, President Obama, Donald Trump and the guy making minimum wage flipping burgers.

We really need a simpler tax code.
Possibly. It's hard to quantify 'simpler' unfortunately. I'd like to see a fairer tax code, as a higher priority, for example. That may make it more complex (although I doubt it).
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Old 10th January 2018, 06:42 PM   #17
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Originally Posted by blutoski View Post
Lots of people do otherwise. Probably most people. My corporation does not hire lawyers to use international loopholes to reduce my taxes. Our accountant is often told to avoid skeezy strategies like this. I'm sure he has other, more sociopathic, clients that go for it, though.





Possibly. It's hard to quantify 'simpler' unfortunately. I'd like to see a fairer tax code, as a higher priority, for example. That may make it more complex (although I doubt it).
Please explain why this is "skeezy."
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Old 11th January 2018, 05:55 PM   #18
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Originally Posted by BobTheCoward View Post
Please explain why this is "skeezy."
Depends on the strategy involved.

The Double Irish with a Dutch Sandwich involves saying that a random person not associated with the business is, in fact, a principal. Feels like it should be flat out criminal fraud, to me.

Here in Canada, our accountant pitched another one we passed on - family run corporations have a feature that allows special dividends to specific shareowners that are not passed to all shares. eg: mom gets $50k special dividends this year, daughter gets $10k special dividends this year. The idea being that these are proportional reimbursements for labour contrinbuting to the profits, in lieu of invoiceable wages.

We took a pass on this, because the purpose is to remunerate contributions, and I don't actually contribute. It's been used incorrectly as a way for rich folk to pass shunt their income to lower tax brackets, through family, which feels like fraud to me because we have to sign a document saying my contribution is materially worth $X dollars, and it isn't really.

A lot of these procedures aren't about what's actually legal, so much as what's not being enforced well enough, and adding layers of obscurity to avoid flagging the auditors to catch the underlying fraud.
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Old 11th January 2018, 07:40 PM   #19
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Originally Posted by blutoski View Post
Depends on the strategy involved.

The Double Irish with a Dutch Sandwich involves saying that a random person not associated with the business is, in fact, a principal. Feels like it should be flat out criminal fraud, to me.

Here in Canada, our accountant pitched another one we passed on - family run corporations have a feature that allows special dividends to specific shareowners that are not passed to all shares. eg: mom gets $50k special dividends this year, daughter gets $10k special dividends this year. The idea being that these are proportional reimbursements for labour contrinbuting to the profits, in lieu of invoiceable wages.

We took a pass on this, because the purpose is to remunerate contributions, and I don't actually contribute. It's been used incorrectly as a way for rich folk to pass shunt their income to lower tax brackets, through family, which feels like fraud to me because we have to sign a document saying my contribution is materially worth $X dollars, and it isn't really.

A lot of these procedures aren't about what's actually legal, so much as what's not being enforced well enough, and adding layers of obscurity to avoid flagging the auditors to catch the underlying fraud.
I'm still not clear on what makes it skeezy.
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Old 11th January 2018, 08:24 PM   #20
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Originally Posted by BobTheCoward View Post
I'm still not clear on what makes it skeezy.
It's an action that is detrimental to society at large while offering personal gain through adherence to the letter of the law but not it's spirit.
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Old 11th January 2018, 09:00 PM   #21
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Originally Posted by BobTheCoward View Post
I'm still not clear on what makes it skeezy.
Because it creates entirely artificial circumstances and applies the laws to them for private benefit in ways legislators never contemplated.
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Old 11th January 2018, 09:57 PM   #22
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Originally Posted by BobTheCoward View Post
I'm still not clear on what makes it skeezy.
It's like tricking a child into giving you their candy when they didn't want you to have it.
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Old 12th January 2018, 01:09 PM   #23
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Originally Posted by psionl0 View Post
It's like tricking a child into giving you their candy when they didn't want you to have it.
Arguments from analogy always fail, but I do like the image of lawmakers as children too stupid to hang on to their candy.
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Old 12th January 2018, 01:14 PM   #24
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Originally Posted by Hungry81 View Post
Hahaha do you repeat that mantra 1000 times every time you get conned into buying Apples latest piece of overpriced rubbish?

How does Apple stop me from living in a cave? You irrationally seem to worship the fruit brand. Expecting them to pay their faor share of tax to contribute to the infrastructure
Just to stop you there, Apple make their money on tech developed at cost to the public purse. Lots of what Apple uses, I understand, was NASA developed.

Quote:
that allows them to design, manufacture and destribute their products is not beating the **** out of them, but then tax avoidance does help them make more money than some nations so they can spend big on shallow marketing that gets lapped up by "the droolers"
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Old 12th January 2018, 01:16 PM   #25
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Originally Posted by sir drinks-a-lot View Post
It's neither illegal nor immoral. As a matter of fact, it's foolish to do otherwise. Which is why no-one ever does otherwise. Just about everyone always tries to pay as little tax as possible. That goes for Warren Buffet, President Obama, Donald Trump and the guy making minimum wage flipping burgers.

We really need a simpler tax code.
Just need to reserve the job of tax accountant as a government position only. The only question one can ask of one's tax accountant is 'how much tax do I owe?' The question "How can I pay less tax" would not be allowed.
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Old 12th January 2018, 01:22 PM   #26
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Originally Posted by BobTheCoward View Post
I'm still not clear on what makes it skeezy.
Yep. People have different morals. My belief that lying is skeezy doesn't make lying objectively skeezy. I appreciate that there are tons of people who are fine with lying for money.

It's one of the key arguments that we can't expect corporations to behave ethically - they are amoral machines. It is what it is.
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Old 12th January 2018, 01:34 PM   #27
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Originally Posted by BobTheCoward View Post
Please explain why this is "skeezy."
A corporation that makes a huge amount of money in a country they're doing business in and have a large presence in, pretending that they have to pay some made up charge that 'coincidentally' matches the profit they'd otherwise have to pay tax on, to an office in a different country with lower tax rates, that has just one employee who's clearly only there to collect that made up charge is pretty skeezy.

On a related note, I always buy my coffee from Costa rather than Starbucks. Costa pay all their tax without a murmur and still run a successful business.

Now, if only there was some viable alternative to Amazon...
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Old 12th January 2018, 02:00 PM   #28
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Originally Posted by theprestige View Post
Arguments from analogy always fail, but I do like the image of lawmakers as children too stupid to hang on to their candy.
No, no, legislators are remarkably skillful at hanging on to their candy, in the form of lobbying expenses and campaign contributions.
https://www.macrumors.com/2017/07/21...ing-trump-gov/
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Old 12th January 2018, 02:51 PM   #29
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Originally Posted by blutoski View Post
Depends on the strategy involved.

The Double Irish with a Dutch Sandwich involves saying that a random person not associated with the business is, in fact, a principal. Feels like it should be flat out criminal fraud, to me.

Here in Canada, our accountant pitched another one we passed on - family run corporations have a feature that allows special dividends to specific shareowners that are not passed to all shares. eg: mom gets $50k special dividends this year, daughter gets $10k special dividends this year. The idea being that these are proportional reimbursements for labour contrinbuting to the profits, in lieu of invoiceable wages.

We took a pass on this, because the purpose is to remunerate contributions, and I don't actually contribute. It's been used incorrectly as a way for rich folk to pass shunt their income to lower tax brackets, through family, which feels like fraud to me because we have to sign a document saying my contribution is materially worth $X dollars, and it isn't really.

A lot of these procedures aren't about what's actually legal, so much as what's not being enforced well enough, and adding layers of obscurity to avoid flagging the auditors to catch the underlying fraud.
I just remembered another one. About a decade ago, some accountant realized that the tax category known as Income Trusts were not well audited. Meaning: a company that wasn't really an Income Trust could declare itself one for the tax benefits, and auditors weren't investigating to see if the company actually operated that way. So suddenly, doctors were saying they were Income Trusts, banks were saying they were Income Trusts, &c.

Just to explain what an Income Trust is: it's a business based on a diminishing asset. For example, my family has an Income Trust company to manage the natural gas royalties on our property in Lethbridge AB. Someday that gas will be gone, so it's taxed differently than other business categories.

It's really clear that a doctor isn't an Income Trust, but thousands of them took their accountant's advice and reclassified. It took awhile for CRA to start cracking down, and there was pushback from the corporations, saying it's "not fair that the government is starting to actually *require* something that, well, ok, they said was required, but c'mon, it's all wink-wink, right?"
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Old 12th January 2018, 04:05 PM   #30
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Originally Posted by 3point14 View Post
Just need to reserve the job of tax accountant as a government position only. The only question one can ask of one's tax accountant is 'how much tax do I owe?' The question "How can I pay less tax" would not be allowed.
That's not too different from the current system. Even a government accountant would have to apply current laws. The taxpayer can make any argument he wants, but the IRS decides how much you really owe, and if there's a disagreement it goes to tax court. The real issue is the complexity of the tax code. Other countries have simpler systems with fewer deductions, credits and exclusions. And the dramatic cutbacks in IRS staff and budget mean that outrageous claims are much less likely to be challenged because far fewer returns can be audited.
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Old 12th January 2018, 04:21 PM   #31
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Originally Posted by Bob001 View Post
That's not too different from the current system. Even a government accountant would have to apply current laws. The taxpayer can make any argument he wants, but the IRS decides how much you really owe, and if there's a disagreement it goes to tax court. The real issue is the complexity of the tax code. Other countries have simpler systems with fewer deductions, credits and exclusions. And the dramatic cutbacks in IRS staff and budget mean that outrageous claims are much less likely to be challenged because far fewer returns can be audited.
I think the value of the accountant isn't that he figures out how much you owe, but rather, he restructures what you are as a legal entity, and how the money moves around. Basically tells you what 'you' could mean, what's the 'you' being taxed exactly.

Just as an example, my wife could just get the health authority to write her cheques directly, it would be taxed as personal income. And then get insurance, invest in retirement nestegg, buy her supplies, pay the mortgage and household expenses, all from the after tax earnings.

Or... maybe she's a business? In which case set up a corporation, and the health authority writes cheques to the corporation, and she builds herself an employee pension, the company pays for insurance, expenses supplies, and a portion of the household for home office... all untaxed. And what she needs for personal day to day, she writes from the corporation to herself as an employee, expenses it from the corporation (no tax) but pays personal income tax on it.

The accountant's value is to see what 'stories' and legal structures have the least tax exposure and pitch them to the client.

There's a change in Canadian corporate taxation rules (ending illegitimate income sprinkling) as of Jan 1st, and our accountant sent us a document with 5 restructuring options, their pros and cons, and his recommendation about which was best.
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Old 12th January 2018, 05:04 PM   #32
BobTheCoward
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Originally Posted by Ethan Thane Athen View Post
A corporation that makes a huge amount of money in a country they're doing business in and have a large presence in, pretending that they have to pay some made up charge that 'coincidentally' matches the profit they'd otherwise have to pay tax on, to an office in a different country with lower tax rates, that has just one employee who's clearly only there to collect that made up charge is pretty skeezy.

On a related note, I always buy my coffee from Costa rather than Starbucks. Costa pay all their tax without a murmur and still run a successful business.

Now, if only there was some viable alternative to Amazon...
You just described their action and called it skeezy. I know what they do and I know people are using that word. My question is why is it that word.
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Old 12th January 2018, 05:51 PM   #33
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Originally Posted by BobTheCoward View Post
You just described their action and called it skeezy. I know what they do and I know people are using that word. My question is why is it that word.
You had several reasons for the use of word given in this thread and you addressed none of them.

Pretending that answers don't exist and repeating a question is a dumb trick and it is practised too often in this forum.
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Old 12th January 2018, 05:53 PM   #34
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Originally Posted by psionl0 View Post
You had several reasons for the use of word given in this thread and you addressed none of them.

Pretending that answers don't exist and repeating a question is a dumb trick and it is practised too often in this forum.
I just reread the relevant posts. I didn't see any reasons.
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Old 12th January 2018, 07:24 PM   #35
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Originally Posted by BobTheCoward View Post
I just reread the relevant posts. I didn't see any reasons.
April 2nd, 1801. ‘I see no ships’: Horatio Nelson turns a blind eye at the Battle of Copenhagen
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Old 12th January 2018, 07:26 PM   #36
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Originally Posted by psionl0 View Post
Point to a post that included an explanation.
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Old 13th January 2018, 12:09 AM   #37
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Originally Posted by BobTheCoward View Post
Point to a post that included an explanation.
How about post #20?

Though I liked psion's analogy, I thought it was quite clear.

Perhaps the issue is that you don't understand what skeezy means?
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Old 13th January 2018, 01:08 AM   #38
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Originally Posted by sir drinks-a-lot View Post
It's neither illegal nor immoral. As a matter of fact, it's foolish to do otherwise. Which is why no-one ever does otherwise. Just about everyone always tries to pay as little tax as possible. That goes for Warren Buffet, President Obama, Donald Trump and the guy making minimum wage flipping burgers.

We really need a simpler tax code.
When it comes to international shenanigans as described in the o/p and other posts it would seem to require international cooperation, and when individual countries gain by having profits not earned in those countries shifted to their administrations there's not much incentive.

"Deemed corporation tax"? Assess the profits made by a corporation through their trade in your country, allow reasonable deductions for expenses (such as R+D) incurred abroad and calculate corporation tax on the result. Would any country dare try it though?
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Old 13th January 2018, 05:46 AM   #39
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Originally Posted by Roboramma View Post
How about post #20?

Though I liked psion's analogy, I thought it was quite clear.

Perhaps the issue is that you don't understand what skeezy means?
Post 20 I would hope would include why it is detrimental, why it is against the spirit, and actually relate it to the concept of skeezy rather than leave it unstated.

It seems like any explanation of why would include the definition being used.

I was looking for a treatise.

ETA: I accept the assumption that it is against the spirit and detrimental. Why is that skeezy?

Last edited by BobTheCoward; 13th January 2018 at 05:57 AM.
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Old 13th January 2018, 06:23 AM   #40
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Originally Posted by BobTheCoward View Post
Post 20 I would hope would include why it is detrimental, why it is against the spirit, and actually relate it to the concept of skeezy rather than leave it unstated.

It seems like any explanation of why would include the definition being used.

I was looking for a treatise.

ETA: I accept the assumption that it is against the spirit and detrimental. Why is that skeezy?
Let me provide a definition. The best I can find is that is a combination of skeevy and sleezy. The definitions of those are things like, contemptibly low, mean, or disreputable: not respectable; immoral.slovenly and disgusting; repulsive.

Why is detrimental and against the spirit those things?
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