Thoughts on "Thoughts and Prayers"

There has been significant adverse reaction from some quarters to politicians stating that their "thoughts and prayers" are with the people of Parkland, Florida.  They have been accused of dodging responsibility to do something to prevent events of this sort from happening by hiding behind pious words.

But what if instead of denigrating this approach, we were to react positively and apply it to other situations?

As an alternative to passing a tax cut and reducing spending on the average citizen, we could tell the affluent and big corporations that our "thoughts and prayers are with them" and do nothing more.  

Stunning Revelations of Apparent Corruption in Ukraine

Imagine How Shocked He'd Be by Corruption in Ukraine

On 31 October The Guardian reported “Ukraine stunned as vast cash reserves of political elite are made public”.

Two years after angry Ukrainians deposed Viktor Yanukovych and broke into his vast, opulent residential compound outside Kiev, revelations thrown up by a new system that requires government officials to declare their wealth and property online have led many to suspect the new elite are no better.

Cash hoards, collections of expensive watches, a Faberge egg or two, a Nazi SS dagger (what sort of Eastern European politician has Nazi souvenirs – oh, sorry this is Ukraine), a church, lists of offshore companies.  And laughable declarations by some politicians that they were living off their government salaries.

AA was stunned as well though for a different reason. 

It’s almost as if The Guardian published the article “Ukraine stunned as sun rises in East”.

Corruption in Ukraine is as commonplace as rain in London or the sun rising in the East. 

It is the one policy that the “pro-Western” and pro-Russian politicians in the country agree on, though of course they remain in sharp competition over the spoils of depredation of the country.  Both share an apparently unbounded kleptocratic avarice that exceeds the usual “beak wetting” by elites.  An avarice that destroys the wealth of the country and inhibits development.      

Given the damage that the previous “pro-Western” Orange government visited upon the country– the wrecking of an already fragile banking system and the sweetheart deal given to Gazprom by the braided hair lady—are Ukrainians really stunned by corruption among the current crop of self-proclaimed pro-Western politicians? 

AA is stunned.

EU Commission Irish Tax Ruling in Re Apple: Tim Cook and Abu Arqala Outraged

AA is Paying Attention.  Are You?

This Tuesday the EU leveled some pretty serious allegations against both Ireland and Apple regarding Irish tax treatment of two Apple subsidiaries. 

Tim Cook, Apple's CEO, is outraged.  With just nineteen eloquent words he both defended Apple's reputation and demolished the EU's apparently baseless allegations. More here.

“When you’re accused of doing something that is so foreign to your values, it brings out outrage in you.”

I've boldfaced a few words above to highlight what I think is the central point in Tim's argument. 

Values!  Values, indeed. 

Where would we all be if people and corporations didn't have values? It isn't and shouldn't be "all about the Benjamins."  There are some principles or values that should guide our lives as individuals and corporations. Character informs the values chosen. And actions more than words demonstrate both character and values. 

That being said, sometimes things are "foreign to one's values".  In AA's experience often when they are foreign (cross-border).

Frankly, since learning about the EU's no doubt intemperate ruling, I've been so outraged that I haven't been able to post. 

But today I'm calm enough to go on record in joining Tim in his outrage, or perhaps, more precisely in outrage.  

In the interest of fairness and to show you how the EU has apparently overstepped the bounds of common sense as well as the sovereignty of Ireland, let's give voice to the EU's allegations.  After reading them, I'm sure you will be as outraged as AA and equally comforted by Tim's eloquence! I've added boldface to some of the text below to highlight the EU's no doubt spurious reasoning and overreach.

"Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."

In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple's decision to record all sales in Ireland rather than in the countries where the products were sold. This structure is however outside the remit of EU state aid control. If other countries were to require Apple to pay more tax on profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland

The two tax rulings issued by Ireland concerned the internal allocation of these profits within Apple Sales International (rather than the wider set-up of Apple's sales operations in Europe). Specifically, they endorsed a split of the profits for tax purposes in Ireland: Under the agreed method, most profits were internally allocated away from Ireland to a "head office" within Apple Sales International. This "head office" was not based in any country and did not have any employees or own premises. Its activities consisted solely of occasional board meetings. Only a fraction of the profits of Apple Sales International were allocated to its Irish branch and subject to tax in Ireland. The remaining vast majority of profits were allocated to the "head office", where they remained untaxed 

Therefore, only a small percentage of Apple Sales International's profits were taxed in Ireland, and the rest was taxed nowhere. In 2011, for example (according to figures released at US Senate public hearings), Apple Sales International recorded profits of US$ 22 billion (c.a. €16 billion[1]) but under the terms of the tax ruling only around €50 million were considered taxable in Ireland, leaving €15.95 billion of profits untaxed. As a result, Apple Sales International b. In subsequent years, Apple Sales International's recorded profits continued to increase but the profits considered taxable in Ireland under the terms of the tax ruling did not. Thus this effective tax rate decreased further to only 0.005% in 2014.

 The EU has prepared an "infographic" which provides a summary overview of the tax structure.

I trust you share my outrage and Tim's too.