Apple's €13b tax money

Cee-Jay-Cee

The government has awarded three companies contracts to look after the €13b tax money from apple to ensure the vast pot doesn’t lose value in the meantime, because taxpayers would then be on the hook for any losses.

No doubt those awarded the contract will be paid millions for their work but what I don't get is why they don't simply lodge it in a savings account at a low interest rate until the matter is decided, that way it costs very little, the tax payer is not at risk and we don't loose millions paying companies to manage the money which to me suggests investing it in the effort to make more money which seems an odd thing to do when you consider Ireland is appealing the matter and if they are successful will be handing the money back to Apple, no doubt with interest included.

So why isn't the money simply put in some form of escrow account until the appeal is over? Why waste tax payers money managing it in the meantime?

https://www.independent.ie/business/government-awards-contract-to-look-after-13bn-apple-tax-money-to-trio-of-investment-firms-36736777.html

dr.fuzzenstein

And they will still manage to lose their shirt over mis-investment, probably because a "highly skilled consultant" (someone's nephew who got the gig on pull) invested it in Bitcoins.

Allinall

Would you trust a bank with €13 billion ?

Assetbacked

And yet we still operate government policy which allows companies structure their affairs where 13 billion in tax cannot be paid. It should not be allowed that a company can accumulate so much money. There should be a cap on wealth, particularly in company wealth. The system we find ourselves in is pushing all of the wealth to the top, meanwhile the middle classes are being made poorer. Trump and Brexit are not anomalies nor are they unreasonable; they demonstrate a voter population frustrated with the current economic system and seeking to vent and protest via the ballot box.

Guy:Incognito

Stick it somewhere with a .5% rate. What's that, 65m a year?

Pick a pps number every week and that person gets 1m. The extra 13m can be used to have double draws at Christmas etc. Once you win your pps number comes off the list.

Franz Von Peppercorn

Assetbacked wrote: »

And yet we still operate government policy which allows companies structure their affairs where 13 billion in tax cannot be paid. It should not be allowed that a company can accumulate so much money. There should be a cap on wealth, particularly in company wealth. The system we find ourselves in is pushing all of the wealth to the top, meanwhile the middle classes are being made poorer. Trump and Brexit are not anomalies nor are they unreasonable; they demonstrate a voter population frustrated with the current economic system and seeking to vent and protest via the ballot box.

Company wealth is the least worst sort of wealth, provided it is reinvested.

valoren

Here's a wild idea, why not just buy $16 billion worth of Apple stock. With it's current market cap of $854 billion, the consensus is that it won't be long until it reaches a Trillion. And the government would be looking at a return if/when this happens of 17% so an additional €2.7 billion excluding the dividends which would currently be $240 million a year before tax.

Assetbacked

Franz Von Peppercorn wrote: »

Company wealth is the least worst sort of wealth, provided it is reinvested.

Reinvested in the company? Why should Apple have 100+ billion sitting in the bank rather than there being a few thousand more millionaires? Is that not capitalism?

Guy:Incognito

Assetbacked wrote: »

Reinvested in the company? Why should Apple have 100+ billion sitting in the bank rather than there being a few thousand more millionaires? Is that not capitalism?

What have those few thousand done to deserve it? Apple built a company . They make a sell a product. Why should they not get the profits of That?

BrokenArrows

Assetbacked wrote: »

Reinvested in the company? Why should Apple have 100+ billion sitting in the bank rather than there being a few thousand more millionaires? Is that not capitalism?

Because they earned it and can do whatever they want with the cash.

They are smart having that much in the bank. It shields them from having a bad some for quite a few years which also protects it's many many employees.

Specialun

yeah put in the the bank..no way anything could go wrong there

dr.fuzzenstein

Allinall wrote: »

Would you trust a bank with €13 billion ?

Specialun wrote: »

yeah put in the the bank..no way anything could go wrong there

Absolutely not. Come with me, I know an off license that will cash the check. We'll stick it under the mattress.

kneemos

Thought it was just pixels on a screen. Why does it need managing?

May be a stupid question,but hey I just don't care.

Colonel Claptrap

OP the account you are describing does not exist for such a large sum of money.

The government can't simply stroll down to the local bank and open an account.

First off, to stick such a large amount into a single deposit account would be reckless. If that bank went tiits up and couldn't return depositor's cash can you imagine the political fallout? The sum must be split up and segregated across multiple accounts to spread the risk.

Secondly, 3 fund managers were tendered so as to appear open and fair. If a junior minister for the gaeltacht happened to be married to a board member of the winning investment crowd, no doubt there would be outrage. Ireland, as an EU member state cannot show unfair bias towards one service provider.

Thirdly, interest rates are negative. If you stuck 10m in an overnight deposit account the bank would charge you for it. You wouldn't earn interest. Imagine how much they'd charge each day for 13bn... that would be literally throwing taxpayer money away. The 3 fund managers will invest in a few dozen low interest, low risk liquid assets such as short term bonds. Their mandate will be to beat inflation and nothing more. These accounts will barely be profitable. They are known as money market funds.

Seth Brundle

Assetbacked wrote: »

And yet we still operate government policy which allows companies structure their affairs where 13 billion in tax cannot be paid.

I don't think anyone has said that it cannot be paid. All the Irish government have been saying is that it isn't payable here but is payable in the countries of origin.

Assetbacked wrote: »

It should not be allowed that a company can accumulate so much money. There should be a cap on wealth, particularly in company wealth.

What is the maximum amount a company should be allowed earn?

Cee-Jay-Cee

Colonel Claptrap wrote: »

OP the account you are describing does not exist for such a large sum of money.

The government can't simply stroll down to the local bank and open an account.

First off, to stick such a large amount into a single deposit account would be reckless. If that bank went tiits up and couldnt return depositor's cash can you imagine the political fallout? The sum must be split up and segregated across multiple accounts to spread the risk.

Secondly, 3 fund managers were tendered so as to appear open and fair. If a junior minister for the gaelteacht happened to be married to a board member of the winning investment crowd, no doubt there would be outrage. Ireland, as an EU member state cannot show unfair bias towards one service provider.

Thirdly, interest rates are negative. If you stuck 10m in an overnight deposit account the bank would charge you for it. You wouldn't earn interest. Imagine how much they'd charge each day for 13bn... that would be literally throwing taxpayer money away. The 3 fund managers will invest in a few dozen low interest, low risk liquid assets such as short term bonds. Their mandate will be to beat inflation and nothing more. These accounts will barely be profitable. They are known as money market funds.

Thank you for explaining that. Makes a bit more sense now.

Capt'n Midnight

Guy:Incognito wrote: »

Stick it somewhere with a .5% rate. What's that, 65m a year?.

They'd get a much better return investing in Irish Government Bonds

Just as long as they don't default and burn the bondholders.

Assetbacked

Guy:Incognito wrote: »

What have those few thousand done to deserve it? Apple built a company . They make a sell a product. Why should they not get the profits of That?

Haha. Apple having so much money means a few thousand more people cannot become millionaires. The wealth is getting pushed to the top more and more. Sure, you can say the companies and people deserve it but it is the system that is broken and not caused by those who have already made it to the top. The the way it is going the 1% is getting smaller and there is a real risk that more and more people with decent jobs end up in poverty, requiring more state assistance which results in higher taxes for those that are working which leads to them eventually requiring state assistance. It is sickening. But it is also not sustainable so rather than letting it happen, steps should be taken to prevent it.

Franz Von Peppercorn

What few thousand are we talking about.

WoollyRedHat

Should send one of lads on a junket to Vegas, put it on the fruit machines and Black Jack,

Assetbacked

BrokenArrows wrote: »

Because they earned it and can do whatever they want with the cash.

They are smart having that much in the bank. It shields them from having a bad some for quite a few years which also protects it's many many employees.

How is it fair that a company pays zero tax while millions of people pay so much tax? Are we not all part of the same society? A company, being a separate legal personality to a person, does not starve if it doesn’t make money; real people do. 50% tax on our salaries in Ireland combined with a housing crisis where rent hoovers up anywhere up to 50% of the remaining average salary (and possibly more than that), means that a lot of people in our very country are feeling poor.

Assetbacked

Franz Von Peppercorn wrote: »

What few thousand are we talking about.

More money in people’s pockets leads to them having greater opportunities to take advantage of the capitalist system and create more wealth for themselves by investing it, creating a business etc. allowing companies and people amass billions themselves prevents this.

Assetbacked

kbannon wrote: »

What is the maximum amount a company should be allowed earn?

Earn unlimited amounts but tax higher and higher the more that is earned; this would enable the majority of people pay less tax and get richer themselves.

Seth Brundle

WoollyRedHat wrote: »

Should send one of lads on a junket to Vegas, put it on the fruit machines and Black Jack,

...and yet still safer than what they were doing in Anglo!

Seth Brundle

Assetbacked wrote: »

Earn unlimited amounts but tax higher and higher the more that is earned; this would enable the majority of people pay less tax and get richer themselves.

Not the best policy to encourage investment though?

professore

Assetbacked wrote: »

How is it fair that a company pays zero tax while millions of people pay so much tax? Are we not all part of the same society? A company, being a separate legal personality to a person, does not starve if it doesn’t make money; real people do. 50% tax on our salaries in Ireland combined with a housing crisis where rent hoovers up anywhere up to 50% of the remaining average salary (and possibly more than that), means that a lot of people in our very country are feeling poor.

Because anyone working for that company including directors pay 50% if they want to spend that money on themselves. If they want to put money aside for next year to pay salaries, buy machinery etc they pay 12.5% on that. These high profile cases like apple are the exception.

Franz Von Peppercorn

Assetbacked wrote: »

More money in people’s pockets leads to them having greater opportunities to take advantage of the capitalist system and create more wealth for themselves by investing it, creating a business etc. allowing companies and people amass billions themselves prevents this.

I said it would be better invested by the company not stored.

Or paid out in wages.

Colonel Claptrap

Assetbacked wrote: »

Earn unlimited amounts but tax higher and higher the more that is earned; this would enable the majority of people pay less tax and get richer themselves.

If i run a company that gets taxed higher and higher the more it earns why would i bother expanding, taking risks, hiring more staff or acquiring similar companies to promote efficiency and synergies?

What you are suggesting encourages tax avoidance, which is exactly what you came into this thread rallying against.

StupidLikeAFox

WoollyRedHat wrote: »

Should send one of lads on a junket to Vegas, put it on the fruit machines and Black Jack,

We could turn it into a reality show. Live feeds of the cabinet debating whether we should put it on red or black. Vogue Williams could present the after show.

c.p.w.g.w

StupidLikeAFox wrote: »

We could turn it into a reality show. Live feeds of the cabinet debating whether we should put it on red or black. Vogue Williams could present the after show.

Vogue is up the duff, so probably not interested until to kid drops...Reckon Ryan Tubridy could do it, sure his the nations darling:D

Capt'n Midnight

Assetbacked wrote: »

How is it fair that a company pays zero tax while millions of people pay so much tax?

This is the main competitive advantage places like Starbucks have over local coffee shops that can't afford accounts that can find the loopholes the multinationals use.


If a government could make it very clear that if they can't get the company they'd go after the shareholders by taxing their gains as income things might be different.

OldMrBrennan83

This post has been deleted.

Colonel Claptrap

Patww79 wrote: »

Didn't realise they caved and took the $13bn after. That'll bode well for jobs...

They didn't.

It's still under appeal. That's why the money is in escrow.