Michael Hennigan: The Finfacts economics site was launched in 1997. Average monthly page views of this blog are at 80,000.
A short film The Price of Certainty, by a Jewish survivor of wartime Poland:
If you have high “need for closure,” you tend to make decisions quickly and see the world in black and white. If you have a low need for closure, you tolerate ambiguity, but often have difficulty making decisions. All of us fall naturally somewhere on this spectrum.
http://www.nytimes.com/2016/11/01/opinion/the-price-of-certainty.html
It's not a recent development for tax offices to look behind sham/artificial structures in dissecting schemes to reduce tax. In recent years the abuse in the CT area has also focused on sham arrangements.
The House of Commons Public Accounts Committee in 2013 rejected Google's argument that sales of corporate advertising were completed and thus invoiced in Dublin as Google UK staff only partially handled sales issues with clients — "an argument which we find deeply unconvincing on the basis of evidence"; "Google has also conceded that its engineers in the UK are contributing to product development and creating economic value in the UK"; "HMRC needs to be much more effective in challenging the artificial corporate structures created by multinationals with no other purpose than to avoid tax."
It's not a recent development for tax offices to look behind sham/artificial structures in dissecting schemes to reduce tax. In recent years the abuse in the CT area has also focused on sham arrangements.
The House of Commons Public Accounts Committee in 2013 rejected Google's argument that sales of corporate advertising were completed and thus invoiced in Dublin as Google UK staff only partially handled sales issues with clients — "an argument which we find deeply unconvincing on the basis of evidence"; "Google has also conceded that its engineers in the UK are contributing to product development and creating economic value in the UK"; "HMRC needs to be much more effective in challenging the artificial corporate structures created by multinationals with no other purpose than to avoid tax."
Edward Kleinbard, professor of law and business at the University of Southern California, is a former chief of staff of the US Congress's Joint Committee on Taxation, and he testified at the US Senate hearings on Apple in May 2013. Prof Kleinbard wrote this week on The European Commission ruling that Ireland provided Apple with illegal state aid:
Tax here was just the instrument for delivering state aid. The US Treasury is expert in detecting tax shams used to disadvantage US tax collections, and should have recognized that the EC similarly is making a sham arrangement argument.
Kleinbard says Jack Lew, US Treasury secretary, and Apple are wrong when they argue that only the Internal Revenue Service has a legitimate claim to Apple’s $230bn in largely untaxed offshore cash, technically in Irish offshore shell companies but actually in the United States. "This is a misstatement of US law."
Apple says 65% of its earnings are foreign-related but it also contradicts itself by saying most profits are generated in the US. However, the the profits it books overseas puts overseas tax offices other than the IRS ahead in the taxing queue. Apple settled a tax fraud case last year with Italy and there are more to come.
For nearly 100 years the nation has followed the principle that the jurisdiction in which income arises (the “source jurisdiction”) has priority in taxing cross-border income. To prevent double taxation, a US company can claim a credit against its US tax bill for levies already paid to source countries. So US tax on a dividend repatriation is a residual liability of the company, payable only to the extent that source countries have not first taxed the income.
Kleinbard says the United States aids and abets US multinationals in their stateless income tax gaming, whose object is to skim profits from countries where income actually is earned, and then to deposit those profits in a zero or near zero tax receptacle. That is the source of Apple’s offshore cash hoard totaling more than $200 billion.
Distilling the facts to their essence, in Europe, Apple has deployed the almost farcical charade that its income from retail sales in Germany, for example, really is earned by an Irish subsidiary that hovers just beyond the German border, doing all the value-added work to offer Apple products to German retail customers, but never quite putting a foot down in Germany.For the United States, the game is different, but just as artificial. Apple’s plan, authorized in broad outline by IRS regulations, was to create an Irish subsidiary, stuff it with seed money, and to pretend that the subsidiary had its own independent business agenda. Apple Cupertino and Apple Ireland then entered into an “arm’s length cost sharing agreement” of the sort that two independent drug companies might employ to jointly develop a new drug.
The Irish shell companies were available to Apple for massive tax avoidance with reported sales in several countries artificially suppressed. The EC views the structure as a sham and it's unlikely that it was commonly available to other companies.
What makes this a state aid case rather than a tax one is that there is no plausible explanation for Ireland ceding its tax authority other than its understanding that jobs would follow. The parties reverse engineered a methodology to yield an agreed minimal tax take.
Edward Kleinbard: Apple’s Ireland tax avoidance should spur major reforms
Fortune magazine: Nearly 50,000 people have signed two petitions calling on the US Treasury Department to launch an investigation into Apple’s tax practices.
Finfacts:
Apple's stateless firm tax claims likely broke Irish law
Apple's tax woes as Irish conventional wisdom fails again
Ireland's Apple tax appeal to European court likely to fail
EU vs Apple: Ireland's €13bn tax windfall will be shared
How Apple found a bigger tax loophole than the Double Irish
The fable of the frog and Ireland's response to Brexit
Apple's foreign tax rate fell from 12 to 2% in a decade
Top 10% rich world incomes up 40% in 20 years as growth slowed
Italy's lost decades but average Irish standard of living lower
The question for markets after the referendum was whether the UK’s Brexit decision would result in a short, sharp shock or a more fundamental re-set. One month on, uncertainty persists. The FT’s senior investment columnist John Authers assesses sentiment.
Talking Trade: The FT’s Sebastian Payne rounds up the week’s Brexit news, including International Trade Secretary Liam Fox’s first foray into diplomacy and Prime Minister Theresa May’s visit to Rome.
Lionel Barber, FT editor, and Janan Ganesh, political commentator, discuss how the UK’s three Brexit ministers — Boris Johnson, Liam Fox and David Davis — plan to negotiate exit from the EU, and how they will work
Ed Luce of the FT talks to political commentator EJ Dionne about how the Republican party has been transformed in recent years and how the rise of Donald Trump is changing conservative politics.
China’s economic miracle is under threat from a slowing economy.
A dwindling labour force and turbulent stock market are adding to the country’s woes.
The FT investigates how the world’s most populous country has reached a critical chapter in its history. Jamil Anderlini narrates.
Will the End of the Chinese Miracle Bring Down Southeast Asia? — Knowledge @Wharton
On April 14, 2016, the John L. Thornton China Center and the Hutchins
Center on Fiscal and Monetary Policy at Brookings hosted a discussion examining
challenges and opportunities facing the Chinese economy, as well as the
financial and economic links between China and the world. Ben Bernanke, former
Federal Reserve chairman, joins later in the discussion.
Ten years ago the Irish Times' Thursday property supplement typically comprised 60 pages — mostly of advertising at €10,000 to €15,000 per page and puff pieces on expensive properties.
We first published this article in 2006 when property porn was at its height in Ireland:
In 2005, the Collins English Dictionary defined property porn as "a genre of escapist TV programmes, magazine features, etc showing desirable properties for sale, especially those in idyllic locations, or in need of renovation, or both."
Ever seen the nauseating 'Lifestyles of the Rich and Famous' American television series that ended each episode with the grovelling host using the catch phrase "champagne wishes and caviar dreams"?
Ten years later after bubble and bust, The Irish Times newspaper is back in full flight with fawning editorial on expensive properties.
Today the main feature is titled 'Riverdance duo’s Howth home for €9.5m' with a strapline 'Moya Doherty and John McColgan, are downsizing. Their 9,000sq ft home is on the market (picture above).
Madeleine Lyons, property editor and special reports editor of The Irish Times, writes:
What’s prophetic is that the site they chose was one of the finest in the capital, and has only been enhanced since. This is reflected in the €9.5 million minimum asking price through Ganly Walters. Danes Hollow will be one of the best properties to come on the market in Dublin this year.
With further elegant homes in London, Manhattan and Martha’s Vineyard, Danes Hollow might be just another part of the couple’s portfolio, but it has that something special.As the agent puts it: “Whoever buys this property doesn’t even know that they want it. It’s when they see it for the first time that they will know.”
What is part of the property porn genre is the bullshit or exaggerated lexicon of the property industry: so the couple of course have "elegant homes in London, Manhattan and Martha’s Vineyard" but because a place is expensive doesn't mean its elegant!
Property porn typically gives a reason why the property is put on the market and in the past The Irish Times has used "downsizing' as a reason when in fact the vendors were trying to settle bank claims — I'm not suggesting that this is relevant is this case but the fact is that the content is advertorial not objective information.
There are other properties of the rich/ well off that are featured today. Note again the bullshit lexicon used by the freelance writers.
Fishing rights and island included in Co Cork for €3.5m — A sensitive renovation and makeover, costing €2 million, makes this Georgian gem, on the banks of the Blackwater in Fermoy, one of the best of its type in Ireland
Modern drama with rural charm for €2.8m — This Co Meath house near Collon has been tastefully rebuilt and offers plenty of period features, while the extensive grounds are perfect if you – or your horse – like a bit of space
Edwardian elegance in Killiney for €2.8m — Extended in 1990, Steeplewood is a detached period house on beautiful gardens
Smart mix of old and new in Dalkey for €1.95m — Spacious home on Sorrento Road has new enclosed patio area at front of house
Donnybrook five-bed with oodles of potential for €1.4m — Bring your architect with you when you go along to view this one
Show-stopping gardens and seclusion on Sorrento Road for €1.35m — Secluded three-bedroom property with gardens as outstanding feature
A redesigned upside-down mews in Ballsbridge for €950,000 — Delightful town garden with giant ferns and evergreens, raised patio and spot lighting
Donald Trump, US presidential candidate, has put a range of price tags on the wall he wants to build on the 2,000-mile border with Mexico. It would be 1,000 miles long, made of precast concrete slabs, rising 35 to 40 feet in the air.
John Oliver, the British presenter of Last Week Tonight, a US comic news show, says Trump’s estimates of the cost range from $4bn, $6bn, $7bn, $10bn and $12bn. Estimating the cost of the wall based in part on a piece by Glenn Kessler of The Washington Post, Oliver concluded that the wall would actually cost “conservatively” $25bn.
A documentary on how a street dealer can rise to drug cartel lord with relative ease. 'How to Make Money Selling Drugs' is an insider's guide to the violent but extremely US lucrative drug industry. Told from the perspective of former drug dealers, and featuring interviews with 50 Cent, Eminem, Russell Simmons, Susan Sarandon, and David Simon (creator of The Wire).
The film gives you the lessons you need to start your own drug empire while exposing the corruption behind the war on drugs.
Finfacts 2015: Disastrous War on Drugs and ignoring the evidence
Finfacts Blog 2015: What happened when Portugal decriminalised drugs — Overdose deaths fell to lowest in Europe
The Economist wrote in June 2015:
WITH less than 5% of the world’s population, the United States holds roughly a quarter of its prisoners: more than 2.3m people, including 1.6m in state and federal prisons and over 700,000 in local jails and immigration pens. Per head, the incarceration rate in the land of the free has risen seven-fold since the 1970s, and is now five times Britain’s, nine times Germany’s and 14 times Japan’s. At any one time, one American adult in 35 is in prison, on parole or on probation. A third of African-American men can expect to be locked up at some point, and one in nine black children has a parent behind bars. [ ]
Reducing the prison population to European levels is probably impossible, for America is still a much more violent place, even if most districts are reasonably safe. There are roughly 165,000 murderers in American state prisons and 160,000 rapists. If America were to release every single prisoner who has not been convicted of killing or raping someone, its incarceration rate would still be higher than Germany’s.
In this episode of My City, the FT’s Bangkok regional correspondent Michael Peel takes a closer look at the Thai capital. He meets outspoken critics of the ruling junta and those trying to help the country’s most vulnerable.