Thursday, April 30, 2015

Apple's success is a target for extortion.

You may have read that the European Union, the EU, has launched an investigation into Ireland's tax policies. The belief is that Apple has benefited from Ireland's tax policies to the detriment of other members of the EU. If the EU determines that the polices are "unfair" then Apple may be liable for up to ten years of back taxes.

Simply put,  this is government extortion.

Apple is the victim in this investigation not Ireland. There are dozens of American companies with operations in Ireland, but Apple is the largest tax target because, you guessed it, Apple has the most cash. For me, this investigation is flat out extortion and to make a determination retroactive is double extortion. Apple may be in tax trouble for following the rules established by Ireland not breaking them.

The EU was founded after WW II. Ireland has been a member since 1973. The EU extracts moneys from member countries and allocates the funds back into individual country projects that hopefully benefits all member countries, much like our federal government, except the EU has significantly more extraction limitations. For example, the EU can not directly tax individuals.

The battleground for the EU should be inter-country centric. It makes no sense to launch a war with Apple and to threaten retroactive punishment for following Ireland's Policies.  Apple may not resist the EU, but companies have a long memory and the EU's action will naturally push Apple away from the EU. It is a global economy. If the EU wishes, then it should slap the hands of the Irish government rather than slap the checkbook of a company that creates thousands of jobs inside EU member countries. I suggest Tim Cook write the EU a letter and point out that China is a growing country and a likely place for all new Apple operations.

That is in my opinion.


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