EU apologists were quick on the draw this morning.
Defending the nonsensical decision made by the European Commission to force Apple (NASDAQ: AAPL) to pay $14.5 billion in back taxes tributes, one limp noodled knuckle-dragger made the following comment on a message board:
Just pay it. It’s just three months worth of your yearly profits. That’s nothing for a big corporation like Apple!
Make no mistake about it. If anyone tried to take three months of that guy’s yearly income, his head would explode.
I don’t get it.
I don’t understand how the EU can possibly survive in its current form, and I sure as hell don’t understand why more folks don’t see the EU as the bully it is. While it may have been built under the assumptions of good intentions, it really has turned into a giant Keynesian shit show.
And for evidence of this, look no further than this recent decision.
Don’t Bite the Hand that Feeds You
According to the European Commission, the Irish government illegally granted state aid to Apple by helping the company artificially lower its tax bill.
Under the terms of EU state aid rules, EU member states cannot give tax benefits to selected companies.
Interestingly, while back taxes could help Ireland pay off a sizable portion of its debt, the good people of the Emerald Isle aren’t interested in throwing Apple under the bus.
You see, because of Ireland’s corporate tax structure, companies like Apple, Facebook, and Google have moved in. The result has been the addition of 140,000 jobs for a country that certainly needs them.
For a commission charged with the responsibility of ensuring economic growth throughout Europe, punishing the largest taxpayer and one of the largest job creators in the EU is, for lack of a better word, stupid.
Of course, I don’t work for Apple, so this does not effect me personally. But Tim Cook does work for Apple, and his response to this ruling is so perfectly on point, that you have to read it for yourself.
Check it out:
Thirty-six years ago, long before introducing iPhone, iPod or even the Mac, Steve Jobs established Apple’s first operations in Europe. At the time, the company knew that in order to serve customers in Europe, it would need a base there. So, in October 1980, Apple opened a factory in Cork, Ireland with 60 employees.
At the time, Cork was suffering from high unemployment and extremely low economic investment. But Apple’s leaders saw a community rich with talent, and one they believed could accommodate growth if the company was fortunate enough to succeed.
We have operated continuously in Cork ever since, even through periods of uncertainty about our own business, and today we employ nearly 6,000 people across Ireland. The vast majority are still in Cork — including some of the very first employees — now performing a wide variety of functions as part of Apple’s global footprint. Countless multinational companies followed Apple by investing in Cork, and today the local economy is stronger than ever.
The success which has propelled Apple’s growth in Cork comes from innovative products that delight our customers. It has helped create and sustain more than 1.5 million jobs across Europe — jobs at Apple, jobs for hundreds of thousands of creative app developers who thrive on the App Store, and jobs with manufacturers and other suppliers. Countless small and medium-size companies depend on Apple, and we are proud to support them.
As responsible corporate citizens, we are also proud of our contributions to local economies across Europe, and to communities everywhere. As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world.
Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law — the same kind of guidance available to any company doing business there. In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe.
The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.
The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed.
At its root, the Commission’s case is not about how much Apple pays in taxes. It is about which government collects the money.
Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.
In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.
Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. Using the Commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.
Apple has long supported international tax reform with the objectives of simplicity and clarity. We believe these changes should come about through the proper legislative process, in which proposals are discussed among the leaders and citizens of the affected countries. And as with any new laws, they should be applied going forward — not retroactively.
We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment. We firmly believe that the facts and the established legal principles upon which the EU was founded will ultimately prevail.
I don’t know how this EU decision is going to pan out, but what I do know is that the European Commission has been losing a lot of credibility lately. If the folks that run the commission have any sense about them, they’ll apologize, walk quietly out of the room with their heads hanging low, and never mention this incident again.