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Facebook Finds Grass Greener In Ireland
Posted by
kdawson
on Fri Oct 03, 2008 10:42 AM
from the o'tax-break dept.
from the o'tax-break dept.
theodp writes "Facebook announced it has chosen tax-haven Dublin for its international HQ, but not all are buying COO Sheryl Sandberg's line about local world-class talent being the motivation behind the move. The Irish Times recently reported that Irish subsidiaries owned by US multinationals are opting to convert to unlimited liability status, concealing the financial performance of their Irish operations from public view. They include Microsoft's incredibly profitable Irish subsidiaries Round Island One and Flat Island Company, Google Ireland Holdings, and a subsidiary of Apple Computer. The conversions have occurred as US tax authorities have increased their scrutiny of international mechanisms used by American multinationals to reduce their taxes at home."
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the US tax code (Score:5, Insightful)
Re:the US tax code (Score:4, Insightful)
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Re:the US tax code (Score:4, Funny)
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Re:the US tax code (Score:5, Funny)
You're right. Sometimes it's the Senate.
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Re:the US tax code (Score:5, Insightful)
The whole tax and governing apparatus is rotten to the core. Money gets wasted without adequate oversight or explanation where it goes. We, the people, are getting shafted and gamed by the people who are supposedly on our payroll.
In all of history, has it EVER been different?
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I guess they need to save money while they can (Score:5, Insightful)
Because IMO Facebook is just another fad and will go the same way as Friends Reunited when something new and shinier comes along or the novelty wears off. Very few trendy websites stay trendy for more than a few years - its only the interesting ones that survive and theres a limit to how much aquaintances boring lives and silly little games can keep you interested over a long period of time.
Re:I guess they need to save money while they can (Score:5, Funny)
Viol8, you've been bitten by a zombie!
Click here to transfer all your private information to a untrusted 3rd party.
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Re:I guess they need to save money while they can (Score:5, Interesting)
Plus, Facebook has (at least) one fundamental flaw: it assumes you WANT everyone who you're "friends" with to indiscriminately know about everyone ELSE you're "friends" with. It ignores the fact that you don't necessarily WANT your kid brother (or coworkers, or parents) reading about your wild weekend (or at least not the full details you'd share with your best and closest friends).
What's needed is a social networking site with a concept of groups as containers for acquaintances and other groups, applying permissions in the order of default-deny, groups with permission, groups denied, individuals permitted, individuals denied. THEN, when you post something, you'd be able to specify its visibility scope across those groups... possibly, even creating fake or munged entries for some groups to see in lieu of "real" entries, and NO way for acquaintances to discern which group(s) they're in, or even which groups exist at all.
Then, you could create a safe, bland (semi-)public page for (almost) everyone to see, but let the appropriate acquaintances see things appropriate to their relationship with you... and possibly even maintain one or more "parallel universes" that completely override each other for people with two or more groups of friends that should (ideally) NEVER encounter each other (parents and drinking buddies being an obvious example). Ideally, you could even set up one or more "duress" passwords that logged you in as an admin for your profile with access to only a subset of your real one, in case someone like a girlfriend or family member coerced you into logging in with them present to "prove" something. By allowing an unlimited number of duress passwords with unlimited groups and parallel universes, you'd effectively achieve plausible deniability... nobody could ever force you to reveal things, because they could never know for sure whether you were logged in with a duress password or your real one.
The sad thing is, a feature like THIS would be the perfect way to monetize something like Facebook... keeping the current model free, but charging monthly or annual fees to add more sophisticated group management and/or depth.
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Re:I guess they need to save money while they can (Score:5, Insightful)
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It's not the taxes or the talent (Score:5, Funny)
as if the US spends its tax money wisely (Score:4, Insightful)
Ha! As if the US spends its tax money wisely! 900 billion here, 900 billion there, pretty soon you're talking about real money.
I asked my Representative to vote against the failout.
I think that the tax law changes started way back (Score:4, Informative)
I think that the tax law changes started way back in the Clinton administration. If I remember correctly that Congress passed legislation to make it very difficult for people to move to lower tax rate jurisdictions and keep their money and at the same time made it easy for corporations to do so. This process of giving more rights and flexibility to corporations than to individuals continued full speed ahead during W. Bush's term.
I don't think that there can be much doubt (especially after this corporate giveaway bailout being voted on today) that most governments (including mine, the USA) have been totally subverted to corporate interests. The question is, I think, given this environment, how can we as individuals thrive most effectively? I have been blogging a lot about this lately, but I won't bore anyone here with links to that :-)
duh (Score:5, Insightful)
Corporations seek environments where they can generate the most profit. Get over it. America is quickly becoming a business unfriendly environment. Taxation, absurd regulations (for example, you CAN'T test 100% of your cattle for BSE no matter how much your customers want it, or how competative it will make you), insane legal exposure...
Welcome to the "service economy."
Corporate Haven (Score:4, Funny)
Where's St. Patrick when you really need him?
No Patriotic duty (Score:5, Insightful)
In Gregory v. Helvering Supreme Court Justice Learned Hand was quoted as saying:
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
Gregory v. Helvering, 293 U.S. 465 (1935).
The fact is tax avoidance is a key part of keeping taxation in check. If it gets oppressive, you move. In this way, governments compete for taxpayers.
McCain called it? (Score:5, Informative)
Some of you may remember the Presidential debate only 6 days ago. As soon as I saw this story, I recalled McCain's argument for lowering business taxes. He used a very specific example...Ireland.
You can see the video here [google.com] with the Ireland remark highlighted.
I took the liberty of transcribing McCain's words. Not to go totally partisan up in here....but you gotta give him props for calling this one:
The business tax. Right now, United States of America business pays the second highest business taxes in the world, 35%. Ireland pays 11%. Now, if you're a business person, and you can locate any place in the world, then obviously if you go to the country where it's 11% tax versus 35, you'll be able to create jobs, increase your business, make more investment, etc. I want to cut that business tax. I want to cut it so that businesses remain in America and create jobs.
Re:Avoiding US taxes by setting up overseas (Score:5, Insightful)
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Re:Avoiding US taxes by setting up overseas (Score:5, Informative)
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Re:Avoiding US taxes by setting up overseas (Score:5, Insightful)
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Re:Avoiding US taxes by setting up overseas (Score:4, Insightful)
Hey, you guys all but invented "letting the market decide", so if you're not the most attractive country in which to pay tax, surely you'll be redressing that through competition, not regulation?!
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Re:Avoiding US taxes by setting up overseas (Score:5, Informative)
Adam Smith was a Scot, not an Irishman.
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Re:Avoiding US taxes by setting up overseas (Score:4, Insightful)
You don't have to be a financial expert to know that just ain't right.
A corporation has a duty to its shareholders to increase their equity. If they can save money by relocating, it's entirely appropriate for them to do so.
You might want to ask why the USA has such high corporate tax rates.
-jcr
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Re:OK lets cut the crap. (Score:4, Informative)
Where does one start researching this information?
Pick up a copy of The Economist magazine, and check the small ads towards the back. Or, just google for "offshore banking".
-jcr
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Re:Local world-class FINANCIAL talent (Score:5, Insightful)
So, Ireland is smarter than us in how they go about attracting corporate dollars... ... and you fault THEM for it?
Maybe if we were a little more competitive companies wouldn't bother fleeing there. Just a thought.
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Re:Local world-class FINANCIAL talent (Score:5, Insightful)
Ireland is not smarter. We are just desperate.
You must understand that Ireland, as a country, had nothing. The most common phrase I hear from older people about the past is: "This country had nothing". The sad fact is, beneath it all, Ireland still has nothing. We have no natural resources, a low population, poor infrastructure, no significant industrial base. We are an island, and communications with the continent have always been expensive, slow and prone to monopolies. Corruption is and always was a very serious problem. We have a weak judiciary, a rather inept legislature and an effective one-party system. None of these points is a crippling issue, but you must understand that Ireland was never traditionally an attractive place to invest.
The low corporation tax rate is the only, and I mean the only , thing that this country has to attract foreign investment. No one is very happy with this, least of all ordinary people who have to pay ~45% income tax rates to make up for the attractive 12.5% taxes paid by corporations and yet still have to put up with a substandard public service. Ireland is a leader in the race to the bottom, and it cannot be denied that this policy has paid off. Big fish like Microsoft, Pfizer, Dell, Intel, etc have contributed substantially to Ireland's transition from a second world country in 1990, to a ... well talk to me after the current crisis is over, but I'll say for now a first world one.
The low corporation tax had lead to some substantial anomalies. Former Taoiseach Garret Fitzgerald has argued for years that Ireland's official GDP figures are grossly misleading, with a very small amount of foreign companies contributing a sizeable fraction of GDP(If I remember correctly, Pfizer's Viagra operation in Cork alone was said to account for 3% of GDP). But because the tax rate is so low, these profits will largely be sent back to their home countries, and the country will not see the benefit(as much).
Make no mistake, Ireland has made a Faustian deal with multinational companies. If even one, just one, major american company decides to pack up and head elsewhere, this country will feel the impact for many years. The company might consider its presence relatively small in global terms, but in Irish terms Microsoft's Dublin office is akin to Ma Bell in its heyday. At this point, we literally cannot afford to ever increase the corporation tax rate to anywhere near the rate in England or the continent. If we do, one or more multinational companies will leave, and the country will go under.
Many of these same reasons lay behind the bail out of Irish banks this week by the government. Our banks are small in global terms, but if they go down, we go down with them. (And they were going down. Ireland's housing crisis is exactly the same as in the US only even more extreme). Before you mention it, I will say that yes, this country as a whole has been mismanaged. For many years. I and most people living here are chronically aware of this fact.
Ireland has changed substantially in the last ~15 years. But I must stress that our great national fear has never gone away. That fear is that the country will become utterly bankrupt, and everyone in it will be reduced to abject poverty. "This country was a disaster." I've been told this over and over ad nauseum since I was old enough to speak. Even the cubs of the Celtic Tiger, for all their confidence, are dimly aware of this fact. Despite all the mobile phones and iPods, green beer, SUV's, wine counters, foreign holidays, etc, etc, Irish people collectively have not and will never let go of this one, real and ever present terror that they will be, as a nation, pauperised. Again. It has happened over and over and over. In the 1930's, the 1950's and the 1980's, and that's just in the modern era.
Ireland still, to this day, has very little going for it, and people here will do everything they can to avoid going back to nothing. As such, I seriously doubt that they
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