Wednesday, August 31, 2016

Apple Is Low Hanging Fruit for Hegemons

Who knows if Apple will ever actually pay the $14.5 billion in avoided taxes to the E U.   Apple is sitting on a lot of what banks call money in front of us, but is just ex nihilo credit accumulation tallies.  It's not so much taxes not paid, but to whom.
But Cook is right that national governments are preparing to battle over how multinationals’ tax revenues are allocated and collected. The US Treasury fired a warning shot last week with a white paper (pdf) arguing that the kind of retroactive recoveries proposed by the EU today are inappropriate. Foreign taxes paid by US companies are deductible at home (one reason to be suspicious when multinationals talk about double taxation) and Apple’s bill to the EU could mean, ironically, it pays even less tax in the US in the near future.
So this will probably be settled by some international agreement over who gets what.

Keep in mind corporations cannot pay taxes, only end users can pay.  It is the customers of Apple who pay all of Apple's taxes, whatever they may be.  Now the fact that, after paying taxes, Apple is sitting on a bundle of ex nihilo credit, probably the largest ever known to mankind, is exciting the Hegemons.  They have bills to pay, promises to keep, tallied in ex nihilo credit, and Apple is rich and vulnerable.

Apple would be using that to grow its market share, but here is the rub: that cannot go on forever.  And when it starts to decline, well, hegemons feel they can use wealth better, or at least have a superior claim, over those who earned it.

It is no surprise Apple has located its haul in places that are "gray."  When good king Hezekiah showed off his wealth to ambassadors from Babylon, it wasn't long before Babylon sent armies to relieve Israel of its wealth.  (2 Kings 20).  By law, Apple has to tell Uncle Sam what the wealth is but not necessarily where it is.  Anyway, that much concentrated in one kingdom is going to get taken away.

As long as the pile was growing, nobody was going to kill the goose laying the golden egg.  But now that everyone's pile is declining, the scramble begins.  First the biggest.

This is not to say that you can watch and tell when they will come for the change in the ashtray of your 2004 Honda Accord, and your 2004 Honda Accord.  The fact is when Carmex changes its packaging to vend less than before, the entire economy is coming after you.

To have fruit last picked, it is best to be self-employed, small business, and extending credit, using no ex nihilo credit anywhere in your operations.  Ex nihilo credit can initially get you a great high. But some day Apple Computer will be no more remembered than anyone recalls that computer titan Burroughs. Go for lifestyle, not accumulation, for what is accumulated will be taken.

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