French Government Thinks Amazon Is Too Customer Friendly

[MattW]

Originally Posted by HarryT

I'm honestly baffled by what it is you're complaining about. Amazon made a loss in 2012, and an exceedingly small profit in 2011. Tax is paid on profit, not sales. What is it you're accusing them of not paying, exactly?

That's just wrong and shows you don't know a lot about taxes. Various types of taxes are paid on various types of incomes. But never let facts get in the way of a good argument.

Let me explain to you again what I'm complaining about: I am complaining about the fact that big multinationals find ways to avoid taxes by schemes that were never intended by the EU and are not available to "us" (us, the people), because the only make sense on the scale of a big corporation.

I am complaining about the fact that these loopholes stay open, because lobbying pays and blackmails politicans into leaving them open. I am complaining because therefore, big corporations have an influence over the very tax system that basically allows them to help decide the amount of taxes they (do not) have to pay.

I am complaining about the fact that as an honest citizen we neither have this opportunity, the choice nor the influence Amazon has on this tax system and that we therefore are treated unfairly.

I am complaining about the fact that a small business owner neither has this opportunity, the choice nor the influence Amazon has on this tax system.

Get it now?

[murraypaul]

Originally Posted by JD Gumby

Can't see how it's illegal - they're just charging the same VAT as they do on physical books (something I consider extremely reasonable - just because they are HTML files inside an archive doesn't make them software).

It is reasonable. It is also illegal under EU law.
Countries are allowed to set their own rates for different types of good. They are not allowed to redefine what those types of goods are, or set different rates for different goods of the same type.

[tompe]

Originally Posted by Xanthe

Starbucks isn't really a good example of a "responsible company" because it is a niche market, dependent upon people who can afford their prices and who like pretty designs on their coffee, and with their limited menu more subject to the vagaries of economy. To compete with local merchants and fast food places who offer more services and choices, they need to distinguish themselves and create the impression that they are somehow "better". Getting called on their tax version of 3-card monte and subsequently "correcting" that behavior, serves that purpose.

Bookshops seems to me to be as much niche. They depend on people that can afford their prices (compared to supermaket book prices) and so on.

[PatNY]

Originally Posted by MattW

Let me explain to you again what I'm complaining about: I am complaining about the fact that big multinationals find ways to avoid taxes by schemes that were never intended by the EU and are not available to "us" (us, the people), because the only make sense on the scale of a big corporation.

I am complaining about the fact that these loopholes stay open, because lobbying pays and blackmails politicans into leaving them open. I am complaining because therefore, big corporations have an influence over the very tax system that basically allows them to help decide the amount of taxes they (do not) have to pay.

I am complaining about the fact that as an honest citizen we neither have this opportunity, the choice nor the influence Amazon has on this tax system and that we therefore are treated unfairly.

I am complaining about the fact that a small business owner neither has this opportunity, the choice nor the influence Amazon has on this tax system.

And who created these "loopholes" and "opportunity" and enabled those "schemes" and "influence" to begin with? Your politicians and legislators. Go blame them. Amazon is just playing within the rules created by others.

I understand the frustration of some at seeing the big companies out-muscle smaller players. But it really is up to the governments to enact the laws that would change things.

Complaining about Amazon in an ebook forum will do no good whereas if you wrote you local government representative it might have a little impact.

And sometimes these "loopholes" and "opportunity" backfire on Amazon as it appears to have done last year. In 2012, Amazon paid an effective corporate tax rate of 78.6%, a particularly high amount, in part due to its strategy of leveraging tax shelters overseas. So it can be a double edged sword for them too.

At any rate, they are just playing within the system and the animosity aimed at them by a few in this thread appears to be excessive. Reserve the animosity for your politicians!

--Pat

[SteveEisenberg]

Originally Posted by PatNY

And who created these "loopholes" and "opportunity" and enabled those "schemes" and "influence" to begin with? Your politicians and legislators. Go blame them.

In the case where companies are playing off the rules of one country against another, even a planet governed by excellent national politicians and legislators couldn't coordinate between nations to avoid all loopholes.

In the case of the US, why not blame voters for electing politicians who trumpet adherence to principle and attack the other party? You can't elect that kind and expect them to turn around and act non-partisan the next day. I also blame the framers of the constitution for creating a bicameral legislature. (Go Nebraska!) If different parties control them, as now, there's no way to pass anything without opening up the legislators to charges of flip-flopping.

Consider the Amazon warehouse air-conditioning issue a few years ago. An Allentown newspaper found bad conditions for unorganized workers. Should Amazon have waited for Congress to pass a law making fines for hot facilities higher than the cost of improving the warehouses? Or was it more reasonable for Amazon to made correcting the situation a valid corporate function, as they did?

There's a place for the law, but there's also a place for public pressure, and there's even a place for comproming the bottom line in the cause of common decency even before there's public pressure.

[PatNY]

Originally Posted by SteveEisenberg

In the case where companies are playing off the rules of one country against another, even a planet governed by excellent national politicians and legislators couldn't coordinate between nations to avoid all loopholes.

You don't need to avoid "all" loopholes. Just close up the one that is in question.

And European nations already coordinate amongst themselves through the EU. If the loophole situation were harmful enough, they should act to close it.

In the case of the US, why not blame voters for electing politicians who trumpet adherence to principle and attack the other party? You can't elect that kind and expect them to turn around and act non-partisan the next day.

If a voter wants their elected politicians to stick to their guns, what then would there be to blame them for? Most of the time I don't want them to act non-partisan if that would mean compromising principles.

Voters are definitely to blame for the government they end up with.

I also blame the framers of the constitution for creating a bicameral legislature. (Go Nebraska!) If different parties control them, as now, there's no way to pass anything without opening up the legislators to charges of flip-flopping.

I "blame" the founders here too -- for doing something right in this case. Bicameralism is good for checks and balances. If it matters enough, both parties bend and we end up with a compromise solution.

Consider the Amazon warehouse air-conditioning issue a few years ago. An Allentown newspaper found bad conditions for unorganized workers. Should Amazon have waited for Congress to pass a law making fines for hot facilities higher than the cost of improving the warehouses? Or was it more reasonable for Amazon to made correcting the situation a valid corporate function, as they did?

You're comparing a safety issue for workers with leveraging lawful advantageous tax strategies? Really? Wow. Those two issues are fundamentally different.

There's a place for the law, but there's also a place for public pressure, and there's even a place for comproming the bottom line in the cause of common decency even before there's public pressure.

I agree. And I think, for example, worker safety is an issue of common decency. Leveraging advantageous tax strategies fully within an established and legal system is not.

--Pat

[ucfgrad93]

Originally Posted by Xanthe

One may not agree with the corporate tax laws as they stand, or why they exist as they do. But railing against corporations that operate under those laws when they are doing so legally is like spitting in the wind - it serves no purpose. Working to get the laws themselves changed, though, is what is needed.

This is the crux of the matter in my opinion. Law makers world wide are the ones responsible for the byzantine tax codes that corporations follow. If people aren't happy with how much taxes companies pay, then they need to put pressure on law makers to change the law.

But for people like rizla it is easier to bash companies online than to try and get laws changed.

[SteveEisenberg]

Originally Posted by PatNY

Law makers world wide are the ones responsible for the byzantine tax codes that corporations follow.

Figuring out what countries account for which corporate outputs is complex. One reason the existing corporate tax codes are complex is because of the provisions in past laws attempting to curb avoidance.

The only non-byzantine proposal I am aware of is to replace corporate taxation with a consumption tax.

Originally Posted by PatNY

You don't need to avoid "all" loopholes. Just close up the one that is in question.

AFAIK, every proposal for cracking down on tax havens has its own loopholes, or other disadvantages (for example, replacing corporate taxation with a national sales tax would favor the wealthy and turn the US into a tax haven).

Every word of tax law changes will be parsed by companies with highly aggressive tax avoidance departments to find new loopholes. Other companies will have different priorities. See: CEO Integrity and Tax Avoidance

Laws work best when most people agree with them, and adherence comes more from socialization than enforcement.

[GlenBarrington]

Originally Posted by Xanthe

Not to worry. I was just pointing out how the average person who has no idea of French politics would take that news item, thinking that it represents general public feeling.

Heck, around here there are still places selling "Freedom Fries" instead of French fries just because the owners were ticked off by France's response to the first Gulf War! Those folks are incapable of seeing any separation between the public wishes of the French population and the politics of the government functionaries.

Name a place that's selling "Freedom Fries". I'm as "red state" as you can get and I've never once seen that anywhere but on a news report on a left wing network. Not once. I think you're making that up.

[MattW]

Originally Posted by PatNY

And who created these "loopholes" and "opportunity" and enabled those "schemes" and "influence" to begin with? Your politicians and legislators. Go blame them. Amazon is just playing within the rules created by others.

Two things: (1) Corporations like Amazon (well, maybe not Amazon, but rather Big Oil, Big Electronics & other multinationals) lobbied politicians in order to get these loopholes (or leave them open).

I get your point, but you're mistaken - there's no dichotomy between politics and big business. I thought everybody knew that by now. Amazon isn't merely playing the cards it's been dealt, it stacked the deck, dealt the cards and now claims to be "merely playing by the rules". I have to call BS on that one.

(2) I do not believe that complaining here is going to change anything. I'm not that naive. I just like to discuss stuff.

Matt

[MattW]

Originally Posted by ucfgrad93

This is the crux of the matter in my opinion. Law makers world wide are the ones responsible for the byzantine tax codes that corporations follow. If people aren't happy with how much taxes companies pay, then they need to put pressure on law makers to change the law.

But for people like rizla it is easier to bash companies online than to try and get laws changed.

You seriously believe that the tax laws, the various governments and Big Business aren't connected? Do you follow politics, like, at all?

Do you honestly believe that the thousands of lobbyits in Washington and Brussels are there for fun? Don't you think that they have influence over the decisions our politicians make?

Corporations lobby for and get the rules they want; and if they don't they threaten to take jobs overseas and no politician wants to antagonize them and take jobs away from their electorate.

It's simply not true that corporations are merely playing by the rules and if we don't like it, we could change the rules by electing different politicians. Take the US, for instance, this beacon of democracy: you can either vote Republican or Democrat (otherwise, your vote is basically meaningless on a national scale), and both have an absolutely atrocious track record of reigning in Big Business. The Republicans may be more aggressive in their pro business stance, but your chances of effecting meaningful change in the tax code (or the patent system) in the US as a voter are zero. [EDIT: I do not want to get into the whole Republicans vs. Democrats mess here; the situation that you as a voter have no real choice is true in many countries, albeit maybe not as extreme as in a two-party-system like the US]

That's just a fact.

As long as the system works they way it does -- as long as money plays as big a part in politics as it does now -- we're f*cked. We'll get one step closer to being able to effect real change onc we realise that corporations are the driving force behind most pro-business laws.

So, damn yes, we should blame the corporations. We can and should, of course, blame the politicians too, but the claim that Big Business (Amazon among them) just plays by the rules and didn't make those same rules is patently absurd.

Matt

[HansTWN]

Originally Posted by MattW

You seriously believe that the tax laws, the various governments and Big Business aren't connected? Do you follow politics, like, at all?

Do you honestly believe that the thousands of lobbyits in Washington and Brussels are there for fun? Don't you think that they have influence over the decisions our politicians make?

Corporations lobby for and get the rules they want; and if they don't they threaten to take jobs overseas and no politician wants to antagonize them and take jobs away from their electorate.

It's simply not true that corporations are merely playing by the rules and if we don't like it, we could change the rules by electing different politicians. Take the US, for instance, this beacon of democracy: you can either vote Republican or Democrat (otherwise, your vote is basically meaningless on a national scale), and both have an absolutely atrocious track record of reigning in Big Business. The Republicans may be more aggressive in their pro business stance, but your chances of effecting meaningful change in the tax code (or the patent system) in the US as a voter are zero. [EDIT: I do not want to get into the whole Republicans vs. Democrats mess here; the situation that you as a voter have no real choice is true in many countries, albeit maybe not as extreme as in a two-party-system like the US]

That's just a fact.

As long as the system works they way it does -- as long as money plays as big a part in politics as it does now -- we're f*cked. We'll get one step closer to being able to effect real change onc we realise that corporations are the driving force behind most pro-business laws.

So, damn yes, we should blame the corporations. We can and should, of course, blame the politicians too, but the claim that Big Business (Amazon among them) just plays by the rules and didn't make those same rules is patently absurd.

Matt

We are not talking about the US, we are talking about France. (Amazon did not make the rules in Europe). France is now the land of ultra-high taxes. Elections are won by promising higher taxes, last time it was a ridiculous 75%. Corporations can only lobby to minimize the damage. The solution is always, let us tax the "higher incomes" some more, never "let us try to reduce spending a little".

I would agree with you on the situation in the US.

[PatNY]

Originally Posted by MattW

Two things: (1) Corporations like Amazon (well, maybe not Amazon, but rather Big Oil, Big Electronics & other multinationals) lobbied politicians in order to get these loopholes (or leave them open).

I get your point, but you're mistaken - there's no dichotomy between politics and big business. I thought everybody knew that by now. Amazon isn't merely playing the cards it's been dealt, it stacked the deck, dealt the cards and now claims to be "merely playing by the rules". I have to call BS on that one.

(2) I do not believe that complaining here is going to change anything. I'm not that naive. I just like to discuss stuff.

Matt

Regardless of the extent of the influence of big business on politicians -- and I think you exaggerate that influence -- it's the voters who are still rubber-stamping the policies by continuing to vote certain politicians in. So to the extent of that influence between the two groups, we are also voting for the big companies to continue their policies, whatever they may be. We the people are dealing these cards to Amazon, Apple, Google, etc. and telling them to continue on their merry ways.

If you want things changed, don't keep voting in the politicians who will so readily get into bed with big business.

In the meantime, there are politicians who are pushing for change in the way big multinationals such as Apple, Amazon and Google are taxed. In a pluralistic country such as the U.S., that change comes slowly. But at least they acknowledge the problems.

--Pat

[PatNY]

Originally Posted by MattW

So, damn yes, we should blame the corporations. We can and should, of course, blame the politicians too, but the claim that Big Business (Amazon among them) just plays by the rules and didn't make those same rules is patently absurd.

Matt

As HansTWN so aptly pointed out, Amazon likely had nothing or little to do with making those rules that are at the heart of this thread -- the 3% VAT and other Luxemburg tax advantages.

Blame the EU for allowing Luxemburg (and France) to lower their VAT and not going after them hard enough. They are clamping down, but it's the EU laws which allowed Amazon and others to take advantage of the loopholes in the first place.

So at least as pertains to the main issues in this thread -- Amazon in Europe -- you are dead wrong on your insistence they are the ones who created the rules.

And even if you want to consider Amazon only in the context of the U.S., it is a relatively new company. Its success and lobbying clout is recent, so any influence it had on current domestic laws pertaining to the taxation of U.S. corporations is probably negligible or minor. Those laws existed before Amazon was born.

--Pat

[PatNY]

Originally Posted by SteveEisenberg

Figuring out what countries account for which corporate outputs is complex. One reason the existing corporate tax codes are complex is because of the provisions in past laws attempting to curb avoidance.

Steve, I didn't write that comment to which you were replying. But since you attributed it to me, I'll chime in and say that it isn't as hard as you think. There are articles which break down how much a certain multinational is making in various parts of the world. So if a journalist can do it, so can the politicians. The companies in question are also public companies, so a lot of information is readily available.

AFAIK, every proposal for cracking down on tax havens has its own loopholes, or other disadvantages (for example, replacing corporate taxation with a national sales tax would favor the wealthy and turn the US into a tax haven).

Every word of tax law changes will be parsed by companies with highly aggressive tax avoidance departments to find new loopholes. Other companies will have different priorities. See: CEO Integrity and Tax Avoidance

That doesn't mean the politicians shouldn't try to effect change. So let the companies keep trying to find new loopholes. The politicians should then move to close those up eventually too.

Laws work best when most people agree with them, and adherence comes more from socialization than enforcement.

Is this really relevant in this thread? Amazon is not breaking any laws.

--Pat