Astonishing ignorance at the Senate Tax Inquiry II

From day 2 of the witch hunt:

CHAIR: Understand that I am a layman. I do not want to get myself in a little hole. From what you are saying, do you mean that you put a value of zero on the IP of Apple?

Mr Richardson : No. If Apple sold to Samsung, if it licensed its technology to Samsung, then, sure, we can expect that that is a legitimate transaction and we would treat it with that respect.

CHAIR: So what you are saying is that Apple Ireland and Apple Australia, in the proposal you are floating for discussion, could not be treated the way Apple is treating Samsung, which is how they treat each other now. At the moment they treat each other like they are distinct companies, distinct entities. You gave the example of Apple and Samsung. As I understand it, it is the same relationship between, say, Apple Ireland and Apple Australia.

Mr Richardson : Yes.

CHAIR: And you are saying, ‘No. They are the same company and should be treated like the same company.’

Dr Denniss : That is right.

CHAIR: That is interesting.

So effectively the Chair – law school drop-out* Senator Sam Dastyari (ALP, NSW) – is seriously considering a scheme where for tax purposes Australia should abandon the veil of incorporation in order to zero value intellectual property. That is the end game here – also reading through the Hansard I’m getting the distinct impression that our Senators can’t tell the difference between costs and profits.

* If he’d remained at Law School he would have learned about the veil of incorporation and the benefits related concepts such as limited liability have generated in the last 150 years or so.

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9 Responses to Astonishing ignorance at the Senate Tax Inquiry II

  1. Shy Ted says:

    “Understand that I am a layman”. He flatters himself.

  2. Tel says:

    * If he’d remained at Law School he would have learned about the veil of incorporation and the benefits related concepts such as limited liability have generated in the last 150 years or so.

    That’s been moved to law school now? If’ always wondered where it belonged.

  3. Dianeh says:

    astonishing ignorance

    Is simply not sufficient to describe this level of ignorance.

  4. H B Bear says:

    I wondered how long it would be before Richard Dennnnissssss got out of the clown car with his squeaky horn and floppy shoes. It’s not a real circus until the taxpayer funded economic equivalent of the Ponds Institute appears under the Big Top.

  5. I am the Walras, Equilibrate and Price Take says:

    If he’d remained at Law School he would have learned about the veil of incorporation and the benefits related concepts such as limited liability have generated in the last 150 years or so.

    He may have been taught it, but I doubt he would have learned anything.

  6. I am the Walras, Equilibrate and Price Take says:

    H B Bear
    #1653294, posted on April 11, 2015 at 1:26 pm
    I wondered how long it would be before Richard Dennnnissssss got out of the clown car with his squeaky horn and floppy shoes. It’s not a real circus until the taxpayer funded economic equivalent of the Ponds Institute appears under the Big Top.

    LOL

  7. ..also reading through the Hansard I’m getting the distinct impression that our Senators can’t tell the difference between costs and profits.

    Shocking, but not surprising.
    A significant chunk of the population (even possibly a significant majority) have utterly no instinct whatsoever for even the most basic concepts of economics/finance/etc.

    This Economic Illiteracy/Inability (for want of a more apt term) is in no way limited to the blue collar demographic, low socio-economic groups, the semi-skilled, the partially educated, & so on.
    Even some otherwise incredibly smart people are capable of being as dumb as a box of rocks when it comes to how a quid is handled.

    Surprising as it may be, I’ve found it even among qualified accountants working in “Big Four” (or big five, or whatever is is) Accountancy Firms. (That is, a pair of smart young mid-20’s things from KPMG or somesuch are totally unable to either comprehend, or follow, a quid through a simple three-step paper trail, much as Senator Dastyari is stumbling with in the post above.

  8. Token says:

    astonishing ignorance

    It is astonishing ignorance to see this malicious populism in such a gentle light

    Senator Dastyari proves self regulation of politicians has failed & that they require proper oversight with the threat of effective sanctions on the leaders of the party if it is not applied.

  9. JC says:

    Shocking, but not surprising.
    A significant chunk of the population (even possibly a significant majority) have utterly no instinct whatsoever for even the most basic concepts of economics/finance/etc.

    I think they do understand the difference but at some some level even i find it hard to believe that Apple isn’t at least making an operating profit close to its global average of 22.25%. In other words Apple would be drawing around $1.4 billion of operating income from selling products to Australians.

    (Morningstar says Apple makes 22.25% operating profit).

    By setting up their operation in an efficient way they can avoid paying this very high corp tax rate. Good luck to them.

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