More than three months after the European Commission started investigating the possibility that Ireland had been providing illegal state aid for Apple, it finally published a letter containing the information that aroused its suspicions. Essentially, in 1991 and 2007, Apple and Ireland agreed that much of the money flowing into the company’s Irish accounts had nothing to do with its operations in the country, and hence shouldn’t be taxed as profit in Ireland. Instead, the two sides negotiated a deal in which Apple paid tax on a certain percentage of its Ireland-related costs. The deal stood for 15 years, much longer than most European countries would allow such tax rulings to remain in force. Even after some amendments, Apple Sales International paid taxes on less than $80 million in 2011, a year in which the Ireland-incorporated entity recorded $22 billion in pretax income, according to the U.S. Senate’s Permanent Subcommittee on Investigations.

Hey so now we know how Apple’s been avoiding taxes in Ireland - in exchange for situating a few employees in Ireland, the Irish government agreed to pretend that the profits Apple was storing in Ireland didn’t actually count as profits. The European Commission has been investigating and their letter is actually pretty angry by government bureaucracy standards. Let’s review why this kind of special tax shelter deal is terrible for everyone:

  1. Obviously, this deprives the US government of a ton of tax revenue. Apple gets all the benefits of a US company - educated workforce, transportation and utilities infrastructure, intellectual property law - and lets poorer people and companies pay for it. This deal has basically been a free ride of several billion dollars for Apple.
  2. Deals like this mean a huge race to the bottom between countries in terms of negotiating special deals. It looks great to announce to your voters that you’ve attracted a few dozen high-profile tech jobs by massively weakening your financial regulations, so you can see why it might seem like a good deal for Ireland. But they’re not just yentzing some other country’s finances here - they’re creating an incentive for everyone to scramble to offer sweeter and sweeter deals to massive companies with effective popular branding.
  3. On a broader scale, handing companies tens of billions of dollars just for the ability to lobby for a deal like this totally destroys the incentives for innovation in the tech industry. Our system is geared to rely on the promise of private-sector profits to deliver us new technology in terms of computers and mobile devices. If we’re turning around and saying “nope wait you get more profit from cajoling a small country whose politician want to impress the public to give you tax breaks than you ever would from new products” this weakens the incentives for new projects even further.

So yeah, what Apple has done here is just terrible. Seriously hoping the European Commission can crack down effectively? Obviously it would be cool if the US government could act but not holding my breath on that one.

(via jakke)

There are people replacing farm workers, so you can weed plants and provide plant-by-plant care. People who are doing machines to make hamburgers automatically, all the way up the chain to people who are replacing law clerks or even doctors, psychiatrists, ENT specialists, you name it. So the whole span, from very simple work to very large work, is being replaced in a way that is a little bit scary.

This is my last week with Tumblr

To say it has been a pleasure and privilege would be an understatement.

I wanted to take a moment and list the top five lessons I’ve learned (or relearned) working here. They may seem obvious, but it is easy to lose sight of them when you find yourself so deep in the trenches of the day-to-day.

  1. Be realistic in quoting what you can do, and timely in doing it.

  2. Listen more.

  3. Problems rarely matter as much the next day. Those that do are the ones that deserve your focus.

  4. You cannot eliminate your biases, but you can correct for them. This has to be done in a structured manner - relying on your gut to correct your gut is a recipe for disaster.

  5. The demands of your job should not override your responsibilities as a human being.

I’m incredibly grateful to have gotten to know everyone working here, and to work alongside them on a product I believe in. Stay wonderful, Tumblr.