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EU Taxing Apple Retroactively

The European Union is trying to shakedown Apple for $14.5 billion dollars. It's awful. There's lots of complaints to make. I thought of a more obscure issue I think is interesting and important:

Steping back, what's going on overall? Some people want to charge higher taxes in Europe.

Normally tax increases work like this:

First you pass a law to increase taxes. Then the law goes into effect at a later date (giving companies time to prepare for it). Companies frequently raise their prices to pay for the new taxes. So the government screws customers and blames companies in the pursuit of unearned money to spend.

Let's suppose Apple will pay whatever the taxes are, but they'll raise their prices accordingly. I don't know if that's exactly how Apple wants to handle it, but it could be.

When new taxes are announced first, and then charged second, then Apple can set prices accordingly.

But Apple can't raise their prices for past sales.

Yet, here the government is trying to raise the taxes on past sales! That's really unfair. Demands for taxes after a sale, instead of before, prevent Apple from setting prices how they want to to deal with the taxes.

Apple may be thinking: "if only we'd known you wanted more taxes, we could have dealt with it, no problem, with higher prices to pay for them. but you didn't tell us until after the sales already happened and now we haven't charged enough money to pay these taxes. it's too late. fuck this!"

(Yes I know taxes are still problematic in various ways even if you have the opportunity to raise prices to pay them.)


Elliot Temple on September 2, 2016

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