[mattyb]

Google Boss Urges 'Reasonable' Debate On Tax

Lots of screaming and shouting at the moment, and in previous weeks, about large companies not paying enough tax. Some of the figures thrown about do make me think that they should be paying more.

But the point that I'd like to make in reference to company execs being interrogated by British MPs is this : don't use language such as "We love the UK." It sounds like bullshit, it smells like bullshit and even if you really do love the UK, they don't believe you.

Also, don't say "Well under American law" either. You have a company setup in the UK. It has to respect UK law and/or European law, just as European companies have to respect US law when setting up a US branch.

Of course, we mustn't forget that those doing the interrogating are as crooked as they come.

[subego]

"Those offshore loopholes didn't get carved out by poor people."

- Jon Stewart

[Doc HM]

Can any government adjust and modify it's tax system fast enough to keep up with the legions of tax accountants that these corporations maintain? I would guess not.

Google however are particularly self serving in their comments. Yes. fine Luxembourg has the best tax rates, however they don't build a business there, they build it where they need to and then simply register in Luxemboug. It's legal, but it's not moral so quit shoving your "Do no Evil" line down our throats.

Eric Schmidt also said in the UK parliament that we should essential just shut up and be grateful as google pay their employees, who then pay Income tax, so shut your whining limey mouths, (I paraphrase). Yes the workers who generate enormous profits that you pay no tax on.

It's high time we all grew up and realised that these mega corps are not our friends. All large companies lack any moral dimension. Any appearance of care or morality is simply generated by a cost/benefit equation from the PR department.

This means the only power we have is the power of the market since politicians are unable (and unwilling) to rein these companies in. I have not seen an effective boycott of either Amazon or Google.

[Shaddim]

Essentially, yes. Either charge a competitive tax rate or shut up.

[subego]

The thing is though, if a company has to pay more in taxes, all else being equal, they'll simply charge more for their good or service.

We end up paying the tax anyway.

[OreoCookie]

I don't like the amount of fake outrage here, it's not like what Apple is doing is special or different from what other companies have been doing for decades.

The question of what is a »fair« tax rate is not easy. In my universe, fair would orient itself along these lines:
(1) The tax rate of large and small companies should be the same or very similar.
(2) The corporate tax rate should be in proportion to the tax rate of natural persons. (I can't found a version of myself on the Bahamas and re-route my disposable income there.)
(3) Companies that make money should pay taxes.

I don't let Apple's whining count (»we're paying that and that proportion of the total tax income«): yes, they are paying a sizable share of taxes, but they're also benefitting disproportionately from the US (and other governments).


@subego
No, that's not correct in two ways: (1) In case of Apple and all other companies which make a sizable portion of their income exporting goods to other countries, citizens of other countries would end up paying. And (2) any taxes that are saved by large corporations is money missing from budgets (be it federal, state or whatnot). Since roads, bridges, schools, police and other parts of infrastructure have to be paid irrespectively, the tax burden is shifted from companies to working citizens.

[subego]

Originally Posted by OreoCookie 

@subego
No, that's not correct in two ways: (1) In case of Apple and all other companies which make a sizable portion of their income exporting goods to other countries, citizens of other countries would end up paying.

Yes. We. All of us.

Originally Posted by OreoCookie 

@And (2) any taxes that are saved by large corporations is money missing from budgets (be it federal, state or whatnot). Since roads, bridges, schools, police and other parts of infrastructure have to be paid irrespectively, the tax burden is shifted from companies to working citizens.

Where do companies get their funds to pay taxes?

Working citizens.

Six of one...

[OreoCookie]

Originally Posted by subego 

Yes. We. All of us.

For the sake of the discussion, it is important in which Apple pays taxes, there will be a net flux of money. Your simplistic argument only works when a company only trades domestically (which is not the case here).

Originally Posted by subego 

Where do companies get their funds to pay taxes?

Again, you're forgetting that these companies are international: if you would change the balance of net tax income to lower the burden on natural persons and increase the tax burden of companies, then American infrastructure would be co-funded more strongly by people from abroad (e. g. Chinese or French who buy iPhones and iPads). Plus, that would also help equalize the trade imbalance.

[olePigeon]

This is what I'd like to see, or something similar. But I'm not an economist.

Tier 1 2% (Previously 10%)
Tier 2 4% (Previously 15%)
Tier 3 6% (Previously 25%)
Tier 4 10% (Previously 28%)
Tier 5 13% (Previously 33%)
Tier 6 16% (Previously 35%)
Tier 7 20% (Previously 39.6%)

Remove all exemptions. Lower retirement back down to 60, and tax all sources of income acquired before retirement age; that includes all capital gains. U.S. citizens with offshore accounts and/or foreign income are taxed the difference between two rates, if any.

Also, penalties for breaking commerce laws should be forfeiture of ill-gotten profits in addition to a fine. None of this ridiculous $130 million fine on $40 billion profits gained from breaking the law. That isn't a penalty.

[subego]

Originally Posted by OreoCookie 

Again, you're forgetting that these companies are international: if you would change the balance of net tax income to lower the burden on natural persons and increase the tax burden of companies, then American infrastructure would be co-funded more strongly by people from abroad (e. g. Chinese or French who buy iPhones and iPads). Plus, that would also help equalize the trade imbalance.

Why wouldn't that get sucked up by taxes levied in those other countries?

Note: I phrased this as a question with the intent of fostering discussion. If my intent was to be unpleasant, I'd phrase it as a statement about how this must be a part "you forgot".

[Shaddim]

Originally Posted by olePigeon 

This is what I'd like to see, or something similar. But I'm not an economist.

Tier 1 2% (Previously 10%)
Tier 2 4% (Previously 15%)
Tier 3 6% (Previously 25%)
Tier 4 10% (Previously 28%)
Tier 5 13% (Previously 33%)
Tier 6 16% (Previously 35%)
Tier 7 20% (Previously 39.6%)

Remove all exemptions. Lower retirement back down to 60, and tax all sources of income acquired before retirement age; that includes all capital gains. U.S. citizens with offshore accounts and/or foreign income are taxed the difference between two rates, if any.

That would be a massive break for me, compared to what I paid last year. I'd much appreciate it.

[Waragainstsleep]

I think tax loopholes are the responsibility of government or the tax office to close. If you leave a loophole, companies will take advantage of it. I would if I could.

That said, it doesn't hurt to use these companies to help highlight a loophole if you are trying to get it closed.

What really pisses me off is that my local council will hunt me to the ends of the Earth over £100 they forgot to ask me for a couple of years ago (while providing me absolutely sweet FA in return for my taxes btw) and then the HMRC goes and just lets the like of Vodafone off completely from an £8 Billion pound tax bill. If they don't have to pay it, why the f*ck should I?

[The Final Dakar]

Originally Posted by Shaddim 

Essentially, yes. Either charge a competitive tax rate or shut up.

Isn't Ireland essentially the Pirate Bay of corporate tax rates?

[Shaddim]

Originally Posted by The Final Dakar 

Isn't Ireland essentially the Pirate Bay of corporate tax rates?

Compared to the rest of the UK, it's very competitive.

[olePigeon]

Originally Posted by Shaddim 

That would be a massive break for me, compared to what I paid last year. I'd much appreciate it.

Possibly, I don't know how you are with your taxes. Most people would see an almost 50% reduction on their income tax liability, but remember, no exemptions. Also, dividends, interest, short sales, bonuses, gifts, etc. would be taxed as income if you're under 60. This is to encourage long term investments and keep people from using the stock market as their only source of income on their multi-million dollar investments without paying anything remotely close to their actual income tax.

So someone like Warren Buffet would be paying their full 20%, instead of the effective 12% he pays.

Also, all loopholes closed.

[Uncle Skeleton]

Originally Posted by olePigeon 

no exemptions.

But what about the children? Won't someone please think of the children?

Seriously though, this would really hurt families with children and benefit those without. I'm sympathetic to the idea of ending tax incentives like home ownership, but the costs of raising children really does seem to be in a league of its own, and unlike houses children themselves are citizens who deserve some consideration under the law.

[Waragainstsleep]

Originally Posted by Uncle Skeleton 

But what about the children? Won't someone please think of the children?

Seriously though, this would really hurt families with children and benefit those without. I'm sympathetic to the idea of ending tax incentives like home ownership, but the costs of raising children really does seem to be in a league of its own, and unlike houses children themselves are citizens who deserve some consideration under the law.

Current generations of children are massively overindulged. Their parents need to learn to be a bit more sensible, a bit less alarmist and above all, if you don't have the money to have kids, don't have them. In the 80s you could fit 3 kids in the back of a VW Golf for a day trip and no-one batted an eyelid. Nowadays parents seem to think they need a Range Rover or Minivan to move one baby a few hundred yards down the road. And they fill the rest of the car with all manner of expensive crap.

[OreoCookie]

Originally Posted by subego 

Why wouldn't that get sucked up by taxes levied in those other countries?

Taxes levied by other countries don't help pay for American roads. That's really the core of the discussion here: Tim Cook was summoned to explain why he didn't pay more taxes in the US on money that is to a large part earned abroad.

[OreoCookie]

Originally Posted by Waragainstsleep 

What really pisses me off is that my local council will hunt me to the ends of the Earth over £100 they forgot to ask me for a couple of years ago (while providing me absolutely sweet FA in return for my taxes btw) and then the HMRC goes and just lets the like of Vodafone off completely from an £8 Billion pound tax bill. If they don't have to pay it, why the f*ck should I?

»They're bigger than you are.«
(I absolutely share your sentiment, though, it also rubs me the wrong way that someone who evades €100,000 in taxes is treated differently from someone who steals €100,000 worth of cars.)

[Uncle Skeleton]

Originally Posted by Waragainstsleep 

and above all, if you don't have the money to have kids, don't have them.

Well that's the thing, isn't it? It's not the child's fault, but it's the child who suffers for it.

[olePigeon]

Originally Posted by Uncle Skeleton 

But what about the children? Won't someone please think of the children?

Seriously though, this would really hurt families with children and benefit those without. I'm sympathetic to the idea of ending tax incentives like home ownership, but the costs of raising children really does seem to be in a league of its own, and unlike houses children themselves are citizens who deserve some consideration under the law.

The idea is that everything that should be taxed, is taxed. There are trillions of dollars located in offshore accounts by U.S. corporations and wealthy individuals that remain untaxed. Even if at a significantly reduced rate that it should be today, it's better than not being taxed at all. Theoretically, the government should have a lot more money to properly fund public services and assistance programs, including providing child care for working parents, reduced health care rates, and publicly funded schools where parents and teachers aren't forced to buy school materials that should already be provided. The end result cost savings for parents should be more than any deductions they now claim on their taxes.

Also, filing taxes would be really easy.

The real trick would be keeping Republicans and Democrats from spending all the money on special interest programs. That's about as likely as this tax idea.

[olePigeon]

NASDAQ & co. was fined a whopping $10 million for the whole Facebook IPO scandal. Guess how much money they made.

It's good to be Too Big.

[subego]

Originally Posted by OreoCookie 

Taxes levied by other countries don't help pay for American roads.

Exactly my point. They suck up income which could be used to pay American taxes.

[el chupacabra]

Originally Posted by Waragainstsleep 

Current generations of children are massively overindulged. Their parents need to learn to be a bit more sensible, a bit less alarmist and above all, if you don't have the money to have kids, don't have them. In the 80s you could fit 3 kids in the back of a VW Golf for a day trip and no-one batted an eyelid. Nowadays parents seem to think they need a Range Rover or Minivan to move one baby a few hundred yards down the road. And they fill the rest of the car with all manner of expensive crap.

Not to mention even 5 year olds have smart phones and designer clothes these day.

[Hawkeye_a]

Originally Posted by olePigeon 

The idea is that everything that should be taxed, is taxed. There are trillions of dollars located in offshore accounts by U.S. corporations and wealthy individuals that remain untaxed. Even if at a significantly reduced rate that it should be today, it's better than not being taxed at all. Theoretically, the government should have a lot more money to properly fund public services and assistance programs, including providing child care for working parents, reduced health care rates, and publicly funded schools where parents and teachers aren't forced to buy school materials that should already be provided. The end result cost savings for parents should be more than any deductions they now claim on their taxes.

Also, filing taxes would be really easy.

The real trick would be keeping Republicans and Democrats from spending all the money on special interest programs. That's about as likely as this tax idea.

Just an observation:
It's fascinating to watch the American(and many other western nations') psyche drift towards redistribution/central-planning (and suffer from it), while concurrently watching the psyche of people in China, India, Russia and Brazil drift away from central-planning/redistribution towards free markets and capitalism (and prosper from it).

[mduell]

Originally Posted by Doc HM 

Can any government adjust and modify it's tax system fast enough to keep up with the legions of tax accountants that these corporations maintain? I would guess not.

If you don't write loopholes, there's nothing for those legions to do.

Originally Posted by subego 

The thing is though, if a company has to pay more in taxes, all else being equal, they'll simply charge more for their good or service.

We end up paying the tax anyway.

The taxes are split between the supplier and the buyer based on their relative elasticities.

[Uncle Skeleton]

Originally Posted by el chupacabra 

Not to mention even 5 year olds have smart phones and designer clothes these day.

Cherry picking is all well and good, but even in the most spartan and miserly household, a child is going to be their largest expense. And no other expense merits protection by the rest of us, just for its own sake.

[Uncle Skeleton]

Originally Posted by olePigeon 

The idea is that everything that should be taxed, is taxed.

That idea is a bad idea. A good idea would be based on how much tax revenue is needed and how best to get it. The reason we're in the mess we are now (too much complexity) is by focusing on what people "should" pay, not on how to get enough money to serve everyone.

Theoretically, the government should have a lot more money to properly fund public services and assistance programs

How much do we need for that? Or is the definition of enough perpetually "a bit more than what we have now"?

Also, filing taxes would be really easy.

This I agree with. The entire "tax accounting" business is a drag on our collective productivity. But I think your stated reason is backwards. It shouldn't be about taking more, it should be about taking as little as possible to meet the stated, agreed-upon goals.

[subego]

Originally Posted by mduell 

The taxes are split between the supplier and the buyer based on their relative elasticities.

Semantic.

If we're not paying in cash, we're paying in lost production and employment, which is (arguably) worse.

[olePigeon]

Originally Posted by Uncle Skeleton 

That idea is a bad idea. A good idea would be based on how much tax revenue is needed and how best to get it.

I'd be fine with that, but what do you do about unexpected expenses? You can't predict what you'll need if there's a huge natural disaster. Also, having a pay cheque that changes month to month would be troublesome for many people. It's hard not to get too political on this point, so I'll end it there.

Originally Posted by Uncle Skeleton 

The reason we're in the mess we are now (too much complexity) is by focusing on what people "should" pay, not on how to get enough money to serve everyone.

Well, I think that's a whole other can of worms. It has more to do with the 1% getting to decide tax laws. In my opinion, we need to overturn Citizen's United decision, and get rid of lobbying all-together. There should be a fixed fund for qualifying candidates. They present their ideas, give a speech, and the people decide. The value of someone's vote should not be proportional to their personal wealth.

Originally Posted by Uncle Skeleton 

How much do we need for that? Or is the definition of enough perpetually "a bit more than what we have now"?

Well, it's a big assumption that the money raised is getting to where it needs to be in the first place. Assuming we have our basic needs covered (i.e. paved roads, education, health care, etc.), The majority of any surplus goes into a special fund that is only used to offset a recession and keep the economy healthy.

Originally Posted by Uncle Skeleton 

This I agree with. The entire "tax accounting" business is a drag on our collective productivity. But I think your stated reason is backwards. It shouldn't be about taking more, it should be about taking as little as possible to meet the stated, agreed-upon goals.

Mine doesn't take more, it reduces it by 50%. The goal is close loopholes and cut the pork. You can't meet future difficulties if you only ever take "just enough."

[olePigeon]

Originally Posted by Hawkeye_a 

Just an observation:
It's fascinating to watch the American(and many other western nations') psyche drift towards redistribution/central-planning (and suffer from it), while concurrently watching the psyche of people in China, India, Russia and Brazil drift away from central-planning/redistribution towards free markets and capitalism (and prosper from it).

I'll take U.S. suffering over Indian prosperity any day of the week. Free market capitalism doesn't care about environmental or health issues, and that's readily apparent in all those countries.

[mattyb]

Originally Posted by olePigeon 

I'll take U.S. suffering over Indian prosperity any day of the week. Free market capitalism doesn't care about environmental or health issues, and that's readily apparent in all those countries.

They never cared about environmental or health issues, free market capitalism or not.

[ghporter]

Getting all hot and bothered about a company following the rules to its advantage is not very productive. Instead of McCain going red-faced about Apple incorporating a subsidiary in Ireland under their laws so that its profits aren't under U.S. rules, why isn't he suggesting a fix? Basic U.S. law about corporate taxes states that a company that isn't incorporated in the States is not taxed by the States. Irish law says a corporation is taxed according to where it is controlled, and the Apple Irish operation is controlled out of Cupertino. Catch 22 for the tax man, but perfectly within the rules.

[Hawkeye_a]

Taxing Corporations - Milton Friedman(Youtube)

[Uncle Skeleton]

Originally Posted by olePigeon 

I'd be fine with that, but what do you do about unexpected expenses?

It's not hard to borrow for emergencies, when you haven't used up all your credit on the routine.

Also, having a pay cheque that changes month to month would be troublesome for many people.

I don't see how that's any different for the non-loophole model than it is for the loophole model. It's just a difficulty we have to deal with either way.

Well, it's a big assumption that the money raised is getting to where it needs to be in the first place.

That assumption is a prerequisite for the whole tax concept. If we can't assume (mostly) that, then all our taxes are going to waste and we'd be better off not collecting them at all.

Mine doesn't take more, it reduces it by 50%. The goal is close loopholes and cut the pork. You can't meet future difficulties if you only ever take "just enough."

Why can't you meet "future" difficulties with "future" dollars aka borrowing? Then you can pay it back, after you know how much it costs, and you're back to balance. I can guarantee you that "cutting pork" is the last thing that will happen as a result of caching a huge rainy-day fund.

[subego]

Originally Posted by Hawkeye_a 

Taxing Corporations - Milton Friedman(Youtube)

[coff, coff]

Originally Posted by subego 

The thing is though, if a company has to pay more in taxes, all else being equal, they'll simply charge more for their good or service.

We end up paying the tax anyway.

[Uncle Skeleton]

Originally Posted by subego 

[we end up paying in higher costs]

When we pay in higher costs, we get to decide whether we (the individual) wants to pay it or not. When we pay taxes, we don't get that option of self-determination. I think there is a large difference there, both philosophical and material. What do you think?

(discl., I did not watch the linked video)

[Hawkeye_a]

Originally Posted by subego 

[coff, coff]

Yup. Chicago School of Econ?

[Hawkeye_a]

Originally Posted by Uncle Skeleton 

When we pay in higher costs, we get to decide whether we (the individual) wants to pay it or not. When we pay taxes, we don't get that option of self-determination. I think there is a large difference there, both philosophical and material. What do you think?

(discl., I did not watch the linked video)

Watch the video, it's all of 4-5 minutes.

I think what you are getting at is the difference between 'persuasion' and 'coercion':

Persuasion vs Coercion - Milton Friedman(YouTube)

[Uncle Skeleton]

Originally Posted by Hawkeye_a 

Watch the video, it's all of 4-5 minutes.

No videos. How about you summarize the video. It will take you all of 30-40 seconds, and then it will take every other reader of the thread 20-30 seconds instead of 240-300 seconds.

I think what you are getting at is the difference between 'persuasion' and 'coercion':

Persuasion vs Coercion - Milton Friedman(YouTube)

I'm not watching that. I would be happy to read a summary of it though.

[Hawkeye_a]

Originally Posted by Uncle Skeleton 

No videos. How about you summarize the video. It will take you all of 30-40 seconds, and then it will take every other reader of the thread 20-30 seconds instead of 240-300 seconds.


I'm not watching that. I would be happy to read a summary of it though.

I'm not going to transcribe what the man has to say. If you have some aversion to video, you can buy and read his book if you want: Free To Choose (Amazon)

Cheers

[mattyb]

Originally Posted by Hawkeye_a 

Taxing Corporations - Milton Friedman(Youtube)

I'm no great economist, but this is wrong.

Lets says that Apple employs 50,000 people in the US. It has $10 billion in cash outside of the US. If it was to repatriate the $10 billion then Apple would pay taxes on the $10 billion. The employees would not have to pay any taxes. The cost of the employees did not go up (or down). If the company left the money overseas then there would be zero difference to the employees (I'm assuming they aren't shareholders).

Could someone explain where I'm wrong? In simple language please.

[subego]

Allow me to ask you a couple questions.

If Apple spent that $10B on research and development, even if any of those 50,000 workers weren't paid directly from that money, wouldn't it still help them? At the most basic level, those workers need something to produce or sell, or they are out of a job, so isn't the money spent on things for them to produce and sell ultimately helping them?

Cut that $10B down to $8B. Aren't those workers now being helped less (also known as harmed)?

[subego]

Originally Posted by Uncle Skeleton 

No videos. How about you summarize the video. It will take you all of 30-40 seconds, and then it will take every other reader of the thread 20-30 seconds instead of 240-300 seconds.

I agree with you in principle, but it's sort of (I repeat, sort of) asking you to summarize four minutes of a philosophical lecture by Einstein or Feynman or something. I'm sure I could do it, but there's some serious pressure here.

I want to be constructive though. I'll transcribe the first minute. Maybe we can kluge together the whole thing.

[subego]

Here's the first minute.

What's business? There's no business to be taxed!

There are people. Only people can pay taxes. Can I tax this floor? Can I tax the building? The building can't pay taxes. Only people can pay taxes.

So when you talk about a tax on business, it has to be payed by somebody. Either it's paid by the stockholder, or it's paid by the customer, or it's paid by the worker. There's no other way[?] it can come from.

There's no, uh… There's no Santa Claus. No Tooth Fairy that's going to provide a source by which the government can spend money that doesn't come from somebody. Somebody has to pay. And yet, over and over again you hear the claim we must not increase taxes on individuals, we must increase taxes on business.

[el chupacabra]

Originally Posted by Uncle Skeleton 

No videos. How about you summarize the video. It will take you all of 30-40 seconds...

"Whats business? There is no business to be taxed; there are people. Can I tax the floor, can I tax a building? Only people can pay taxes, so when you talk about a tax on business it has to be paid by somebody. Either its paid by the customer, worker, or shareholder. There's no other way it can come from. This fiction arises that the social security tax is half on the employer and half on individual; that's nonsense, that's book keeping not reality; it's all part of his wage cost."

That's about the first 40 secs. Something I generally agree with. Our tax system is overly complicated. All we need to do if we're trying to be practical is tax the money flow on it's way to individuals and stop pretending corporations are people.

(ie. Warren Buffet plugging Obama for money: I in lower tax bracket than my secretary.
Thats because the money was already taxed; double/tripple tax, very manipulative.)

edit: subego beat me to it

[subego]

Originally Posted by Uncle Skeleton 

When we pay in higher costs, we get to decide whether we (the individual) wants to pay it or not. When we pay taxes, we don't get that option of self-determination. I think there is a large difference there, both philosophical and material. What do you think?

(discl., I did not watch the linked video)

I'd say that freedom has a high enough cost to make it far less valuable than it seems on the surface. Said cost being your decision not to pay the increased prices having a negative impact on the people employed to make or provide it.

Likewise, just as you don't choose to pay your personal taxes, you don't choose to take the reduction in income you're taking because your employer has higher costs from having to pay taxes.

Add to that, when it actually does filter down to the consumer, it'll do so like sales tax, i.e. it's regressive.

[mattyb]

Originally Posted by subego 

If Apple spent that $10B on research and development, even if any of those 50,000 workers weren't paid directly from that money, wouldn't it still help them? At the most basic level, those workers need something to produce or sell, or they are out of a job, so isn't the money spent on things for them to produce and sell ultimately helping them?

Cut that $10B down to $8B. Aren't those workers now being helped less (also known as harmed)?

IIUC, 2 (hypothetical) cases.

1) They can't spend the money on R&D in the US, its outside the US. So, no impact on the US employees.

2) They repatriate the money, pay $2 billion in taxes (or 4 or 5 or even 9). They spend the money on R&D. So, without hiring more people, no impact on the employees.

Where do the employees EVER pay any more or any less no matter what is done with the money? Apple could burn the money and it wouldn't make the employees pay any more or any less.

So, no, they aren't being helped less or even harmed. The money has no impact on what they earn or pay in taxes.

The money does not need to be repatriated for them to keep working, why use that argument? Remember the loan Apple took? Cheaper to borrow than to repatriate.

Also :

This fiction arises that the social security tax is half on the employer and half on individual; that's nonsense, that's book keeping not reality; it's all part of his wage cost

Why doesn't he classify taxes as a 'cost of business'. EBITDA? The interest payments are a cost, why not taxes? You have to pay taxes to have your office building somewhere, surely its a cost to the business?

[subego]

You say the R&D has no impact on what the workers earn.

Let's take the R&D away then. That means the next hot product doesn't exist, which means the workers have nothing to produce.

Does Apple just keep paying them to do nothing, or do they get fired?

I'd say R&D very much impacts what the workers earn.

[Hawkeye_a]

Originally Posted by subego 

I agree with you in principle, but it's sort of (I repeat, sort of) asking you to summarize four minutes of a philosophical lecture by Einstein or Feynman or something. I'm sure I could do it, but there's some serious pressure here.

The reason I linked that video is because:
1. It was a question-and-answer session from college students about this same topic.
2. Friedman was concise, and if i (or anyone) would have to summarize it, some pertinent info would have been lost in transcription. (Unless it was word-for-word)
3. It wasn't a 45 minute lecture/debate.

But, I agree, I should have stated my view/stance and linked the video as a citation for more info, instead of just throwing it out there. I will try to do so in the future.

Cheers

PS>>I'm not sure about you folks, but I personally like to watch debates about such issues instead of reading through them.