The EU-Apple Tax Smackdown


William Murphy | Flickr

The European Union takes a tax bite of Apple. Apple owes about $14 billion in back taxes: So says the EU (Bloomberg). Apple says it evaded, er, arranged to avoid, those taxes fair and square via Ireland — so it doesn’t have to pay. Plentry of other multinationals have been basing operations and stowing profits in low-tax havens like Ireland for decades now. This latest fight is largely a jurisdictional squabble between Ireland, which defends its tax giveaways, and the EU, which wants to govern who pays and who doesn’t. The U.S. government is backing home team Apple. Even if it has to pay, the company’s got it covered, with a $232 billion cash hoard, mostly outside the U.S. How should global companies apportion their profits for tax purposes? There’s an army of accountants for that. But whatever the specific outcome here, there’s a clear message for Apple and other BigCos that slosh money around the globe, seeking maximum return through minimum tax rates: Profits are only possible in a society that supports its infrastructure, financial system, education, and healthcare. Taxes do that. Sooner or later, to paraphrase Bob Dylan, you’re gonna have to pay somebody. The more voters around the world feel they’re not getting a fair deal, the less they’re going to support free-trade policies. However much companies hate paying taxes on profits, they’re going to hate tariffs even more.

We know where that planet-warming carbon comes from. Carbon emissions cause climate change, and 90 companies are responsible for most of those emissions, according to one scientist’s accounting (Science). Also: More than half of those emissions took place since 1988 — the year Congress heard testimony that warming was definitely for real. In other words: Neither Exxon nor any other corporation can say, “We didn’t know.” Richard Heede is the “carbon accountant” who did these numbers, which have, predictably galvanized environmental activists and alarmed the energy industry and its political defenders. Critics say Heede’s work just pins big “kick me” signs on the backs of specific companies, when it’s really those companies’ customers — all of us — who are to blame. On the other hand, as a Heede supporter argues, “if everyone is responsible then no one is responsible.” Figuring out where all the carbon has come from is surely a valid first step toward arresting the catastrophic advance of global warming. If that data threatens the fossil-fuel industry, don’t blame — or subpoena — the messenger.

No algorithm is an island. First Facebook eliminated the jobs of the journalists who were tending its Trending News feed (The Guardian). Then the feed started showing the occasional bogus story, like one that claimed “Traitor Megyn Kelly” had been fired from Fox News (Mediaite). Journalists rallied in protest: This is why live human editors are better than an algorithm! It’s a nice thought, but wrong in several ways. First, Facebook was always up front about having hired those editors specifically to monitor the trending-story-picking algorithm through its infancy. If the company unleashed the code before it was fully trained (Slate), that was a miscalculation, not a betrayal. Second, Trending News isn’t all that important on Facebook, anyway; the real editorial decisions are already made by the algorithm that selects each user’s News Feed posts. Finally, where do those posts come from in the first place? Other human users. Of course, these days, Facebook’s algorithmic rules are hugely important to our informational ecology. But when it comes to people and algorithms, we don’t live in an either/or world; the two are always co-dependent.

Beware the flattening of the elephant. The elephant chart is labor economist Branko Milanovic’s visualization of individual-income trends from 1988–2008. (It’s shaped like an elephant raising its trunk.) Summarizing “the greatest reshuffling of individual incomes since the Industrial Revolution,” it shows that a huge clump of people around the global median income saw significant wage growth in that period. These are the hundreds of millions of people in China and India who have been lifted from poverty by industrialization there. The folks at the extreme end of the spectrum — the top one percent — also saw major income increases. Meanwhile, the people in between, the less well-off populations in the developed world, won very few gains. Milanovic focuses on the broad political impact of such inequality — and the nativist, trade-hostile political forces it incites. Kaila Colbin (in a piece featured in NewCo Shift) draws another conclusion: As the price of automation drops, and it becomes “more economically viable to buy robots than it is to pay people $5 a day,” those people in the middle may lose their gains fast — and if we’re going to cope with that political upheaval, we should start thinking now.

Facebook opens up some image-recognition tools. Many of the neural-network and artificial-intelligence techniques that power more and more of our software tools are proprietary, but there’s also a growing corpus of open-source code in this realm. Facebook just made a major addition to it (The Verge). By opening up its DeepMask, SharpMask and MultiPathNet code, Facebook isn’t just expanding programmers’ toolboxes; it’s adding momentum to the prospect that future AI juggernauts might not all be proprietary.

Inside NewCo: Hayley Nelson, our general manager for media and product development, lays out how we redesigned NewCo’s website and festival pages earlier this year (LinkedIn).

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