Kamala Harris: Trump Committed “Tax Fraud” by Passing Tax Cuts


Posted by Adam Sabes on Tuesday, June 11th, 2019, 3:22 PM PERMALINK

At an Iowa Democratic Hall of Fame Event on June 8, Kamala Harris claimed that Donald Trump committed “tax fraud” by passing the TCJA.

[Click here for video]

“He said he was for working people, then he passed a tax bill benefiting the top one percent and the biggest corporations in this country. That’s tax fraud,” Harris said during the event.

As a lawyer, Harris should know better than to misuse the term “fraud.” But speaking of dishonesty, Harris continues to mislead audiences about the GOP tax cuts, which benefited every income group in every congressional district

Harris is guilty of what the New York Times has described as “a sustained – and misleading – effort by liberal opponents of the law to brand it as a middle-class tax increase.”

When Joe Biden made a similar claim, saying that only high-income households received a tax cut, The Washington Post gave his claim four Pinocchios, noting it was “clearly false.” 

The Washington Post also stated: “Most Americans received a tax cut.”

As noted by the New York Times: “Most people got a tax cut.”

More evidence of the benefits flowing from the tax cuts can be found in a recent H&R Block report, which stated, “overall tax liability is down 24.9 percent on average.”

Over the course of the campaign, Kamala Harris has been running on repealing the TCJA, claiming three times that she’d repeal it “on day one.”

“On day one, we’re going to repeal that tax bill that benefited the top 1% and the biggest corporations in our country,” during a campaign stop in Birmingham, Alabama on Friday.

“On day one, we gonna repeal that tax bill that benefited the top one percent and the biggest corporations in this country,”  Harris said during a stop in New Hampshire on May 15.

While Harris was speaking at a NAACP fundraiser in May, she threatened to “get rid of the whole thing,” if elected president.

See also:

Kamala Harris: I Will Repeal Tax Cuts “on day one”

Biden again says capital gains tax is “Much too Low”

Biden: Capital gains tax “much too low”

VIDEO: Five Times Biden has Threatened to Repeal Tax Cuts

Biden: “First thing I’d do is repeal those Trump tax cuts.”

Joe Biden broke his middle class tax pledge

“Mayor Pete” Calls for Steep Tax Hike on Homes and Businesses

Kamala Harris Vows Repeal of Tax Cuts “on Day One”

Biden: “When I’m President, if God willing I am, we’re going to reverse those Trump tax cuts.”


OECD Hits American Tech Companies with Digital Tax Proposal

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Posted by Andreas Hellmann & Kevin Adams on Tuesday, June 11th, 2019, 2:55 PM PERMALINK

Ahead of this month’s G20 Summit in Japan, the OECD has introduced its roadmap to tax digital companies, the “Program of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalization of the Economy.”

This framework sets the stage for the OECD to rewrite decades of international tax rules and norms to implement a digital tax and to attack American tech companies. 

When many Nordic countries and historically low tax countries like Ireland and Luxembourg came out against the European Union’s digital tax proposal, any hope of a unanimous agreement at the Economic and Financial Affairs Council was killed. For many, this was a sign of hope that Europe’s digital tax, which would target mainly American technology companies, was going to be shelved indefinitely. 

The OECD program is divided into two “pillars.” In the first , the OECD lays out several proposals that would allocate more taxing rights to the jurisdiction of users in situations where value is created by a business activity through participation in that jurisdiction that is not recognized in the current framework for allocation profits. This includes remote participation, which is the true target of the proposal.

For example, if a company is located in the United States and has advertisements on its website that can be accessed in France, these proposals would allow France to tax the company even though it has no physical presence in France. 

The very dominant high tax, high spending  European OECD member countries are strongly pushing for this change, as they need massive tax revenue increases to fund their bloated welfare systems and of course it is easier to tax companies or people who can't vote for or against you. To illustrate the absurdity of this proposal and the dramatic effects on the principle of value creation and the permanent establishment rule, let's look at French wine. 

Under the old rules, the value of this product is created in France, where the winemaker puts all his knowledge, effort and experience in making the best wine possible. Under the new rules, the value will be created when the consumer drinks the wine. 

The OECD proposal develops new concepts of “remote taxable presence” and “taxable income sourced in” (a jurisdiction) that drastically redefine the decades-old concept of nexus to now not require a physical presence. 

A company based in Ireland but that is accessed in EU countries would now potentially be subject to 28 different taxing authorities. This will surely drive up compliance costs and open the door for each country seeking to get its “fair share” of tax revenue. The OECD should operate within the current legal framework, not rewriting the rules to fit an agenda.

Now it is of the utmost importance for countries opposing a Digital Services Tax, dramatic changes to the international tax system and in favor of tax competition to make their voices heard louder than ever, and in the U.S., the Trump administration must further step up its opposition.

Photo Credit: OECD

More from Americans for Tax Reform


Senate Should Restore 529 Expansion As It Considers SECURE Act

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Posted by Tom Hebert on Tuesday, June 11th, 2019, 2:03 PM PERMALINK

Middle class families all across the country use 529 education savings plans to invest in their children’s futures.

These tax-advantaged 529s are tax advantaged savings accounts that allow parents to save and invest after-tax income for education costs. Any money earned through 529 investment is tax-free, making these plans a popular choice for parents looking to save for future education expenses. 

529s are getting more popular as time goes on. In 2018, total investment in 529 plans reached an all-time high of $328.9 billion, and the number of total accounts rose to 13.6 million. As of mid-2018, the average account side is up to $24,153, another record high.  

In 2017, the Republican-passed Tax Cuts and Jobs Act legislation included an amendment from Senator Ted Cruz (R-Texas) that expanded 529 savings accounts to cover K-12 expenses and religious school tuition. This expansion provided real relief for millions of American families and was big win for freedom in education.

Now, Congress has an opportunity to expand 529s even further. Sen. Cruz and Rep. Jason Smith (R-Mo.) recently introduced the Student Empowerment Act. For the first time ever, 529s could be used to cover homeschool expenses, student loan expenses, books, tutoring, testing fees, and educational assistance for students with disabilities. 

Crucially, the legislation expands 529s to cover apprenticeship expenses as well. This expansion would help alleviate the skilled worker shortage in our country by allowing 529 funds to be spent on apprenticeship costs. As with a traditional college, there are many ancillary expenses associated with apprenticeship programs. This bill levels the playing field between students and apprentices by allowing apprentices to use 529 funds to cover these costs.

All of these reforms were initially included in the SECURE Act, retirement savings legislation sponsored by Ways and Means Chairman Richard Neal (R-Mass.). Despite the legislation passing unanimously in the House Ways and Means Committee and having bipartisan support, Speaker Nancy Pelosi (D-Calif.) and Democrat leadership unilaterally removed key 529 provisions from the final bill. According to media reports, Democrat leadership caved to pressure from teachers unions and a “small handful” of radical leftists that oppose homeschooling.

Expanding 529s to include funding options for K-12 and religious school tuition was a big win for American families. Now, Congress has another shot to bring similar relief to even more families. Democrats should stand with American families, not a small minority of special interests, and ensure that 529s are strengthened.

Photo Credit: Flickr - KidTruant


Kamala Harris: I Will Repeal Tax Cuts “on day one”


Posted by Adam Sabes on Tuesday, June 11th, 2019, 11:31 AM PERMALINK

Kamala Harris once again is calling for the repeal of the Tax Cuts and Jobs Act, and says she’ll do it “on day one” if elected.

[Click here for video]

Harris said: “On day one, we’re going to repeal that tax bill that benefited the top 1% and the biggest corporations in our country,” during a campaign stop in Birmingham, Alabama on Friday.

In the past month, she’s called for repealing the TCJA a total of three times.

On day one, we gonna repeal that tax bill that benefited the top one percent and the biggest corporations in this country,” Harris said during a stop in New Hampshire on May 15.

While Harris was speaking at a NAACP fundraiser in May, she threatened to “get rid of the whole thing,” if elected president.

A promise to repeal the tax cuts is a promise to raise taxes. If the tax cuts were repealed:

  • A family of four earning the median income of $73,000 would see a $2,000 tax increase.

  • A single parent (with one child) making $41,000 would see a $1,300 tax increase.

  • Millions of low and middle income households would be stuck paying the Obamacare individual mandate tax.

  • Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.

  • Small employers will face a tax increase due to the repeal of the 20% deduction for small business income.

  • The USA would have the highest corporate income tax rate in the developed world.

  • Taxes would rise in every state and every congressional district.

  • The Death Tax would ensnare more families and businesses.

  • The AMT would snap back to hit millions of households.

  • Millions of households would see their child tax credit cut in half.

  • Millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.

In Alabama, where Harris promised to repeal the TCJA, households making the average income, $48,123, received an average tax cut of around $836.64, according to a recent Tax Foundation report. According to the same report, every congressional district in America received a tax cut.

As noted by the New York Times: “Most people got a tax cut.” The NYT also stated: “To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained — and misleading — effort by liberal opponents of the law to brand it as a broad middle-class tax increase.”

The Washington Post also stated: “Most Americans received a tax cut.”

More evidence of the benefits flowing from the tax cuts can be found in a recent H&R Block report, which stated, “overall tax liability is down 24.9 percent on average.”

In Harris’s home state of California, the report found that residents received a 27.1% reduction in their taxes, on average. In the state where Harris made the tax hike threat – Alabama – residents received a 24.2 percent tax cut on average.

See also:

Biden again says capital gains tax is “Much too Low”

Biden: Capital gains tax “much too low”

VIDEO: Five Times Biden has Threatened to Repeal Tax Cuts

Biden: “First thing I’d do is repeal those Trump tax cuts.”

Joe Biden broke his middle class tax pledge

“Mayor Pete” Calls for Steep Tax Hike on Homes and Businesses

Kamala Harris Vows Repeal of Tax Cuts “on Day One”

Biden: “When I’m President, if God willing I am, we’re going to reverse those Trump tax cuts.”


Podcast: Tax on Pain Medication Is a Tragic Mistake

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Posted on Tuesday, June 11th, 2019, 10:49 AM PERMALINK

Opioid taxes are a misguided policy too many states are pursuing this session in response to the wave of drug addictions and overdoses that has hit the country. Jacob J. Rich with Reason Foundation (Reason.org) joins the podcast to discuss what he's found after diving into research on the opioid crisis and some states reacting with new taxes.


Dems Hold Third Hearing on Medicare for All

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Posted by Spencer Peck, Alex Hendrie on Tuesday, June 11th, 2019, 9:15 AM PERMALINK

The Democrat led House Ways & Means Committee will this week hold a hearing on Medicare for All.

Under this plan, workers, families, and businesses both small and large will see higher taxes and less control over their lives. A single payer system eliminates choice, raises costs, and reduces access by allowing the government to control and ration care. The millions of Americans who currently enjoy their doctors and coverage won’t have a say in this radical overhaul of the system.

According to the Mercatus Center, the plan would cost $32 trillion over the next decade. This would increase federal spending by a staggering 60% in that time frame. That money has to come from somewhere, and unsurprisingly, it will be American taxpayers footing the bill.

The plan has faced two previous congressional hearings in the past month or so, but this will be a heightened level of scrutiny for the proposed government takeover. However, this latest hearing is notable as the Ways & Means Committee has policy making jurisdiction over healthcare and taxation. The hearing should be a chance for Americans to understand the real costs of Medicare for All, seeing as they haven’t gotten many answers thus far.

Democrat supporters in the House have refused to explain how they’ll pay for their plan, let alone tell the American people what kind of tax hikes they can expect. However, self-avowed socialist Senator Bernie Sanders (I-Vt.) has released a list of tax increase “options.”

In all, Sanders’ proposals would lead to $14.3 trillion dollars in higher taxes over the next decade, according to an Americans for Tax Reform analysis. It should be noted that this tax hike wouldn’t even cover half of the overall cost of Medicare for All. However, this would still mean drastically higher taxes on American families and businesses:

A new 4% payroll tax on workers would raise taxes by $3.9 trillion over the next ten years.

The proposal also includes a 7.5% payroll tax on employers, which would cost businesses $3.5 trillion over the decade.

  • The law would eliminate employer-based health insurance, which currently covers about 158 million Americans. This would raise taxes on businesses by $3 trillion by getting rid of the healthcare deduction utilized by employers.

  • The proposal would eliminate Health Savings Accounts (HSA’s), utilized by 25 million American families. “Cafeteria plans” and the medical expenses deduction would also be repealed. In all, these tax increases are a $4.2 trillion tax hike.

  • Increase the top marginal tax rate for individuals and the tax rate for capital gains above $10 million to 70%. The Tax Foundation estimates that increasing these rates would raise $51 billion over the decade. However, due to how much these rates would discourage investment and slow economic growth, it would actually be a net loss of $63.5 billion to the federal budget.

  • The proposal raises the top death tax rate to a whopping 77%. Currently, the tax kicks in at inheritances over $11 million with a rate of 40%. Sanders’ plan would drop the threshold to any inheritance worth $3.5 million with a starting rate of 45%. This would raise taxes on families by $315 billion over the next ten years.

  • The plan also implements an annual “wealth tax” on American taxpayers. This would force Americans to pay an annual 1% tax on assets worth at least $21 million, and would increase taxes by $1.3 trillion.

  • An additional $800 billion in new taxes is proposed by setting a “bank tax” on financial institutions throughout the country.

  • The self-employment tax would be broadened, hitting small businesses with an additional $247 billion over the decade.

Medicare for All would have drastic consequences for American families. The proposal would outlaw private health insurance, thus removing the competition and innovation of the free market. It would eliminate choice for Americans, especially for those who want to keep their doctors. Like the single payer systems of Canada and the UK, it would lengthen wait times and reduce access to care.

Most of all, Medicare for All would immediately raise taxes on the American people by unprecedented rates.

Americans are entitled to answers from the people who want to raise taxes and hand over complete control of their healthcare to the government. This hearing ought to deliver those answers.

Photo Credit: Molly Adams


Michigan Governor Committed to Massive Gas Tax Hike

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Posted by Derek Peterson on Monday, June 10th, 2019, 3:27 PM PERMALINK

Michigan Governor Gretchen Whitmer (D) still wants to impose a whopping 45-cent per gallon gas and diesel tax increase. Recently, on Mackinac Island, Gov. Whitmer took to urging businesses to support her efforts. Fortunately for the hardworking taxpayers across the Great Lakes State, the Republican-controlled legislature is not likely to let this happen.

Michigan taxpayers already face a heavy tax burden at the pump, as is illustrated below.

  Gas  Diesel
State Gas Tax 26.30 26.30
"Other" Taxes and Fees 16.56 17.90
Federal Gas Tax 18.40 24.40
Total 61.26 68.60


To put this rate in perspective, the table below shows the current national average gas tax rates across the country.

  Gas Diesel
State Gas Tax 23.12 23.81
"Other Taxes and Fees 11.12 12.08
Federal Gas Tax 18.40 24.40
Total 52.64 60.29

 

Yet, Governor Whitmer wants Michigan taxpayers to cough up even more. Her proposed 45-cent per gallon fuel tax increase, which would nearly triple the current amount and give Michigan the unwelcome distinction as home to the highest gas tax in the nation, adds up to a $2.5 billion tax hike. Adding insult to injury, only $1.9 billion of this massive tax hike would actually be used to repair roads.

The Mackinac Center for Public Policy, a Midland-based think tank that advances the principles of free markets and limited government, ran a 45 cent gas tax proposal through the State Tax Analysis Modeling Program (STAMP), a Michigan-specific software package.

“The tax increases, it [STAMP] says, would cost more than 22,500 private sector jobs and raise just under $2.5 billion annually by fiscal 2022. It would also increase government employment by 6,300 jobs,” explained Michael LaFaive, Senior Director of the Morey Fiscal Policy Initiative at the Mackinac Center, of the impact that adding 15 cents to the current gas tax in October and then another 30 cents the following October would have on the economy.

Republicans in the House recently rolled out their own road-funding plan that, instead of imposing a massive net tax increase, would dedicate the 6 percent sales tax on gasoline to fund road construction.

Rather than asking the hardworking taxpayers across Michigan to hand over even more of their income at the pump, lawmakers should use existing revenue more efficiently.

Photo Credit: Robert Geiger


The Rise of IRS Injunction Suits Threatens Taxpayer Rights

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Posted by Alex Hendrie, Tom Hebert on Monday, June 10th, 2019, 9:34 AM PERMALINK

The Internal Revenue Service (IRS) has a history of harassing law-abiding taxpayers. Congress sought to address this through legislation in 1998, but problems have persisted.

More recently, the IRS, working with the Department of Justice, has increasingly turned to “injunction actions,” as a tool to go after taxpayers as noted in a recent report by Tax Notes.

The IRS has authority to launch an injunction action against a taxpayer under U.S. Code Section 7402(a). They are typically launched under one of two circumstances: cases involving tax preparers and cases involving suspected tax shelters. In recent years, the IRS has also used Section 7402 to seek disgorgement against taxpayers, which requires the defendant to turn over all money that they have made in conduct associated with the injunction claim.

Instances of disgorgement (and of Section 7402 in general) have skyrocketed in recent years – since 2015 there have been over 40 cases involving disgorgement, while there were just five between 1954 and 2014.

The agency’s increasingly aggressive use of Section 7402 lawsuits violates the pro-taxpayer reforms passed two decades ago. Section 7402 was little used until passage of the IRS Restructuring and Reform Act of 1998 (RRA), a landmark law which created important protections for taxpayers.

RRA was enacted with several pro-taxpayer provisions and curbed the IRS’ enforcement authority, created the Treasury Inspector General for Tax Administration, an independent watchdog office, and codified the Taxpayer Bill of Rights, a document that the IRS must send every taxpayer who faces an enforcement action.

The Taxpayer Bill of Rights guarantees a basic level of service to American taxpayers. For instance, taxpayers are guaranteed the right to be informed, the right to privacy, the right to challenge the IRS, and the right to not pay more money in taxes than you owe.

Section 7402 injunction lawsuits effectively allow the agency to disregard many of these rights. For instance, these lawsuits are searchable on the Justice Department’s website, subjecting taxpayers to public shaming and damaging their reputation   

The IRS has used its broad authority to file injunction suits in complex cases where it is unclear whether taxpayers are at fault. This was the case in United States v. Zak, where the government filed a complaint asking the court to block six defendants from promoting use of the conservation easement deduction. Without alleging any specific facts, the agency made a blanket claim that defendants impermissibly inflated the value of the deduction by overstating the value of donated easements. The government also seeks to confiscate via disgorgement any income the defendants made from facilitating conservation easement donations.  

To be clear, Section 7402 has legitimate uses. For instance, injunctions have been used against tax preparers that have committed clear fraud by claiming false deductions for unwitting taxpayers in an attempt to defraud the Treasury. However, its use should be limited in scope.

Alarmingly, the IRS has been using Section 7402 as an end run around enshrined taxpayer protections and using this provision to subject taxpayers to extensive litigation. Given the increasing use of this provision, it may be necessary for Congress to step in and reaffirm the congressional intent of RRA by updating the law to stop IRS abuse over taxpayers. 

Photo Credit: Martin Haesemeyer


A Look at Controversy Over the Completed 24 GHz Auction

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Posted by Katherine Ryerson on Friday, June 7th, 2019, 4:36 PM PERMALINK

The Federal Communications Commission concluded the auction of the 24 GHz band on May 28, marking the end of the nation’s first set of high-band airwaves auctions to license spectrum for the creation of 5G networks.

Unfortunately, some agencies are trying to scare lawmakers into believing the licensed use of these airwaves will compromise our current ability to predict hurricane trajectories with any accuracy, delaying this greatly needed spectrum from entering the market as has been intended for over two years.

The auction was hugely successful, bringing in over $2 billion to the treasury for taxpayers, and releasing more licensed spectrum into the market for the advancement of 5G. Winning the race to 5G will introduce a new generation of more accurate, more precise technology that will improve the quality of today’s weather forecasts.

Even though the FCC’s extensive tests have shown that operation in the 24 GHz band could be done safely, without affecting weather prediction, the National Oceanic and Atmospheric Administration, the National Aeronautics and Space Association, and the American Meteorological Society continue to claim that licensing of the 24 GHz band could interfere with existing weather forecasting.

Most recently, Senators Ron Wyden (D-Ore.) and Maria Cantwell (D-Wash.) wrote to the FCC asking that the wireless companies with winning bids during the auction not be issued their licenses “until the FCC approves the passive band protection limits that the NASA and the NOAA determine are necessary,” disputing the FCC’s own conclusions that these substantial protections are excessive.

In the two-year period since the FCC began developing the service rules for auctioning licenses in the 24 GHz band, neither the NOAA nor NASA raised any concerns about potential interference with passive weather sensors. It was not until weeks before the auction was scheduled to begin on March 14 that agencies began to speak out against it, demanding additional protections against potential interference.

These claims contradict years of FCC research into the use of the 24 GHz band and the way the FCC currently deals with interference issues, which have so far ensured that the U.S. remains the leader in spectrum policy and the race to 5G without compromising any vital government technologies.

In a Feb. 28 letter obtained by the Washington Post, Commerce Secretary Wilbur Ross and NASA Administrator Jim Bridenstine asked Chairman Ajit Pai to reconsider the FCC’s proposal for the 24 GHz band and “continue the long-standing interagency reconciliation process on this important topic” by attending a March 11 meeting at NASA.

Chairman Pai rejected their request, citing “the absence of any technical basis for an objection over the past two years to the FCC’s well-established protection limits...”

The House Science Committee then attempted to postpone the bidding the day before it began with their own letter to Chairman Pai, asking him to “ensure interference issues are adequately addressed before continuing with the spectrum auction.”

In his response to Chairwoman Eddie Bernice Johnson and Ranking Member Frank Lucas, Chairman Pai wrote that “we have not been presented with any evidence of harmful interference from these existing services nor a validated study suggesting that operations in accordance with these rules would adversely affect use of the 23.6-24 GHz allocation, including for weather forecasting.”

Dissenters from the recently concluded auction are basing their claims on potential interference with little evidence to back their claims. As Joel Thayer of ACT pointed out,“ If this is truly a technical problem, then these agencies can solve it with technical solutions instead of performing political theater to advance policy objectives that stunt the development of this vital resource.”

With the conclusion of the auctions for licenses in the 24 and 28 GHz bands, the FCC has made more than 1,550 megahertz of spectrum available for commercial use. Later this year, the FCC will conduct the largest spectrum auction in our nation’s history, licensing 3,400 megahertz of spectrum in the upper 37, 39, and 47 GHz bands. These auctions, and the huge amounts of licensed spectrum they provide to American companies, help America secure its place as the international leader in the race to 5G.

Significant interference with weather forecasting technology has not been shown to be a real factor. The wireless companies who have paid for their licenses must be allowed to use them to operate in the 24 GHz band. 5G networks in the United States will drive technological innovation in all industries and drastically increase the amount and quality of data we can collect on weather and the environment.

Photo Credit: Michael Foox


Spotify Wants to Use Apple’s Services for Free

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Posted by Bethany Patterson on Friday, June 7th, 2019, 4:08 PM PERMALINK

Apple Music and Spotify are at war for our ears, and Spotify is fighting dirty.

Even though Spotify has been outperforming Apple Music, it has filed a complaint against Apple in Europe, claiming it is engaging in anticompetitive behavior. The European Commission will now conduct an antitrust investigation against the company.

But can Apple’s business practices really be classified as anticompetitive?

The App Store provides a platform where Apple users can easily access millions of apps from all over the world. Though Apple offers its own messaging, music and internet browser apps, Facebook Messenger, Gmail, Whatsapp, Spotify and Google Chrome are some of the most downloaded apps in the store.

The company reviews 100,000 apps a week and approves most of the proposals. Spotify claims that Apple is purposely interfering with the app’s user experience. But the App Store has released almost 200 app updates for the music streaming company, and Spotify’s Apple Watch app is currently leading in the watch’s music category.

That doesn’t sound like a company trying to squash its competition.

The vast majority of apps in the App Store pay nothing to Apple. The company only collects a commission on digital goods and services sold within the App Store, since those sales are processed through its proprietary payment system.

Free apps that process subscriptions within the App Store using Apple's payment processing system (like Hulu or Pandora) pay a 30 percent commission for the first year of that subscription and 15 percent for subsequent years.

Spotify has circumvented this fee by requiring users to subscribe outside the app. An Apple-user who wants to subscribe to Spotify Premium must sign up through the company’s website; afterward, the user can listen to music on the iOS Spotify app. Apple does not collect any commission on these subscriptions.

But now Spotify wants to conduct sales through the App Store without paying for Apple’s payment processing services.

In a blog post, the company’s CEO Daniel Ek wrote that if it were to pay the commission, it would need to raise its prices and therefore couldn’t compete with Apple Music. So Spotify wants to force Apple to either stop collecting commission on in-app purchases or offer other payment options within the App Store.

In other words, it wants to access Apple’s platform, utilize its software tools and use its payment system for free.

The App Store provides a reliable and secure place for apps to conduct transactions. Spotify doesn’t get to call the shots or demand to use Apple’s digital infrastructure for less money, especially since the streaming company is thriving by having users subscribe outside the app.

It’s time that Spotify becomes willing to pay for the services it’d like to use.

Photo Credit: Marco Verch


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