Slashdot Mirror
How Apple Sidesteps Billions In Global Taxes
An anonymous reader writes "An article at the NY Times explains the how the most profitable tech company in the world becomes even more profitable by finding ways to avoid or minimize taxes. Quoting: 'Apple's headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company's profits, Apple sidesteps state income taxes on some of those gains. California's corporate tax rate is 8.84 percent. Nevada's? Zero. ... As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world. ... Without such tactics, Apple's federal tax bill in the United States most likely would have been $2.4 billion higher last year, according to a recent study (PDF) by a former Treasury Department economist, Martin A. Sullivan. As it stands, the company paid cash taxes of $3.3 billion around the world on its reported profits of $34.2 billion last year, a tax rate of 9.8 percent."
Good citizens pay their fair share, so it must be asked: why does Apple hate America?
Pathetic.
Once upon a time Slashdot really was "news for nerds, stuff that matters" - now it's "any excuse to get the word APPLE into a story headline for the SEO bait to get ad impressions up".
Just imagine all the mandates they can fund if they had all this money
Instead of setting up offices in the lowest tax locations, companies should be looking to create offices where tax rates are highest.
After all, give any slashdot reader the choice between paying a lower or higher rate of tax we'd all choose more, wouldn't we?!
We wouldn't? Oh, never mind then.
These are corporate profits. Whoever actually owns the company still gets taxed on any of the value that they sell or get dividends on. So apple's rate may be 9.8%, but most people who get the remaining 90% still pay more taxes. Just not usually in the same year.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
Good for Apple.
sig has been sent away for a few small repairs...
I mean, I know it's the fashion to bag Apple now they're the biggest company in the world, but I thought it was common knowledge that virtually all big companies do everything they can to avoid taxes. In fact, I don't see how it's much different from pretty much every individual in the USA trying to pay as little tax as possible either. If an accountant said, "Oh hi there, I can help you avoid $3000 bucks in taxes and it's all legal" what would you say, no?
No, it would be the same as it is now, they'd just locate their facilities elsewhere. Whoever wrote this is an idiot who doesn't know anything about how businesses make decisions.
Apple has a fiduciary responsibility to avoid as much taxes as legally possible. This is more indicative that the laws are not written correctly, rather than that Apple is doing something "wrong". Of course, congresscritters might be hesitant to fix these loopholes, since a lot of their sponsors directly benefit from them. In fact, that may or may not be why they are there in the first place, but the saying "don't attribute to malice what you can attribute to incompetence" probably holds here.
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Yawn.. lets examine MS or IBM, or any major global company. about 10% tax? sounds a little high, there are business execs who pay 5%.
There was an unknown error in the submission.
this is truly shocking news, I must warn the masses!
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
I would be happy to overlook this if they forwarded just a low 0.01% of that 2.4 billion to me!
http://faazshift.blogspot.com/
Why exactly is this a story. Replace Apple in the headline with a * where * means any major corporation. I mean Microsoft, Google, Samsung, Sony, and all of them do it.
21st Century Renaissance Man
Oh look, another story that is actually about virtually every major company in existence but it's turned into a story by replacing "every company" with "Apple" to make it sensational and generate page views. *yawn*
So is the implication that there is tax evasion, fraud, or perhaps some other unsavory conspiracy afoot? I'm betting that Martin A. Sullivan has resorted to such tactics as itemized deductions and other writeoffs, and perhaps... well, I don't want to make any accusations here, all I'm saying is Mr. Sullivan really doesn't *have* to employ such tactics, and he could give up more of his (hard?) earned money to his state and federal governments. In the same way he implies that an evil corporation (my words, not his) is dodging taxes, I think he may probably, almost definitely, be involved in that kind of activity as well. Why would he want to deprive , say, the IRS of his money using legal means to limit his tax bill? Does he hate America?
Remember, the IRS happily accepts donations, as I'm sure other state run tax collection/enforcement agencies do as well. So, please, feel free to donate! They do accept donations. Feel free to give 'em more of YOUR money. Or you could, I don't know, use every available legal means at your disposal to limit your tax liability, seeing it's YOUR money, and YOU earned it.
Similar to organic food, the US Treasury could offer companies a stamp for their products indicating they pay their share of taxes. It could be a picture of people dumping te--cash into a harbor.
Cue the red/blue cultural war in 3...2...1...
One thing that makes me nervous about too much concentrated wealth is that orgs and zillionaires use it to buy political influence such that we no longer are a democracy. This is one reason why a larger portion of our GDP has been gradually shifting toward the wealthy since WW2.
If one can find a way to put a check on this, then I wouldn't be so nervous about it. The Citizen's United ruling didn't help.
Table-ized A.I.
Looks like they need to try harder, they must be paying one of the highest rates for a multinational corporation.
OT Why can't I log in via the drop down box at the top right, does it not support user names with spaces?
Wait.. Apple paid ~10% in federal taxes? But I thought 'Merica had the one of the highest corporate tax rates in the world and companies were fleeing to banana republics to avoid them!!
So many injustices..so little time..
Look at what certain other companies pay and 9.8% seems quite high (the example that springs to mind is Vodafone who pay close to 0% in the UK despite taking in a fair amount of income over here, though I'm not sure what their global aggregate tax rate is).
High paid individuals too. The best known example there being Bono who is now essentially Dutch, at least for tax purposes. I suggest he take the next step like Hotblack Desiato and be dead for tax purposes! (I can't promise it'll be quick and painless, but I've got a perfectly serviceable bat I'd be willing to help him out with)
This really isn't "news". It happens all the time, it has done for as long as there has been corporate tax, and you could no doubt find far better (or worse) examples than Apple with little effort.
Just because you think every penny spent or earned is yours does not make it so, or a good idea.
What? You mean that if I work whole day digging a ditch, that labor does not belong to me? You are saying I'm a slave?
My labor belongs to me; it is mine. (A simple test: I can choose to not work.) For the good of the society we choose to donate some of that money to the state, to be wisely used for specific purposes that are defined by law [*] We call this money "taxes."
[*] Unfortunately, for some reason that also includes $500K vacations of members of Emperor's family.
Microsoft complains that the US laws and taxes were too stifling, so whined that if the laws were not changed they would take their toys and move to a playground in Canada. Apple works within the rules and innovates methods to minimize the impact.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
But I can't hate them for this -- every single corporation in existence does this, and until the laws are changed to better handle it, I don't fault companies for doing whatever they can to take advantage of them.
Apple gets to leverage our legal protections and infrastructure for free. This is why corporations should be paying taxes and not just written off because they hire people. We have to hire armies of accountants to deconstruct their obfuscated tax returns, stretch out our infrastructure to support their sprawling campuses, and accommodate all of the lawsuits they fling back and forth between each other.
I swear to God...I swear to God! That is NOT how you treat your human!
Stupid point: Apple is choosing to incorporate where the taxes and laws are most favorable
Thoughtful point: Apple is using multilayer international tax law in order to reduce the lion's share of their taxes.
Rich Liberals (Bill Gates, Warren Buffet, GE, Apple) talk a good line about how we all need to pay our fair share (i.e. always more than we're paying now), and they become Good Liberals for saying so, but they never walk the walk. Buffet has been fighting a full billion $ that he owes for the last decade. Gates doesn't write checks for above his minimum tax, but instead employs highly paid accountants to minimize his taxes. GE hides profits overseas and you just read all the twists, turns, and contortions that Apple goes through to avoid US taxes -- yet we celebrate them as a company and continue to buy their overpriced trinkets manufactured by outsourced overseas jobs.
But do we ever hear about all of that? Hell No! We only hear that ROMNEY (who is paying his lawful rate) DOESN'T PAY ENOUGH TAXES!
We are clueless as a society overall. In Pogo terms: We have met the enemy, and he is us.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
the government sees you and your earnings as its own property. They are only asking themselves one question: how to maximise the government revenue, while the only question they should be allowed to ask is this: what is the bare minimum that gov't is allowed to do and how much should it cost.
And the answer is: it depends. capitalism helps rich people increasing their wealth, while the poor get poorer. Democracy is an antidote, since the many poor can force some wealth redistribution through taxes. And we should be glad this mechanism exists, since when the poor gets too poor to buy what is produced, the economy collapse.
Telling that taxes should be low is not a natural truth, it is a political opinion, and depending on the economical situation, following that route may be harmful for everyone
fuck that, I'm going AWOL now.
Vote with your feet. America is a country with 49 other options for you besides NY/NYC. Quit griping and show them that they and their unions simply aren't worth the price any longer.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
In the UE we are just discovering how harmful is mandatory free capital movement across states with different tax rates. What surprises me is that the USA managed to remain an union for so long with such a system.
Keep in mind that every company has to recoup its costs which includes taxes. If a wand could be waved to ensure all computer manufacturers paid higher taxes, you would see higher computer prices, not lower profits. Those higher taxes come out of your pocket, not the company's. Apple's prices are set according to what the market will bear relative to their competitors. If taxes on all computer manufacturers increase, so will prices.
Huh? Since when is Netherlands a low tax place?
I suspect a journalistic error here. Maybe the author meant to say Netherlands Antilles, the Caribean island nation?
The Netherlands though, has some of the highest taxes in the world.
Try 21 percent sales tax, 52% income tax and US$9.28 per gallon gas (most of which is tax).
Corporate taxes are not much lower.
Bram Stolk http://stolk.org/tlctc/
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
Now, you may think the law should demand more. I would disagree with you. I don't resent Apple their ability to avoid taxation, any more than I would resent a friend who managed to escape a thief or mugger with minimal damage or loss.
I believe that line was actually referring to people who had done none of the work to earn those pennies, but instead believe it to be theirs to do with as they please despite having nothing to do with its production.
We should just lower taxes. Sounds counter intuitive, but it's true. A lot of companies move their administrative operations overseas because it is cheaper to do so. Not because the labor is cheaper, but because other countries have a lower tax rate. Our statutory tax rate is the highest in the world.
If we made our tax rate more competitive, you'd probably see those operations heading back. Not only that, but you'd see companies in foreign countries end up incorporating over here, and we'd be the ones collecting that tax revenue. In my opinion, 10% would bring a ton of corporate interest in our direction. Let's not stop there though, let's remove all possible exemptions. All of them, including green subsidies (remember, this is part of the reason GE pays no taxes, not only that but green subsidies haven't done a damn thing to improve green tech, and let's not even get into Solyndra.)
As it is right now for the large corporations, we collect virtually zero income tax. Instead Ireland and Bermuda collect that money.
The only alternative to this is forbid transfer pricing. Obama tried to do that, and a bunch of companies said they would just move their entire operations overseas in order to remain competitive. When that happens, the jobs go bye-bye and you lose even more tax revenue, not to mention piss off your constituents. So naturally he backed down.
If you don't believe that raising taxes can lower revenue, think again:
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/15/AR2006071501010_2.html
France's opposition Socialist Party leader Francois Hollande said recently that his party's -- and his country's -- opposition to proposals to lower high-income taxes has nothing to do with disdain for the wealthy. "I don't have anything against rich people, as such," Hollande said in a recent political debate. "They have the right to be rich. But I can't accept that the richest can have their taxes lowered."
"This tendency to take from the rich and give to the poor which is supposed to solve all the problems in France is ruining the country," said Alain Marchand, who left France six years ago and now has a London-based consulting business that helps relocate French business leaders and entrepreneurs in England and other countries. "That's an incredibly stupid and narrow-minded vision of economic life."
Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
Yeah that'll raise revenue real fast.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
Most of the loopholes require a lot of money or assets.
It's kind of hard to live off of cash you borrowed against your stock holdings if your stock holdings are worth less than your living expenses.
And moving your money to an off-shore tax haven only makes sense if your tax savings would be larger than the accountant's fees you'd have to pay to do so, plus the amount of the risk of any changes in the tax code here or there.
Instead of just looking for loopholes how about LOBBYING to get new loopholes added specifically for your company or situation?
The average middle-class citizen does not have the money to lobby Congress for changes to the tax law that will help him.
So why do corporations and the wealthy get to do so?
Apple's legal and finance departments know their stuff, and the company is fulfilling its fiduciary duty to the shareholders (like me). I don't see why the legacy media dregs at the NYT have any issue with that, but who cares what they say?
Every dollar that Apple can keep out of government's hands is a dollar that won't be spent on killing people I have no quarrel with, paying goons to grope old ladies, or harassing terminally ill patients who need pain relief.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
It's not like Apple's the only corporation guilty of evading criminal amounts of taxes. Google never pays higher than 5%, News Corp never pays more than 2% (the same guys who use Fox News to complain about taxes being too high on the rich), General Electric paid nothing and got $3 billion in tax credits, oil companies receive stupid amounts of subsidies, Amazon still ignores most sales taxes, Microsoft always pays in the single digits as well; the list goes on and on and on. Over 2/3 of major US corporations have NO tax liabilities.
Yet these same corporations still pay MOST of the taxes they owe in other OECD countries. The difference between the US and the rest of the developed world is that we're the only country with a tax system that considers GLOBAL business activities liable to taxation (obviously there are exceptions in other countries, such as INCREASED taxes for foreign employment or pollution). Other OECD countries only tax businesses based on DOMESTIC business activities. But in order to avoid having our global taxing system cause foreign business activities from having negative net profits from piled tax rates, Congress throws in a bunch of loopholes to negate the whole thing. Only it ends up negating almost all taxes on domestic activities too. This isn't an accident.
that's borderline illegal AND morally corrupt.
No, the moral issue is the taxation. Your diatribe above presumes that a company's revenues belong to the state.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
and have the arrogance to think you don't owe anything to anyone.
Sums up a lot of what's wrong with things, ATM.
Apple gets a tax break on those discount cards disguised as 'advertising expenses', just another 'cost of doing business'.
Understanding the scope of the problem is the first step on the path to true panic.
Higher then Japan.
So if you actually made Apple and Google pay US taxes... they'd leave the country. And then instead of getting whatever they were paying plus employing all those people at fairly good wages and taxes those wages... You'd get nothing.
Choose. Stop attacking companies for finding ways to do business in the US. Instead, try to find out why so many companies have left or are leaving and try to help them come back and stay.
We need employers. Companies provide the jobs. If you want a job... you want companies. Stop attacking the companies. It's just going to make unemployment go higher.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
And that only applies:
1. If corporations are people
and
2. If money is speech
I disagree with both of those.
I don't care what the SCOTUS says.
They have been wrong before and they are wrong on those issues.
Why should california get a share of profits not made in california? Apple already supllies a large number of high earning employees that pay a high income tax rate, and if california has waived any other sort of taxes in order to have them headquarter there, then california has already worked out they will be better off with all that income tax minus the land and property taxes they waive, than without any of it at all. But why should california get to tax the profits earned in nevada? This is why states having corporate taxes is dumb, there should be a federal tax that is distributed to the states, in a fair and equitable way.
Not like it is done here in Australia. Here the government takes the taxes paid by some states and gives it to others. There might be a justification to give a better share to poorer states, but here it is taken from the big earning states that don't have great infrastructure and given to the ones that are the most developed! apparently they can't pay for the upkeep of all the nice stuff they have bought.
Oh, you mean Congress. I get it.
Carry on.
Understanding the scope of the problem is the first step on the path to true panic.
I wanted to mod you up, I enjoyed your passion, but I so want you to look at your reasoing.
I am not defending Apple, it is about time you all noticed that Apple is given a pass by the media for using the legal loopholes that other companise are villified for.
--
Where do you git off blamming Apple or any other corporation for the disgusting acts of congress and the senate?
Those insane loopholes were mostly created years ago and are constantly polished by your elected officials to continually encourage donations to those self same public officials.
--
You want to blame the person responsible?
Look in the mirror, then start voting like the future matters.
No brain, no pain.
Really? Apple is not the only company who does this to leech every single cent it possibly can without "playing fair", but besides that this is the company who's douche in chief would buy a new car every 6 months just to avoid whee taxes, or denied claim for years on his own daughter living in pretty poor conditions even going as far as saying
"sterile and infertile, and as a result thereof, did not have the physical capacity to procreate a child."
partly to not pay up, partly because he had zero responsibility to anyone but himself. You think he gave a shit about federal taxes, or what corporate culture that grew into?
Why bother changing now, nothing has been done, nothing will be done, apparently it works, and the second anyone suggest's that they pay up it gets spun into "killing American companies/jobs with the ternary of socialism"
now get off my lawn
Anyone got the stats for what Taxes they pay here? Id really like to know
Not doing this would be a breach of fiduciary duty. As a shareholder, I would not approve them putting themselves at a competitive disadvantage by not using tax optimization permitted by law. As a citizen, I want the loopholes closed, however, so that everyone plays by the same rules.
Government exists to promote business and commerce. Commerce doesn't exist to promote government.
I like to use the following analogy. I need cholesterol to live. That doesn't mean I should eat a Big Mac every day. Governments get plenty of money to do their core responsibilities already.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
How much money is needed to sustain the country? 40% of GDP? 50%? What's the number?
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Sigh, did Apple do ANYTHING illegal?
If , we the people, don't like corporations doing such as this then change the law.
Until then we just need to shut the fuck up.
you are a hypocrite, you want tax loopholes closed, but only if it doesn't effect your personal investments.
that, right there, is the fucking problem.
This is the exact line of reasoning that caused the .com bubble.
Where did I say anything about my personal investments not getting affected? Closing loopholes would certainly affect them in the short term. Depending on which loopholes are closed, they might even decide to bring more manufacturing back to the US. I would gladly pay a few extra bucks for that.
If Apple broke the law, sue them. If they didn't—STFU and call your congresscritter and tell them to close the loopholes. If law allows this, they aren't doing anything wrong. Moreover, they'd be doing wrong if they did not do this, because all of their competitors are doing this, some (Amazon, anyone?) even more aggressively, and I don't see a reason why they should pay a dime over what the law requires. Heck, some companies pay _negative_ taxes in this country. That is, IRS pays them for the privilege of their doing business here.
Speaking of hypocrisy, when you filed taxes this year, did you take all the deductions? How about paying a little more in this difficult time? IRS lets you do it, after all.
Wait, the US has the highest corporate taxes... but corporations don't have to pay them?
I'm not clear what point you're making.
Vote? Even if there were real, viable choices, have to do more than vote. The Democrats are only slightly better than the Republicans. Democrats are merely corrupt. Republicans are corrupt and crazy. Don't think voting is enough to excuse you from being reflected in that mirror. Politicians can't afford to be honest if we won't back honest players.
I see people still banking at Bank of America, Chase, Wells Fargo, and Citi. Still buying from Apple, Microsoft, MAFIAA members, GE, BP, AT&T, Comcast. Still gambling that health insurance won't deny and drop us the minute we need it. We could destroy these companies astonishingly fast if we'd all just quit doing business with them. They wouldn't be so stupid as to push it that far. In mere days, they'd crawl on their bellies begging us for forgiveness, and they would quickly do all those things that they claim are so difficult to do, such as paying taxes, resisting the temptation to buy legislation, reducing executive compensation, treating customers fairly, and making up for mistakes. They do appalling things, and people shrug it off, or bend over and take it.
I'm in a little battle with a local city. They're operating one of those red light cameras programs. Naturally, they have rigged things to cause lucrative violations, rather than reduce them. They carefully chose intersections for which the yellow was already too short so they could truthfully claim they didn't shorten any yellows. How can I make them wish they hadn't done it? I went to a hearing with evidence that their yellow lights were too short, but no joy. Judge told me I could take up the matter at a later date in municipal court, as if going to a hearing scheduled at their pleasure wasn't already enough of an imposition on me. I declined. Now I don't shop in that city anymore. How many people have joined me in this boycott? Zero of course. I've tried to persuade others, but all that does is get them thinking I'm crazy for making such a big deal out of a petty traffic violation. A few concede that I've got a point, but still won't do anything. I should pay up, shut up and stop annoying others with my whining, and get on with life. Then some turn around and mutter about their cell phone contracts, or the cost of cable TV. Even the ones who also have been burned by these red light cameras still won't fight. Some even rationalize it, convincing themselves the system is fair.
An effective approach to clean up bad neighborhoods is a zero tolerance enforcement and clean up operation. Litter, graffiti, broken windows, and burned out lights no matter how trivial are all cleaned up and repaired as fast as possible. Serves notice that petty crime is not going be overlooked. The same would work against these corporations and governments. Don't let a red light camera ticket go because it's only a little money, and too much trouble to fight. We blow off even the most insane EULAs because we feel pretty good that most of the nonsense in there can not be enforced. We should instead make software companies clean that crap up. No EULA at all. At least we fight back against DRM.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
Morality and legality, while often related, should never be equated. One example is marijuana. Illegal, but you'd be hard pressed to make a negative morality statement regarding its consumption. How about speeding? Pick any victimless crime. It's not moral for Apple to avoid paying into the government, whose benefits they've enjoyed for a long time, forcing everyone else to make up the difference. It's essentially stealing from everyone else, legal or not. Besides, if not for the government, Microsoft or IBM would have crushed them two decades ago.
Yeah, because a percentage is a size you can compare to other percentages independent of what they apply to... For instance, U.S. unemployment at 8.2% is higher than the U.S. military expenditure as fraction of GDP. But what conclusions can you expect to draw from it?
Do you know what makes taxes rise and rise and rise?
Exceptions. Tax breaks, deals, whatever you call them. For everyone who doesn't pay his share, everyone else has to pay more to get the same total.
Some economist in Switzerland - certainly not a country you could accuse of socialism - made a study years ago that we could cut both corporate and personal income tax to a flat 25% if everyone paid them in full. Right now, the highest income tax bracket in my country is 49%. But the more money you make, the less you actually pay, because there are more and more ways to dodge it.
Assorted stuff I do sometimes: Lemuria.org
Microsoft, Xerox, Amazon AND Google all do something similar.
http://www.huffingtonpost.com/2012/04/17/apple-corporate-income-tax-rate_n_1429955.html
"Apple paid a top tax rate of just 9.8 percent in 2011, the report says. Google paid a rate of 11.9 percent, while Yahoo paid 11.6 percent and Microsoft paid 18.9 percent. Xerox paid 7.3 percent of its income in taxes, while Amazon paid only 3.5 percent, according to the report."
As far as I know, Google has been doing this for a long time (somewhere short after it's founded I presume?)
It is just how the corporation world goes with the current laws and regulations, nothing immoral. You can't stop companies from moving their manufacture to the low-labor-cost countries, similarly, you can't prevent the companies doing this to reduce the tax bill. As long as it can keep the company strong (by cutting cost) and is legal, they will (have to) do this to stay competitive and (more) profitable. It's like water will eventually settle to the lowest spot they can flow to.
$2.4 billion higher last year, [...]. As it stands, the company paid cash taxes of $3.3 billion around the world on its reported profits of $34.2 billion last year, a tax rate of 9.8 percent."
Actually 9.6%. But if it had paid that additional US tax, it would have paid $5.7Bn on profits of $34.2Bn, which is 16.7%
Personally, I think about 10% is a fair and reasonable corporate tax rate, and 16.7% is too high.
But then, I think 10% is a fair and reasonable personal income tax rate...
For instance, U.S. unemployment at 8.2% is higher than the U.S. military expenditure as fraction of GDP. But what conclusions can you expect to draw from it?
The conclusion that you don't have a clue what real unemployment is like. Spain has 20%. Ireland has 17%. Even that is survivable. Once unemployment goes over 50%, you're headed towards social collapse; the same applies if your military budget exceeds 50% of GDP.
8.2% is unpleasant for the country (and of course disastrous for the individuals affected), but it's not a catastrophe.
Amoral and immoral are different.
Contribute to civilization: ari.aynrand.org/donate
Here's the simple reason why corporations engage in the behavior outlined in the New York Times article: _our income tax system based on Title 26, the Internal Revenue Code, encourages such activity_.
Thanks to all those complicated loopholes in the Internal Revenue Code and all the additional rulings that add up to around 70,000 pages of tax code, this is why you have millions of jobs, thousands of factories, hundreds of corporate headquarters, and possibly as high as US$15 TRILLION (!!!) in American-owned liquid assets out of the USA for tax avoidance reasons. Maybe it's time to gut the entire tax code and start all over again in one of two ways:
1) A 17% flat-rate no-loophole income tax, where the only loophole is a very generous initial earned income (wages and pensions) exemption to protect lower-income taxpayers (e.g., as high as US$46,000 for a two-adult/two legal dependent family), and get rid of the alternate minimum tax, estate tax, maybe the FICA tax, gift tax, marriage penalty, self-employment tax and taxation on bank account interest, capital gains and stock dividend payments. This is what Steve Forbes proposed back in 1996.
2) Completely phase out the income tax in favor of a 23% national consumption tax on all new goods and services sales, where business-to-business sales, used good sales, and college tuition are exempt from the tax. To help lower-income people, any legal household will get a monthly payment to cover the cost of the tax up to the Federally-defined poverty level (US$580 per month payment for the family I mentioned earlier). This is the FairTax proposal, H.R. 25/S. 13.
Under both of these proposals, American companies have all the incentive to keep as much of their liquid assets and operations in the USA as possible, since it is tax-advantageous to do so. An it also means vastly lower yearly tax compliance costs, meaning hundreds of billions of dollars spent per year in tax compliance are now freed up for more productive activities. In short, such a change will result in the next American economic boom.
No, the moral issue is the taxation. Your diatribe above presumes that a company's revenues belong to the state.
No, THAT is not the moral issue.
Nor does my "diatribe" presume that the entire company's revenue belongs to the state - what you seem to be implying there.
Also, sorry for the typos in the original post. It was almost 4 AM here, so my "immoral" came out as "amoral".
Thrust naught the spell checkered at fore 'ey am.
Company (just like the state) exists first and foremost in order to provide a service. That is their REASON for existence.
While the state exists solely for the reason of providing services to its CITIZENS, as it is an extension of those citizens who all have a right (and a duty) to take part in its work and in benefiting from that work and the said services - a company, be it a two-men operation or a corporation, has a different GOAL.
Note the difference there. State's reason for existence AND its goal are service to its citizens.
Company's reason for existence is the ability to provide a service to its consumers, but its goal is making a profit.
Now, for a "human machine" like a state or a company to function it needs resources.
Raw goods, money, time, people. All of that belongs to only one species on this planet - humans.
In case of the state, those humans are called citizens.
They voluntarily join together, equally investing their trust (through voting) and their time/money through taxes in order for the state to exist so that it could provide services TO EVERYONE, far beyond the means and ability of every single one of those humans.
Paying taxes, just like voting, is not a burden or immoral.
It is a duty and a privilege of functioning members of the society willing to contribute their part for the good of ALL.
Now... If the state becomes immoral, contributing to such a state would by extension be immoral.
BUT... citizens still have that other tool for taking a part in the workings of the state - voting.
So, if you find the state going immoral on you - vote for it to change. Or roll up your sleeves and join public service.
Or even break your contract with it, but then you're on your own and it still posses the mandate given to it by everyone else.
In case of a company, there is no such thing as citizens.
Companies deal with CONSUMERS. People buying company's products and services.
And no, shareholders are not "citizens" either. They are also consumers - only they are buying profit instead of products.
And they don't have an equal share in the dealings of the company. They don't get to vote the way citizens do with the state. More shares, more influence/votes.
Nor can they "join the service" of the company and be "elected" in order to change the course the company is taking if they find it amoral.
Their only way of influence on a company is through money - that is the language the companies speak.
Which is by definition amoral. Money has no morals. It's neutral.
But, as companies still exist in the real world, they are forced to use the resources of the state, which is to say resources of the PEOPLE making the state.
Be it simply roads, protection by the army and police, legal framework, education etc. or more direct resources which belong to everyone - raw materials like ore, water, air etc.
The only way for companies to pay for the use of those resources is through taxes.
And no, they can't build their own road and hire their own police/army. The land the road is built on belongs to ALL those future generations - i.e. the people.
And private police/army is illegal and immoral in so many ways I don't know even where to start.
When a company chooses to break the contract it has with the society, by avoiding payment for the resources it uses - that's immoral.
No question about it. It can't be on moral grounds - companies don't have morals. They run on money. Amoral.
Company breaks a contract - it's because of greed. Which is immoral.
States, being extension of their citizens, can be both moral and immoral.
Citizen breaking a contract with the state can have both moral and immoral reasons for doing so.
Perks of being a human.
Mit der Dummheit kämpfen Götter selbst vergebens
I know... Sorry about that... It was 4 AM here.
I did catch those "flash and blood" typos I made though.
Mit der Dummheit kämpfen Götter selbst vergebens
The US tax system is truly progressive. If you live on a coast (high tax area), make low to mid six figures, expect to lost 40% of that to income tax, if you can't shelter anything or run it through a corporate entity. If you have a really good year, expect to hit AMT, a tax device designed to hit the Romneys in 1970 but left unindexed so it now hits the upper income professionals. Once you break through (think warp threshold) from merely well off to truly rich, THEN you get the 15% tax rates of the plutocrat. It is almost as if they don't want you to break that barrier, from the top 10% to the top .5%.
Until then, between income tax, obscene property/school taxes, etc, about half of your income will be tossed right out of the airlock into the vacuum. Oh, and if you choose to live somewhere (on the coasts) with cheap property taxes, you will have to do private school for the children, as we've de funded the concept of good education for all, and must choose housing based on school ratings.
So, when a mega corp, of any stripe, legally evades taxes, those of us with less ability to work in the Cayman Islands and offshore our household expenses to Ireland will be unhappy-or envious.
"that's borderline illegal AND morally corrupt."
That's practically speaking redundant. "borderline illegal? Something is legal or not (as determined by court). The term implies immoral already.
Why don't you say "The tax law is immoral" because that is what you are ACTUALLY saying. Of course it's easier to dump on people doing what their elected officials purposely design the tax law to allow them to do then the actual elected officials.
Way to miss the point: I picked two statistics more or less at random, that one of them was unemployment is irrelevant to my point, which is that the person I responded to cannot compare the percentage numbers of Apple's tax burden and Apple's share of the content price in their store.
That's fine, Tom.
That's why we had tax rates in the 70s around 70 percent.
The tax rates came down when the exceptions went away.
Today we have people saying our tax rates should go back up to where they were in the 70s. And that's fine, that means we have to add the exceptions back in again.
See, it's a two way street. It's a chicken and egg situation. If you raise taxes, then more exceptions are going to be put into the tax code.
If you want exceptions removed, you're going to have to lower taxes.
So if you want to do a straight swap of a lower tax rate for fewer exceptions then you have a deal.
However, what we've seen is that deal is rarely offered. generally, the government wants to raise taxes and remove exceptions. Simply, No.
As to Switzerland, it is a socialist country. They have as much socialism in Switzerland as they do in Sweden.
As to everyone paying their taxes in full, half the country pays no taxes at all. If you force EVERYONE to pay a flat 20 percent with no exceptions then you'd actually make MORE money then what you're making now. The US government is currently pulling in about 17 percent of GDP.
This said, if you're taking our exceptions away which we use to protect ourselves from bad government policies, you would need to sign in blood that you aren't raising the rates and that you're not going to except anyone from the taxes for any reason.
If a guy has ten cents total... he owes two cents. That doesn't mean we can't give him assistance so he can be comfortable. It means he owes two cents.
If everyone pays their share the system is sustainable. But this includes EVERYONE including the poor which currently pay no taxes at all.
What I'm offering is a flat tax. People would agree to it. People will not agree to more games from money grubbing government officials that just want more money to waste. A flat tax would be fair. Everyone pays the same percentage of their income... no exceptions.
As to corporate taxes, here you might want to really consider not even having them. We'd make more money by taxing employee income then we'd make by taxing the corporations directly. A lot of corporations will just leave. It's just smarter to attract them to your country so they provide jobs.
Look at Ireland versus Greece as an example. Ireland has lots of major fortune 500 companies to say nothing of investment from Japan and china. Greece has none of that. Why? Basically no corporate taxes in Ireland.
Are these companies escaping their obligation to the Irish people? No. They're providing hundreds of thousands of jobs. That's more then compensation.
Look, corporate stock is already taxed... so corporate taxes are a double tax on the same profit. The system would make more sense if stocks weren't taxed or corporations weren't taxed. They're taxed twice. So playing some games to avoid taxes in that circumstance is reasonable.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
He had another thing he did. Not only did he park in the handicap spot, ever notice that most of the cars he drove had temporary window decals? No permanent license plates? He worked a deal with a car dealer to "sell" him a new car every 60 days. He would trade in the "old" one, and get temp stickers for the vehicle. He never registered it, and so the tickets never went anywhere. Not to mention never having to register the vehicle with California. For all the "love" the fanboi's have of Apple Steve (blow) Jobs, he was what you might call the "typical" corporate asshat. Would do anything to squeeze a penny out of something and treated most employees like dirt.
and for the same reason, tax evasion.
To pile insult upon injury, during a campaign for a bond issue Gates and Ballmer chastised Washington voters to "pay their fair share".
Read the disgusting news: http://realwashingtonstatebudget.info/
Running with Linux for over 20 years!
Apple does indeed avoid as much tax as possible just like every other corporation and most, if not all, rich people. I understand you want to grab attention for this submission but it's completely stupid.It shouldn't have made it on the site.
I hate apple very very much, but this doesn't bother me. I guess the headline should be "Apple uses legal means to save money" instead of the claptrap it is now.
There is a raging debate about why city console rolled over and gave the richest corp in the US huge tax incentives to expand their campus here.
Its just more of the race to the tax bottom. Easily fixed if we just instituted minimum national tax rates for fortune 1000 corps, and figured out a way to actually have tarifs (to avoid having the whole company offshore everything) again.
We actually, know how to do this, because we did it in the past, and it made the US the most economically powerful country on the planet. The problem is the fools proclaiming free trade for all, and the politicians that base everything on dogma rather than trying to determine what has actually worked in the past, and repeat it. Sort of like the idea that trickle down economics actually works. It keeps being done, and every time the excuse why it failed is because we didn't have enough of it.
If the US lowered their tax rate to be roughly equal with the jurisdictions companies are allowed to shift profits to, they would have no reason to shift those profits.
That's a nice idea in theory, but in practice the only tax rate any corporation is happy with is basically zero. Take Google in Ireland for example. Ireland's corporate tax rate is 12.5%. But Google doesn't want to pay that. So it uses the Double Irish and the Dutch Sandwich to dodge several billions owed, bringing Google's effective tax rate down to 2.4% (ie, only ~20% of the theoretical value). You really think that if the US lowered its above-the-line corporate tax rate to 12.5%, mega-corporations such as Apple wouldn't still be trying to think of ways to get out of paying the full rate?
Da Blog
No one's assets belong to the state, but entities which thrive because of state policy absolutely morally owe compensation to the society which helped them thrive, and other state programs are often the mechanism in our society for that sort of compensation. Are there better ways? Absolutely. But crying "taxation is theft!" rings hollow when the state is creating policies in your favor.
Who would that be? We've almost all contributed (in the form of taxes and withholding) to the growth of Apple (and other huge corporations) by funding the government which gives them a favorable environment in which to profit. While it would certainly be better to just end corporate welfare, in the meantime we are definitely entitled to a portion of the gains we helped promote.
As to Switzerland, it is a socialist country. They have as much socialism in Switzerland as they do in Sweden.
Yeah, right. I tell you what they do have that America (and lots of Europe) doesn't anymore: Democracy. And that means - shocking, I know - that the government is for the people. Sorry that it looks socialistic to americans if the government actually cares about the citizen.
As to corporate taxes, here you might want to really consider not even having them.
The minute corporations give their personhood and all their other rights back, and make a binding, if-we-break-it-we-get-automatically-dissolved guarantee to never ever take any influence on politics again. Otherwise, the rule is that if you want to play with the adults, you pay your taxes.
Assorted stuff I do sometimes: Lemuria.org
Well, first off, you're admitting that switzerland is socialist where you were initially claiming that no one would say that. So... did you lie or what? Because you seem to have known all along they were pretty socialist.
As to having democracy while the US doesn't... back that argument up please. What does that mean? Explain to me why they have democracy and we don't? I think you'll have a very hard time making that argument and not looking foolish.
As to corporate personhood, I don't think you know what that means. Corporate personhood refers to investors not taking responsibility for what the company did. So for example, if I'm an old person, and I put my pension into a an oil company... am I personally responsible if the oil company pollutes a wetland? No. What happens is that the value of my investment goes down. But personally, I'm not responsible for that.
That is what corporate personhood means. Whenever people attack the concept it merely displays ignorance. The economy would collapse without it. Where as the corporate taxes you seem to think are so important are almost irrelevant to national revenue. Many countries have no corporate taxes at all and benifit from that fact. Ireland for example has attracted a lot of business to their country that would otherwise skip it entirely simply by offering very reasonable taxes.
That's the difference between Ireland and Greece. Ireland is hurting but will be okay since they have a healthy tax base. But Greece doesn't. The regulation and taxes in greece drive business out of the country.
So let me ask you point blank. Do you want to be unemployed? And if you choose to be unemployed, why is it my responsibility to take care of you? You chose to live on the street and eat garbage. You had the option to do otherwise. Why are you making bad decisions and then demanding that other people bail you out for them?
Either be rational or man up and accept the consequences.... which may or may not include starving to death.
This infantile anti corporate attitude is beyond ignorant. Your values and ideas are the sort that make countries poor and keep them poor.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
No one is ever going to do that.
It won't happen.
It would be more rational to put a tin foil hat on your head and try to find unicorns in your under pants drawer.
I swear... how are so many raving loonies on the internet? Is it just homeless people at libraries writing angry letters or are you guys 15 year olds that know nothing?
I really don't get it. The level of ignorance on this subject from so many people is inexplicable. It's like running into a lot of people that think Tomatoes are poisonous.
What factory is farting out these fruitcakes?
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Another reason why Georgism looks more appealing. http://en.wikipedia.org/wiki/Georgism
No doubt you can provide a link to this statute?
See, I'd be interested to know what the exceptions are. Loads of companies make donations & grants to all kinds of causes, and while they might get some tax write-offs I doubt they gain are over 100% of the money paid out. But the directors don't seem to get hauled off to jail for it.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Would you rather Apple keep the money to pay workers and invest in R&D, or give it to the government and have it disappear into the black hole of special interests and lobbyists?
Well, first off, you're admitting that switzerland is socialist where you were initially claiming that no one would say that. So... did you lie or what? Because you seem to have known all along they were pretty socialist.
What I wrote was "looks socialistic", not "is socialist". Are you insulting on purpose or do you not grasp the difference?
As to having democracy while the US doesn't... back that argument up please. What does that mean? Explain to me why they have democracy and we don't? I think you'll have a very hard time making that argument and not looking foolish.
The swiss vote on everything importan themselves, thus, from greek demos + kratia = government by the people. The US never was a democracy, it has always been a republic - from latin res publica = public issue. The difference is important, but vital. In a democracy, the people govern themselves, for good or ill. In a republic, a governing body or class rules in the interest of the people.
The republic is the nanny state concept, not the democracy. In fact, it is by definition a nanny state, because it treats its people as if they were kids and need to be ruled for their own benefit.
And that's the spirit that has come to dominance in most western democracies. Open your eyes and look at how politicians treat their people. Like children or imbeciles.
But personally, I'm not responsible for that.
This lack of responsibility is exactly why corporations act like psychopaths. Because that is what psychopaths are - humans with a mental defect that causes total lack of responsibility. Not my words, there's been an actual study of psychologists comparing corporate and (human) psychopath behaviour patterns.
The regulation and taxes in greece drive business out of the country.
You have no idea about what's going on in greece. I don't have much myself, but what I have shows that things are more complicated than that. Not a surprise for anyone who's been watching things for a while. Wherever the IWF got involved, things quickly went from bad to worse.
So let me ask you point blank. Do you want to be unemployed? And if you choose to be unemployed, why is it my responsibility to take care of you? You chose to live on the street and eat garbage. You had the option to do otherwise. Why are you making bad decisions and then demanding that other people bail you out for them?
Again, you make too many assumptions and your ignorance should shame you. If you care, I do in fact own a small company. And I personally (i.e. me, not my company) paid more in income taxes last year than most people have in yearly salary. Before founding my own company, I worked as a direct report to the CFO of a company with a revenue of over a billion. So I think I do have a bit of qualification to speak about taxes.
Also, you might want to re-think that sentence with "anti corporate attitude". This isn't about corporations pro or contra. It's about equality and fairness. Every buck the large corporations don't pay in taxes, the small corporations (like mine) have to shoulder. I'm a strong believer in everyone contributing his fair share. I do. Why doesn't Microsoft, why doesn't Apple, why doesn't Google? Do you realize that their record profits are massively subsidised by the general public?
If you had actually read and understood anything I wrote, you'd have realized I am not asking for special, extra or especially high taxes for corporations or large corporations. What I am asking is that they pay their taxes just like everyone else. This competition of districts, counties and even entire nations is just pathetic.
Assorted stuff I do sometimes: Lemuria.org
This has nothing to do with apple and everything to do with government corruption.
Any corporation, particularly those with share holders, are going to do this if they possibly can legally. If they didn't for example, they would get sued by their shareholders, or fired, or what have you. What are they going to do? Take some moral stance to pay more taxes and make less money?
This is about politicians creating and/or maintaining loopholes like this for corporate friends for personal profit (in one way or another). Nothing else.
Corporate income taxes are part of the fraud that corporations are people. Eliminate corporate income taxes entirely, bring back the 90% top tier personal income tax rate we enjoyed in the late 50s and early 60s, and save the middle class.
Social Credit would solve everything...
I think breaking Apple into smaller companies will create new jobs in the economy and will fetch more taxes to Govt.
Casteism
"You can always count on Americans to do the right thing - after they've tried everything else." - W. Churchill
Income earned by Americans in Foreign nations is taxable in America.
Income earned by American Companies in Foreign nations is NOT taxable in America.
Casteism
Don't ask me, ask the person who said it what they mean. I was simply interpreting.
Company (just like the state) exists first and foremost in order to provide a service. That is their REASON for existence.
Nope. A company exists to make a profit and distribute that profit to its shareholders. Providing a service is a means to that end. Your confusion on this basic point makes the rest of your rant rather ridiculous.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."