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NY Times Apple Tax Article Flawed
bonch writes "Forbes contributer Tim Worstall points out that the NY Times article claiming Apple pays less than 10 percent of its profit in taxes was based on a flawed assumption of the corporate tax system. The 9.8% figure came from Greenlining Institute, who compared Apple's 2011 profits to taxes calculated according to 2010 profits. In the corporate tax system, estimated quarterly tax payments are made based on the previous year's profits until actual profits are calculated at the end of the trading year, when the balance is then paid to the IRS."
Those are EFFECTIVE tax rates, that means that Apple is not paying 24% of their total profits. Taxes are tiered, if you make $A, then you pay the X% tax rate, if you pay $A+$B, then you pay still pay the X% on A, and you pay the increased tax rate of Y% on $B, and so on up. The statement that "apple paid less than 10% of its profits" could be correct, assuming that the 10% is the total tax paid on Apple's total profit.
those are effective taxes, not the total percent they paid based on their profits. Do you understand what an "effective" tax rate is? An effective tax rate of 24% is not 24% of their total profit.
I'm getting increasingly suspicious of the articles 'refuting' negative stories about Apple.
That documentary on Foxconn's factory was considered entirely worthless and the person who did it had his reputation dragged through the mud because he basically got one thing wrong, the underage labour (or at least he couldn't prove it) and the guy with the workplace injury (Apple claim it was at the place he went to after Foxconn, he claims it was at Foxconn). The vast majority of the report was correct yet there was such venom aimed at him over it.
Likewise here there's another attempt to destroy the NYT writer's reputation by at best using a misleading methodology and at worst just outright lying.
The message is being made clear: it doesn't matter who you write for, if you highlight unethical practices at Apple, you will have people try to destroy your career.