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Apple Pays Only 2% Corporate Tax Outside US
New submitter dryriver writes with this snippet from the BBC: "Apple paid only $713m (£445m) Tax in the year to 29 September on foreign pre-tax profits of $36.8bn (£23.0bn), a remarkably low rate of 1.9%. Apple channels much of its business in Europe through a subsidiary in the Republic of Ireland, which has lower corporation tax than Britain. But even Ireland charges 12.5%, compared with Britain's 24%. Apple is the latest company to be identified as paying low rates of overseas tax, following Starbucks, Facebook and Google in recent weeks. It has not been suggested that any of their tax avoidance schemes are illegal. Many multinational companies manage to pay substantially below the official corporation tax rates by using tax havens such as the Caribbean islands."
As long as it's tax avoidance, rather than tax evasion, nothing illegal in this. Everyone (corporations included) want to pay as little tax as possible. It's the governments job to close the loopholes. It's the beancounters and lawyars jobs to find the new ones.
"The greatest lesson in life is to know that even fools are right sometimes" - Winston Churchill
Rule 1 of corporate income taxes: taxes are an expense built into the price of products. No company pays a penny of their own in taxes, they just collect it from customers and pass it on.
The US should lower its tax rate in response to compete with the rest of the world.
I would ensure they paid at least the very minimum required by law in every juridiction they have a physical presence in or else they cannot maintain that physical presence. Give unto Ceaser what is Caeser's...
It would be nice to get all public companies, making above a certain yearly amount, having the amount of declared tax presented in a chart. The fiscal 100?
It's nice to scream shit about companies and they probably should be paying a bigger tax amount, but we should also be putting this in perspective.
IANAA (I am not an accountant), so more information needs to be provided.
Jumpstart the tartan drive.
"Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim." - Clement Attlee
It may not be a popular position, but I don't think corporations should pay income taxes. Instead, we should increase tax rates on higher incomes. If owners want to reinvest their profits into a company, it is a good thing for the economy long-term. Taxes instead should come from consumption. If we had a 50% top end income tax rate and a 0% corporate tax rate, a good deal of the tax avoidance schemes would go away -- no not all of them, but a great deal of them.
That and we should get rid of the mortgage interest deduction.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
We've all known about this for 20 years. Perhaps someone could add to the discussion by posting something that's only become obvious in the last decade or so?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Great American company... LoL...
Why not simply re-balance the tax-take. Over 3 years, ramp corporation tax down to 0, and ramp VAT up to 30% (while perhaps increasing the scope of some of the exemptions). Problem solved.
I would have expected them to pay MORE taxes than they had to.
The net-net here is that the very rich and corporations (where the majority of money exists) aren't paying their fair share in comparison to what the diminishing middle class is paying. A flat tax with no exemptions would fix this and normalize what all of us (individuals and corporations (since we've already decided that legally corporations are individuals)) pay.
To me, a uniform flat tax seems fair to all since it is exactly the same percentage across everyone - one make more, you pay more - those who are not as fortunate to make as much simply pay less.
At the end of the day, corporate taxes are simply hidden taxes on the consumer. Consumers are under the mistaken opinion that the corporation pays the tax but, corporations in order to stay in business simply pass all their costs along in the form of price increases. For example, let's say that corporations payed 100% of the national expenses every year... Do we really expect that that would not be passed along? Corporations simply calculate what they need at the end of the day and then calculate all their expenses set a price and make sales projections to achieve that goal.
Corporate taxes are great for politicians since corporations can't vote. Since corporations can't vote, this gives the politicians ways to achieve additional tax revenue without taxing a constituency who can vote them out of office.
As was explained to me by my congressman, surprisingly, the larger corporations actually WANT high corporate taxes. Why? The small rapidly growing companies make huge profits (in relation to their size) each year. 20-100% annual growth is not uncommon in some industries -- this makes lots of "taxable" income. Additionally, the small corporations spend a lot of money on new equipment (computers, lathes, milling machines, etc.) all of which is taxed and can eventually be depreciated off over 5-7 years provided the business can stay around that long. However, your large corporations such as IBM, GE, GM, Ford, Boeing, etc. do not typically experience such growth and hence there is much less "income" to tax. Since they have already "grown", they have about as much coming off their depreciation rolls as is going on so their "tax" on equipment is basically a wash. The corporate taxes thus act as a shield to protect the large slow moving corporations from the much more profitable fast moving start-ups.
At the end of the day, corporations can only: 1) Buy stuff (which takes people who pay income taxes to create), 2) Hire People (who pay income taxes), 3) Put the money in the bank (which results in lower income rates which people use to buy houses, cars, boats, etc. which takes people who pay income taxes to build etc.) Taxing corporations simply reduces all three of the above and provides politicians with deep pockets that can't defend themselves (by voting) to tax so that they can buy votes from their various constituencies in order to stay in office.
I just want somebody else to do the paperwork. The IRS (in the US, anyway) is supposed to be a service.
“He’s not deformed, he’s just drunk!”
Since corporations are considered to be people in the US, this means we can all do the same thing and pay only 2% tax!
Sorry, but gray text on gray background is making my eyes bleed.
It's a privilege every multinational corporation uses. It's not all that significant, though, because (1) the company pays property taxes, (2) the company pays the VAT, (3) the company pays the social security and other employment taxes, (4) the employees pay income taxes and (5) the owners pay capital gains and dividend taxes.
The VAT is especially significant because it's a tax on the revenues instead of profits. In Finland, it's 23%, and Finland is not at the top of the charts.
Even after the tax optimization, it's hardly 0%.
Is Apple breaking the law? No.
The big news is that FTC staff have formally recommended a lawsuit be filed against Google for anti-trust violations concerning FRAND patent licensing.
The government takes a passive role in protecting intellectual property rights, leaving it up to patent holders (like Apple) to protect themselves, but when it comes to the abuse of IP rights, the government plays an active role. So watch out, Google!
As an accountant myself, I think it's important to point out that a number of countries (and US states - including my home state of Texas) offer significant tax incentives for businesses that will move more of their operations to their location and create jobs. TFA does not say whether or not this was the case, but an article from Forbes this past March pointed out that Ireland lured significant Apple business to the country through creative tax reduction incentives: http://www.forbes.com/sites/kellyphillipserb/2012/03/18/ireland-continues-to-flex-tax-haven-muscles-will-their-luck-run-out/
The article points out that Microsoft, Dell, Pfizer, and Wyeth have also taken advantage of Irish corporate tax incentives. So, a lot of this isn't "beancounter magic" at all - its a carefully negotiated corporate strategy that benefits the company as well as the host country.
Why would we want Apple to pay higer taxes?
Apple does many, many times more good for society with a dollar than any government does.
I am happy to say that I have never given any of my money to Apple and have never owned an Apple product.
Communists think the more money government takes from everyone the more good they could do, up to and including all product of your labor.
I say the more resources you're forced to give a government, the firmer their grasp on power.
So - maybe then corporate tax rates in the USA should be reduced so that the nation can attract corporations from around the world to make their home in the USA.... It is silly to complain that corporations want to make their home in countries where the tax rates are business friendly - one can't have it both ways. To say that a company should be altruistic and just give money to its home country is crazy. Would you, as a person simply decide to pay more local tax in your town just because you had more money? Of course not. The same is true for corporations.
Laws are for people who can't afford legislators!
Are you suggesting I should be happy about their ability to manipulate the situation so I get to pay for their infrastructure?
Given that they probably pay vast sums of VAT (which in turn was paid by their customers), it's fairly likely that it's actually those Apple customers who were paying for your infrastructure.
Plus there's employer's NI contributions, local business and property taxation rules, tax on the fuel that goes in their vehicles, and so on.
There's obviously something to consider in terms of Corporation Tax for international businesses that can shift where profits are recorded, but arguing as if these huge companies weren't contributing any taxes at all in the countries where they operate is either ignorance or wilful misrepresentation.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
What makes you think we would be better off with more money in government, famous for wasting it on things like $600 toilet seats or unused airports named after congressmen?
The two choices are a $600 toilet seat and $600 in taxes, or a $600 toilet seat and $600 in debt. Oh, and since we haven't paid off any debt since the 1950s or so, so by the time you pay back that borrowed $600, you've paid $2400 in taxes for the $600 toilet seat. So, $600 for the toilet seat or $2400 for the toilet seat? Which do you prefer.
Learn to love Alaska
And yet, if everyone respect the spirit of the law instead of finding holes in the letter of it, we as a society would most likely be a whole lot better off.
Then again, this would require such things as integrity and honesty.
The simple fact is that once barriers to capital flow across national borders were torn down, the modern social state was doomed. When money flows across borders with little restriction, organizations whose implicit purpose is to maximize profit will shift their resources to countries with the lowest possible tax rates. This creates a race to the bottom in terms of tax rates, especially when large organizations that are capable of physically or financially moving from country to country move large percentages of their wealth away from countries like the US.
I have begun to realize that right wing countries seem to do well economically largely because they have reduced their tax rates below that of other less right wing countries. This brings a temporary influx wealth and a temporary economic boost. However if the tax rates do not continue to decline, large organizations will again begin to leave, bringing large deficits and economic decline.
Let me emphasize this: I believe right wing economic policies work (temporarily) because lower tax rates bring an influx of capital, and NOT primarily because of the inherent efficiency of the private sector in managing resources. I believe that the claimed "efficiencies" of private corporations, and the claimed "inefficiencies" of government organizations are highly overstated.
The implication of this is that if we as a society wish to have the amenities of a great civilization, then we will have to find a way to restrict the flow of capital across borders. Otherwise, we will be doomed to an asymptotic descent towards a minimum level of civilization. The gap between rich and poor will continue to increase, and, seemingly paradoxically, the economy will slowly grind towards a halt, as the pool of middle class consumers evaporates.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
for this article again? Do they get posted every time Apple posts quarterly results, or does Slashdot wait to do it annually?
No more tax evasion if everyone pays a consumption tax.
That does solve the profit off-shoring problem up to a point, but it creates another problem because consumption taxes are heavily regressive. I tend to think you're right that it's worth exploring the idea of dramatically shifting where the tax burden falls, but the entire tax system would need dramatically rebalancing to avoid screwing everyone on relatively low incomes in the process.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
Through a rather complicated, cockamamie, convoluted and complex state of the Ireland Royal Family's financial affairs, we need more income to be taxed at low rates, which will enable us and our dear friends to save money. The potato blight was unseasonably harsh this year at the Family Estate in Killnascully, so we would like you, dear friend, to participate in our financial shenanigans, by registering your income through our Jacksie's Bar, which will somehow magically bless all our riches, during this time of famine."
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
I keep hearing how it's not the corporations or the rich causing the deficit but let's say if Apple paid the fair amount just on the 100 billion dollar nest egg and let's assume they shorted the system 20% that's 20 billion from one corporation. We're talking trillions of dollars potentially lost without even going near the rich just their corporations. Make the corporations actually pay the 25% and get the rich back on the 50% which was closer to the 100 year average and a big chuck of the debt disappears. Add in cutting military spending in half and axing pork barrel projects and the debt looks manageable. This has always been about a small percentage robbing this country blind while they blame the poor and even the middle class. Look at military spending. Out of what was around 800 billion a year, I haven't looked up the last year or two, only around a 100 billion went to troop support. The bulk of the rest went to contractors. Tens of billions and maybe a few hundred billion is for things Congress approved that the military didn't even ask for. The only mysterious about fixing the problems is why aren't we even trying? We have troops defending half the planet and China is allowed to sell products below cost while Apple pays less than 2% on foreign earnings. Helen Keller could figure out what's wrong, why can't Congress?
The two choices are a $600 toilet seat and $600 in taxes, or a $600 toilet seat and $600 in debt.
I don't like your two choices. If that's really all we have, then the libertarian idea sounds a lot better: government doesn't work, so let's reduce government.
"First they came for the slanderers and i said nothing."
...but even though its damn ugly, it is a very shiny boat! Who am i to begrudge anyone their own shiny boat?
Apple pays taxes on profits, they just do so in the tax jurisdiction that the profit was made in. Here is a somewhat simplified possible explanation. Products are made by Apple-China and sold by Apple-USA. There is a defined transfer cost between the two entities. Should that transfer cost be near actual manufacturing cost and thereby most profits recognized in the US jurisdiction or near actual sale price and thereby most profits recognized in the Chinese jurisdiction? In general the answer depends on whether one jurisdiction has a significantly lower tax rate.
Which leads into a secondary problem, where they expand. If Apple can not return overseas profits to the US without those profits being taxed a second time then there is an incentive to do any future expansion overseas. Expanding facilities would be a better use of that money than just letting it sit in the bank. So a relatively higher tax rate ends up hurting the higher rate jurisdiction a second time.
Intentional or not, this is the system the politicians have created. Government policy often has unintended consequences, and the more complex the policy the more and greater the unintended consequences.
I beg to differ. It's not up to just beancounters and lawyers to find loopholes, they're on the inside of this. THAT's part the of problem because they make the tax laws.
It's up to everyone to be vigilant and recommend mechanisms to identify and discourage loopholes. These tax haven users should pay the same taxes. To make the tax system even more fair, for every transaction where revenue is made, that revenue should be taxed and paid to the government where the selling company resides right away. Usage-based taxing, just like they do for their clients using cash/interac/paypal/mastercard. There should be no exceptions/waivers/grandfather clauses for any individual or corporation or other kind of business entity. If the lawyers in the parliament/congress don't expedite quickly enough the public's request for tax fairness, then we should question whether these tax lawyers have the better good of the majority of the public at heart. We should then probably appoint other kinds of individuals to create/enforce laws for tax fairness in every country. WCIT could help with this considering all international communication is internet-based.
It's a coincidence that I just heard about a book called "Treasure Islands" by Nicholas Shaxson recently about tax havens. From what I understand, the book discusses tax havens impacting heavily on world politics and economies and have much to do with world's current economic problems. Here's a quote: "A fundamental building block of modern economic theory is transparency: Markets work best when two sides to a contract have access to equal information. Treasure Islands explores a system that works directly and aggressively against transparency. Offshore secrecy shifts control over information and the power that flows from it toward the insiders, helping them take the cream and use the system to shift the costs and risks onto the rest of society."
Yet Apple is a heavy user of the government-provided resources in my country that my taxes pay for, and is one of the organisations with far more frequent access to the very politicians you're suggesting should fix the problem.
Are you suggesting I should be happy about their ability to manipulate the situation so I get to pay for their infrastructure?
Welcome to the world where crime pays, especially the kind that gets re-branded as "investment".
Do it yourself, because no one else will do it yourself. [beta blockade 10-17 Feb]
Yeah, I thought of that, too.
A while ago, the flat (income) taxers had the idea of mailing every wage earner a $12,000 check each year as a sort of fairness compensator. Don't know if it's practical or not.
"I don't know, therefore Aliens" Wafflebox1
The two choices are a $600 toilet seat and $600 in taxes, or a $600 toilet seat and $600 in debt
In the real world, when I make less than expected, I simply buy less. Perhaps I do not take a trip, eat out less often, or not buy a few books I like.
But in your world when the government gets less income than expected (or in fact even when it gets exactly what is expected, because after all the effects of tax breaks should be baked in to income estimates) the government; why it cannot reduce spending whatsoever! No, like a drug addled mindless creature, it carries on and spends (or overspends) with no regard to what it's taking in. How does that make sense?
Sorry buddy, but I don't buy into your philosophy. That's not how government has to be, and I certainly do not want a government that cannot control even itself (especially since it transfers that desire for control it cannot impose on itself, onto its citizens).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
An insurance company keeps two sets of books, one on insurance operations and one on investments. most of their tax liability comes out of operations which is why they typically show a loss on paper on their operations and then use that credit as a carry across to the investment side of the house. when I worked for Equitable we paid ZERO tax for many years.
Simply have the gov. start buying American made goods. China is smart enough to do that, even though it is illegal per WTO/IMF. But that has not stopped them and more importantly, the rest of the nations have done NOTHING about it.
And when it comes to taxes, there is a simple way to solve this. Get rid of all tax breaks and lower the rates a bit. Simple as that. In particular, no more tax breaks for paying taxes elsewhere.
I prefer the "u" in honour as it seems to be missing these days.
The health of the economy is measured by the "flow" of money. In essence, it's the value of the total GDP measured in a time period (usually a year). Compared year by year, you always want this number to increase - it drives innovation, efficiency, and progress.
Money flows from people to corporations. By taxing people and not corporations, you are inherently slowing the flow of money, and reducing the corporate incentive towards higher productivity.
Consider the extremes: if you tax people at 50% and businesses at 0%, commerce will be much reduced because people will only have enough money to purchase necessities. If you tax businesses at 50% and people at 0%, then people will spend money more freely and commerce would increase.
You can't tax businesses 100% because you still need an incentive for people to start and run businesses.
This is just part of the transition to the post-scarcity economy**. In the extreme case there is one big automated factory which takes orders from people and ships the results. Every person is given $1000 virtual currency to spend each month - this represents their "share" of the production capacity of the factory(*).
Everyone gets $1000 of virtual money, but if you like you can start a business and perhaps earn a bigger share by selling goods that the automated factory doesn't make.
But if you tax the people and not the business - eventually business will collect all the money in the system. You tax the business and distribute the gains to the people in order to keep the money flowing.
* It's hard to imagine a completely automated factory, but not a largely automated factory. It might only require only a few overseers and mechanics, which would be negligible in comparison to the available workforce.
**Note that we have reached the post-scarcity economy in several areas. Computers used to charge by the hour of compute time (IBM 360), nowadays compute time is just the cost of the electricity. Hard disk storage is largely post-scarcity. Phone service is close - it costs more to bill and track calls than the calls themselves. Food production is almost at post-scarcity - the number of people needed for farming is so low that it's virtually at the "automated factory" level already, and requires government subsidies to continue. Media distribution is essentially free, as is software. In the near future, solar panel recharging stations (a'la Tesla) will make energy essentially free.
My late father's law practice was primarily spent keeping the governments from THIEVING private property through a tax code which he stated frequently has NOTHING to do with raising revenue for properly instituted government spending for PUBLIC good not private aggrandizement. The tax code, as is all LAW written by men and women, as noted also by Basitat, is intended only for the use of the self-annointed eltite as a means of control.
I intend to misbehave.
If the US Libertarian Party was something other than disgruntle Republicans, I might agree. Having been to a number of Libertarian Party meetings across 3 states, I wouldn't ever vote for any of them. But I'd love if there was an actual libertarian candidate.
Learn to love Alaska
The Firm (1993). Tom Cruise was about to take the bar and his superior at the firm says, "Here's a multiple choice. The difference between tax avoidance and tax evasion is: A) Whatever the IRS says. B) A smart lawyer. C) Ten years in prison. D) All of the above"
Sig: I stole this sig.
The US is the only country to have foreign tax laws. Most countries have you declare your foreign income to exempt you from tax credits, but the US actually charges a tax on foreign income.
The point was to prevent companies from illegally offshoring their assets, but to prevent companies from having to pay tax on things that legitimately did not occur in the US, and occur under another country's tax rating, the US added so many loopholes that it's pretty much swiss cheese.
Long story short, foreign tax is idiotic, and should quite frankly be eliminated if they can't come up with a system that fulfills it's goals without the matte of loopholes.
You know that the overpriced hammer and toilet seat stories are total bullshit, right?
Not that it matters, you don't seem the type to let facts interfere with your preconceptions.
Required reading for internet skeptics
SOOOO sick of the stupid toilet seat argument.
Do you know that toilet seat was custom designed and manufactured to fit in the bathroom of a US Air Force bomber? When you custom design and manufacture a couple hundred toilet seats, yes, they are going to cost $600. I bet the toilet seat on the space shuttle cost 100x that...
And please now bring up the $400 hammer. That one that was custom designed to work on repairs in a submarine without creating enough noise to be detected by sonar. Such a waste! But not as much as would have been wasted if a $1B nuclear submarine was detected because of a loud hammer.
Bug surprise, sometimes context matters.
Here's some real news:
http://www.businessweek.com/news/2012-11-01/ftc-staff-said-to-formally-recommend-google-patent-suit
Investors pay tax on sums invested and also sums received. Don't charge corporations taxes at all. Kill estate and inventory taxes and switch from property taxes to title transfer taxes.
JJ
Apple, Microsoft, and a bunch of other super-rich companies publicly endorse and spend a little cash supporting lots of liberal causes like "taxing the rich" and gay marriage... you are supposed to thank them by not noticing all the jobs they export and all the taxes they avoid paying... oh, and look! they are rolling-out a new shiny object! Throw out your "old" one! Buy the new one! Squirrel!
These super-rich mega-corps can afford armies of lawyers and accountants and PR people. Any higher levels of taxes and regulations they lobby for will only have a negative impact on any small new upstart companies (who cannot bear those burdens and therefor will be prevented from rising to challenge the top dogs) but the big guys will ALWAYS be able to dodge anything you throw at them. There's a reason why guys like Bill Gates and Steve Jobs succeed; they are far smarter and more nimble than the sort of idiots who go to work in government... it has always been this way and always shall be. They count on their fanboys being too stupid and gullible to notice.
Having been to a number of Libertarian Party meetings across 3 states, I wouldn't ever vote for any of them.
That is a very real problem with the libertarian party.
"First they came for the slanderers and i said nothing."
We should all stop buying Apple products because of their tax evasion.
Tax evasion is illegal, by definition, and there's no indication Apple has done that. Tax avoidance is simply structuring finances to minimize taxes, and (if done correctly) is no more illegal than shopping carefully to minimize your grocery bill.
Q: What does the "B." in Benoit B. Mandelbrot stand for? A: Benoit B. Mandelbrot
You should have been responding to the OP, not me. I just used his example for mine. But even then, the military should have looked for existing airline toilets to base a design off of.
Learn to love Alaska
I think those are valid rebuttals - but as someone who has had to deal with the government procurement process, I can tell you that there is still a ton of waste and overhead that simply does not need to be there. For a short time I worked on the IT side of things for a government agency. Getting an identical replacement for a EOL Sun server that would normally set you back maybe 6-7 grand from a 3rd party dealer (remember, this is a server Sun doesn't sell anymore) cost the government at least three times that because of all the politics and rules that exist to become a supplier for the government. So there was like only a couple of suppliers who could jump all the hoops and they charged those prices as a cost of doing business.
We do have to face the facts that governments tend to be inefficient and wasteful with money. The conservative ideologues tend to give shitty examples as to why, but its still true.
Corporations do not pay tax, the consumer does when the company passes this expense along to you and me.
So you choose to ignore reality because it's inconvenient.
No.
You apologize for the current status, and claim it cannot change, so you should just submit to what you perceive as unalterable. You would bleed dry any private citizen with money until none were left, to satisfy the beast.
But here's a deeper truth; what cannot go on forever, will not. Eventually there comes and end where enough people are tired of the overspending and they say no more. That time has come, soon the spending will reign in because nothing else is possible. It will come as a great shock to all those who claim government only exists to spend; but it was clear for those with an understanding of history.
And it does not change the fundamental waste of pouring money now into such a system instead of using that money to grow an economy further to help pay off the terrible debts coming due later down the line. If for no other reason, that would be why keep the $600 away from the addict would still be the superior choice.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Looking at the current UK system, I suspect that as a minimum you'd have to:
1. increase the threshold where people start to pay personal income tax and/or adjust the benefits system equivalently (because a lot of salaries in retail and manufacturing are about to take a hit at the same time that a lot of prices are going to go up)
2. reduce or eliminate VAT on essential items
3. increase VAT on non-essential items
4. push VAT into the stratosphere on luxury items
5. adjust taxes on big ticket items like house and car purchases to a sliding scale rather than a flat rate, probably starting reasonably low for your first starter home or runabout but becoming astronomical by the time you're buying that holiday mansion or Ferrari (and in the particular case of property, impose taxes on rents similarly)
6. adjust duties on imports to prevent the obvious workarounds for the items that now have higher VAT
and then hope that you could somehow balance the huge number of minor variations and edge cases that would inevitably arise so that the curve for consumption taxes paid by individuals of different wealth levels wound up looking roughly the same shape as the curve for income taxes they used to pay, all without spending so much on fighting lawsuits over free trade and paying customs staff to fight the resulting black markets that you wound up with less than you started with.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
No more tax evasion if everyone pays a consumption tax.
That does solve the profit off-shoring problem up to a point, but it creates another problem because consumption taxes are heavily regressive. I tend to think you're right that it's worth exploring the idea of dramatically shifting where the tax burden falls, but the entire tax system would need dramatically rebalancing to avoid screwing everyone on relatively low incomes in the process.
Don't charge a consumption tax on food, clothing, utilities or housing. Problem solved.
A consumption tax has the non-trivial advantage of encouraging saving. If you don't spend money you don't get taxed on it. It also removes the discouragement to strive for success that a so called progressive tax system imposes. Bonus, the IRC would cease to be useful and could be largely eliminated.
I was raised on the command line, bitch
"Nemo me impune lacesset"
They did. Get it through your head pay an engineer for 3months ~$15000 and buy only 10 of what he designed then by Pentagon accounting rules each item cost $1500 even if the additional cost of materials for the next item is $10 the Pentagon now reports a cost of ~$1366 each not $10 for the eleventh seat.
Businesses go way beyond tax avoidance. They bargain with local governments for tax breaks in exchange for locating there. Is that unfair? Maybe, maybe not. Is it against the public interest? Absolutely! Their interests do not always diverge from the public interest, but very often they do.
Businesses go further than that. They lobby for favorable laws, favorable spending, tax treatment etc. Look how hard Amazon fought against paying sales taxes. Amazon even tried to force the issue by shutting down all facilities in those states that tried to collect, to punish them. What's the difference between what they do and bribing? Perhaps just semantics. At any rate, it's all gone too far. They take the profits, and stick the rest of us with the bills. If Amazon won't pay tax, then they can remove their sorry asses from my state and good riddance. Don't let the door hit your butts on the way out, Amazon. We don't need those kind of businesses.
No doubt that banks, shopping malls and developers have more say in, for instance, road and street planning and traffic light placement and timing than any mere representative of the public, such as a city planner or mayor. And it's obvious they have no vision. They think only of themselves. Running a business is hard. They're looking for every edge, and they purposely disregard all other considerations. Social good be damned, except insofar as that's good for business. How should the lights be timed to drive the most people to their stores? They actually prefer badly timed lights on the idea that the more time people spend in front of their stores, the better business will be. And taxes? They care little if a city is driven to its knees because they got too good a deal on taxes, bargained too hard and sharply, and snookered the representatives of the moment. They feel no responsibility whatsoever for that. The cities are there for them, providing transportation, water, sewage, electricity, law enforcement, emergency services, and of course, customers. How quickly the police jump when business whistles! That overzealousness has lead to many embarrassing incidents over the years, things like the police being called to harass bank customers who wanted to close their accounts and weren't doing anything wrong, and border agents confiscating prescription medicines. But they sure aren't there for their cities. Indeed, they have the gall to whine that we aren't friendly enough to business. Joe Consumer can pay for the police and all the rest, but that's not enough, not for them.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
If a country wants to lure more businesses inside its borders, it needs to make it worthwhile for the businesses. Taxes are simply an expense. Like any other part or material, a business is likely to shop around for the best deal. Rather than trying to use the law to penalize businesses for sound business practices, a country should seek to make its tax rates competitive on the global scale.
As a business, it takes work and costs money to reduce your tax burden. Clearly Apple has been quite successful at this but it didn't happen for free. Compliance costs might even make a rate here in the US higher than 2% make sense for them and save them money. Clearly our unreasonable 35% rate is enough to make most large businesses jump through myriad hoops to save money and makes for an inhospitable economic environment for many companies who used to be based here.
We need to find what rate would allow companies like Apple to keep their money here and adopt that rate immediately.
It's a perfect time for being wasted.
A perfect time to watch the stars.
- Burden Brothers, "Beautiful Night"
Bullsit, I buy and build IT sysyems for the government projects and we buy COTS systems for ~the same price as commercial projects I work. Only extra expense is the government likes the keep your drive warranties which all the vendors charge for.
Yeah I agree the GP post (to mine) started it...
But even then, how much would it cost to start searching for existing toilets that match a given design of plane mostly suited to carrying 20MT bombs? And who the hell fucking cares in the end when it's $600 on a plane that probably cost $500M+ and is carrying enough payload to wipe out 10% of the world in one mission? I'd say if you are going to make someone responsible for destroying the world at least give them a comfortable shit beforehand.
I heard a story about an expensive airplane toilet seat. I don't know if it is the same one you are talking about.
The story was that there was a design flaw in this particular airplane. When it was loaded with fuel, it was more tail-heavy than expected, with serious danger of the nose lifting up and the tail hitting the ground! Planes had already been built when this was figured out, and rather than scrap them all and start over, some ways were found to reduce weight in the rear of the plane. One was to rip out the toilet plumbing, since the toilet was toward the rear of the plane. The toilet became an empty space, with plastic garbage bags to collect the waste (and oh the glamorous life of an Air Force crewman, amirite?); and: the toilet seat was replaced by a custom carbon fiber seat that was very light weight.
I'm not even sure if this story is true; I couldn't even name which plane this was, let alone provide a citation. But if it is true, it illustrates a point: sometimes, something might sound stupid and crazy if taken out of context. Scrapping a bunch of planes would be more expensive than making some weird custom toilet seats, but if you don't have that context, you just hear "wow, stupidly expensive toilet seats ha ha."
This is a direct result of tax laws having _national_ jurisdiction and the companies in question having _international_ operations.
Ideally there would be a world-wide tax jurisdiction with laws applicable to international companies like these (with the resulting tax apportioned on revenue / head count to the countries the company operates in).
I see no reason why there shouldn't be (a) minimum tax rates as a percentage of revenue on a national basis, (b) calculation of tax on an international basis then apportionment to countries as above, (c) exclusion of the most obvious financial engineering through tax havens. Sure there's some corner cases to be figured out, but this really _isn't_rocket science.
If we can send a spacecraft to Mars surely this isn't beyond us? If we can get US / EU / China to agree then we're pretty much home and dry.
If that discourages some organisations from operating in some jurisdictions and allows local companies to operate (and pay taxes instead) then that's fine.
I can understand some bit of complexity for a multi national, over half a trillion dollar company. But there is no reason for any tax code to be 73K pages unless it's to hide loopholes and other corporate benefits. Also the damn thing keeps growing every year. At least Apple paid some tax, GE paid 0% not long ago.
You honestly expect politicians to come up with taxes that tax their campaign fund sponsors? That wouldn't be in the interest of those that put them in place now, would it?
I was promised a flying car. Where is my flying car?
There is a reason both Obama and Romney brought up Cleveland Clinic in a debate, they bill as things should be. Doctors work for the hospital, no separate bills for each doctor, each test... the cost for doing something is a base rate that handles everything involved. No surprise bills showing up months after the fact, no extra referals within the system because they're paid the same regardless of how many tests are done. Not surprising there are fewer tests and higher results as profit motivation isn't the major goal. One study shows they do things 50% cheaper.
Sure things are still damn expensive and I don't know how the cost comparison is to other countries. I do know from personal experience that this sort of billing is drastically easier than any other hospital I've ever dealt with. Sad we have just Mayo and Cleveland doing this in the whole country. A quick google points out the highlights better than me http://www.thedailybeast.com/newsweek/2009/11/26/the-hospital-that-could-cure-health-care.html
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Communists think the more money government takes from everyone the more good they could do, up to and including all product of your labor.
I say the more resources you're forced to give a government, the firmer their grasp on power.
And the less government is allowed to tax corporations the more firmly the corporate oligarchs grasp on power becomes. If it's all the same to you, I prefer bring ruled by scumbags I can elect ever four years, to your Republican utopia where I am being ruled by corporate royalty.
Cyprus has lower corp tax than Ireland and is not regarded as naughty by the OECD iirc. It has some financial problems but so does much of the rest of southern Europe. Cyprus was bailed out by the Russians who keep a lot of money there. So why aren't they set up to pay tax in Cyprus?
Sure but if I use a proxy to get lower iTune prices, it is against Apple law. And if I make use of the right to legally download music in Holland, I am a pirate!
But if a company uses loopholes to avoid paying billions, they are perfectly entitled and not at all amoral assholes.
I guess we know how you will be voting tomorrow. And that is your right, just don't bitch when your taxes are increased and your job is outsourced.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
SOOOO sick of the stupid toilet seat argument.
Do you know that toilet seat was custom designed and manufactured to fit in the bathroom of a US Air Force bomber? When you custom design and manufacture a couple hundred toilet seats, yes, they are going to cost $600.
USD 600 is not even out of the range for non-customized toilet seats.
Fine, then let them admit that no business pays ANY taxes.
That two percent Apple is paying came from WHERE? The consumer. Consumers pay ALL taxes. Corporations are indirect tax collectors for the respective governments they pay too.
If people around this world really understood the tax loads they live under, as in they paid every penny directly, do many think things would not change? Politicians are protected from public ire because they rely on ignorance, misdirection, and selfishness.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Billions of govt sector workers pensions are invested in Apple.
The govt wont do anything to hurt apples stock.
They rather own billions of stock, than get 1/100th in taxes.
Just as CA pretends to be poor and has no $$ and in debt, it has billions in assets in stocks and funds. The market is the biggest slush fund casino.
Liberty freedom are no1, not dicks in suits.
Foreign taxes paid are usually deductible to a point, if a mutual tax treaty exists, to avoid double taxation. In general supposed to pay the higher of the two, US or foreign. The catch is Co's not individuals, can defer paying higher US rate until repatriation of cash. So if Apple brings cash back to US it will be taxed higher.
So Americans should be happy Apple avoids paying foreign taxes more for Uncle Sam if they can get their hands on it somehow. More likely there will be a tax holiday window for economic boost rationale to repatriate. Good for shareholders
Somalia tried that. You should definitely move there.
...are any of you paying attention to WHO SETS THE TAX POLICIES?
To condemn the firms for putting their headquarters in Ireland (due to the low tax rates) entirely ignores the fact that...this is EXACTLY WHY IRELAND SET THEIR TAXES SO LOW.
Christ, people. Do you shop for the best deal on your car, or do you spend more than you have to on the premise that "well, those car salespeople can probably use some extra money". According to many posters in this thread: you're (apparently) immoral.
-Styopa
Government does work though. Yeah, there are lots of problems, but when it works it seems to work much better than the free market (see healthcare, public transport, utilities etc.) Therefore the best thing to do is to try to improve government, rather than reduce it.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Do you know that toilet seat was custom designed and manufactured to fit in the bathroom of a US Air Force bomber? When you custom design and manufacture a couple hundred toilet seats, yes, they are going to cost $600. I bet the toilet seat on the space shuttle cost 100x that...
And please now bring up the $400 hammer. That one that was custom designed to work on repairs in a submarine without creating enough noise to be detected by sonar. Such a waste! But not as much as would have been wasted if a $1B nuclear submarine was detected because of a loud hammer.
Bug surprise, sometimes context matters.
It's not that you don't have a point, because you do, but the problem is that you don't know that your point is actually correct. It may be wrong. Let me explain. My first job after graduation was working as a computer programmer for a branch of the US military. One of the things I learned very quickly is that any cost can be justified if it is on a contract. We had a contract with a private company that paid them 6 figures. They paid about 35% of that cost out in salary to a contractor who worked at our facility full time. For about 2 weeks a year, their senior Unix system admin guy would come on site to help us with thorny issues that the regular on site guy couldn't handle. So if I am very generous in extrapolating their costs, I think it would be fair to say that 50% of that contract was nothing but pure profit for them. None of us have any way to know if the $600 cost for the toilet seat really and truly represents a fair return on the cost to design and produce it or if it's 50% or even 75% markup. I've actually been on a US Air Force cargo plane, not a bomber though, and I'm not sure how much special you really need to make a toilet seat. The hammer might be something I can understand costing that much, but I bet you that the odds are good that the toilet seat didn't really need to cost anywhere near $600.
The U.S and the EU need to get together and come up with a standard rate that ALL countries will use. 2% is ridiculous for any country. Just make it default 12-15% so companies cannot avoid higher in one country. This helps everyone, not just one country or another. The only people who lose out are shareholders, and I am playing the smallest violin in the world for them..
It's been around for awhile, but I'm sure there are still those who haven't seen it:
Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men — the poorest — would pay nothing; the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18, and the tenth man — the richest — would pay $59.
That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement — until one day, the owner threw them a curve (in tax language a tax cut).
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So now dinner for the ten only cost $80.00.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six — the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?"
The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would end up being PAID to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.
But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man who pointed to the tenth. "But he got $7!"
"Yeah, that's right," exclaimed the fifth man, "I only saved a dollar, too . . . It's unfair that he got seven times more than me!".
"That's true!" shouted the seventh man, "why should he get $7 back when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill! Imagine that!
And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.
Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!
Then I suggest giving a choice other than a $600 toilet seat........
"First they came for the slanderers and i said nothing."
You forgot to include mention of those whose "job" it is to create those loopholes: Congress and Parliaments. It's a difficult job, crafting those loopholes so that only your friends and donors can drive their Humvees through them, but somebody's gotta do it.
Why are the lazy pathetic whiners always crying because they can't get their hands on others money? They obvious want you to forget that the owners of the companies ( stockholders ) have to pay income taxes on the dividends. It is such bull that if you own a company that you pay corporation taxes and then pay a second time when you get your money from your company.
But the lazy lefties don't care about true fairness, only self-greed.
Here is an idea that specifically addresses encouraging companies to create jobs: Make the corporate tax rate 50% (all of these numbers can be adjusted, but this is to make a point). Since we want companies to create jobs (and "good" jobs), give a 30% credit against the taxes for each dollar in wages paid (in ADDITION to the deduction for the wages). In order to make sure that these are good jobs, and not high-paid executives, make the credit only applicable for someone making between 150% and 400% of the poverty level. No credit would be given for the minimum wage folks that can't earn a living, nor for the ridiculous salaries paid to a lot of CEOs. Manufacturing would benefit greatly, but "paper shufflers" like stockbrokers would get hit heavily. The goal would be for a corporation to pay NO taxes if they are truly a job creator.
BTW, the credit reflects the benefit of creating employment in the US. The tax credit is ONLY for wages paid to US taxpayers. - If those employees pay 30% in taxes, the credit is actually revenue-neutral AND we eliminate unemployment and assistance payments for those workers.
This will never happen though - neither side would have anything to harp on every 4 years...
Agreed, 110% - let me "further that" with what DISPOSABLE INCOME does, which is allow you to purchase goods & services above & beyond the "bare necessities" (food, shelter, warmth, & other basic needs)...
Without it? Per YOUR VERY STATMENTS - there IS NO "ECONOMY"...
Then, you have ONLYy the rich getting richer, lobbying/bribing politicians OR "hedging their bets" & backing BOTH parties + the POOR getting poorer, & forget about a "middle-class" - the fools in the middle, standing on the fence, always take the most beating...
(On "2 parties" - Hey: There ISN'T REALLY such a thing...Which a former politician (former Gov. of Minnesota Jesse Ventura) of ALL PEOPLE even said are the SAME - owned by LARGE WEALTHY INTERESTS - oh, they ACT IT, on TV in debates etc., but laugh @ the rest us, afterwards)...
So, in other words?
Corporate bodies (take a peek @ their campaign contributions, you'll see them doing it, essentially BUYING places for those they wish to control, & by result, laws made as well)).
First things you see dying? Small businesses...
E.B.-> Local bars, restaurants, & other "services" that folks can no longer afford!
Man - I feel most sorry for young guys... when I was in my 20's, the USA was in a "1950's style 'Golden Age'" almost: I could quit a job, & 30 minutes later, have a BETTER one, if I wished, AND I could take out my girlfriend(s) to the NICEST places & have such fun!
I bet it's not that good anymore for the majority of "working-class stiffs"/regular joes who are in their 20's anymore... in fact, I know it's not from speaking to many (not just in the economically depressed city I live in, but while I was all over the country... hell, all over the WORLD in the past 10++ yrs. or thereabouts...)).
No, it's like I told my Dad, decades ago (which he said I was nuts & wouldn't listen to):
WE ARE IN THE CONTROL OF THE BIGGEST CROOKS OF ALL TIME - the 1%'er/Ultra-Wealthy, for whom "enough"? IS NEVER ENOUGH... they've got "the bug", a "virus of the spirit", called GREED... no questions asked.
APK
P.S.=> What causes this? Offshoring/Outsourcing - taking away GOOD PAYING JOBS, & flooring Unions (thanks Mr. Reagan (not) as he started it imo, with his shenanigan with the Air Traffic Controllers' Union)?? You're DESTROYING the middle-class, & creating RICH or POOR only... now, when you're poor?
GOOD LUCK getting any "law" (forget justice - there's LITTLE of it when you don't have a jury trial & even then, it's questionable - thank goodness that in criminal trials @ least, the defendant's side "picks jurors" @ least - for now, lol)... as my attorney put it to me once (one of the MOST intelligent women I've ever met, too bad she's "hitched" imo, lol:
"There's no law, ONLY money..."
It's the truth... & by taking away the disposable income I noted above? You lose that right/ability/power also... you get NO law - & in a "litigious society" such as ours has been becoming more & more? GOOD LUCK fighting those with more wealth... they'll just "lean on you", delaying trials & such, until YOU "run dry" of the CA$H/"Holy Dollar" you need to fight back - it's JUST LIKE BUYING POTS in poker people... you "lean on" & bluff the opponent, whether you have a better hand (being right in courts by analogy), or not...
... apk
The simplest way to stop corporate tax cheating (read that dodging!), is to apply a flat tax on corporate earnings. The money corporations would save by not having to employ an army of lawyers and accountants would go a long way towards recouping their higher tax rates. Also, the flat tax rate on corporations could be lower which would benefit smaller corporations who cannot afford the lawyer/accountant armies.
My karma is bad. Don't get too close!!!
The govt was paying AT&T for renting phones, but these phones were rented from 1950s, and were still being paid for, the old black ones. But they werent even being used, they were in storage, already replaced, but still being paid for a few $ ea / month.
Meanwhile AT&T has received 100x the cost of the phones value.
Stupid govt workers just dont care, thats policy.
Theres no incentive to buy cheaper to save $ from an infinite bank account.
Liberty freedom are no1, not dicks in suits.