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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
Why would anybody have a personal income when they can just register a company to buy them what they want?
Rod Taylor
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.
Corporations inherently pay less tax-- their expenses count against revenue, while individuals are taxed on "revenue."
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)
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.
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.
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"