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Web of Tax Shelters Saved Apple Billions, Inquiry Finds
mspohr writes with news that Apple might be in a bit of hot water over its policy of offshoring revenues to favorable tax jurisdictions. Only they take it a step further, from the article: "Apple relied on a 'complex web of offshore entities' and U.S. tax loopholes to avoid paying billions of dollars in U.S. taxes on $44 billion in offshore income over the past four years ... The maker of iPhones and iPads used at least three foreign subsidiaries that it claims are not 'tax resident in any nation' to help it avoid paying billions in 'otherwise taxable offshore income,' the Senate Permanent Subcommittee on Investigations said in a statement yesterday."
If what they did is legal, so what? I take every tax deduction I can legally find, why shouldn't Apple?
...Apple isn't the only one that does this.
Taxes are for little people. They aren't for the rich or corporations. Taxes are for you and small-business, not for people and corporations that can hire the best people who know the best methods of tax avoidance (legal) and tax evasion (it's only illegal if you get caught).
--
BMO
My relationship with government is a net loss. Therefore, anything that impedes government on its natural course of continuous expansion is a win in my book -- and that includes both legal and illegal tax avoidance.
Before you get your accusations on, I make less than the national average salary and don't have anything of value to hide in the first place. Regardless, I pay my taxes in full, not because I believe it's morally right, but because I understand the consequences of disobeying coercive authority.
In any event, when others do it -- especially big corporations -- I will be right there cheering them on.
Ok, so Apple took advantage of tax loopholes and routed income offshore. The real question is: was it illegal?
How many other companies do the same thing? Is Apple being targeted just because they're Apple? Did they not make the right p
When other international companies do the same thing?
Government's idea of a balanced budget: take money from the right pocket to balance...oh who am I kidding?
They do that?
What's news is that someone in the government has just learned what everybody knows. Wake me up when they do something about it.
If it is legal, and apple DIDN'T do it, then they are not doing what is in the best interest of their sharheolders.
Don't like it? Get the law changed. Corporations exploiting the rules for profit is just what they do. I'm sure every single person here tries to ensure they get the biggest tax refund / avoids paying as much tax as they legally can.
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
As an AAPL investor, Good. They should be taking every LEGAL means to make money. If congress is so upset, they should change the laws. Or better yet, how about not putting the loopholes in there in the first place. I hope Tim stands up to those idiots and calls them out for their stupidness.
This is what you get when you allow people to own and trade intangibles. That stuff can move anywhere, and then it's rented back to siphon off the actual profits into a tax haven. The people who develop, build and sell the devices in the real world apparently all work for naught, because no matter how hard they work, they can't make a dime over the cost of the intellectual property that they have to rent from an offshore letter box, which makes all the profit with no people except a handful of lawyers working for it.
If these foreign subsidiaries aren't "tax resident in any nation", are they protected by the laws of any nation? It seems odd that a company can exist and be recognized as an entity that can hold property without being incorporated in a recognized nation. Can't we just take their stuff and see who they turn to for the protection of law?
I'm hoping someone with some econ knowledge can enlighten me, although I fear since this is the Internet and Slashdot comments it's probably not going to happen ;-) I've never heard of a situation where companies tried to pay taxes because they like them and if they're publicly traded they had a fiduciary responsibility to avoid them in order to maximize returns to the shareholders, and when forced to pay them they just try to find ways to force the cost down to the customer.
So why do we bother at all? Personally, I'd rather pay higher property/income taxes and abandon corporate taxes so that money comes back into the country for reinvestment and so that the companies don't leave the country and expand their business elsewhere.
Blessed be he who reads this post, Cursed be he who tells my boss.
With the recent IRS debacle and large corporations like Apple and Facebook avoiding billions in taxes, it should be obvious to everyone that taxes are not about fairness. They are a weapon to be wielded by government to attack opposition and to grant favors to business cronies who elect them and donate to them. If ever there was an argument for a simple tax system, like a flat tax, this is it.
I can't wait for Apple's new product, the iShore account!
Why not link to their answer as well?
http://images.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf
“Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US in order to avoid US tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands. Apple has substantial foreign cash because it sells the majority of its products outside the US. International operations accounted for 61% of Apple’s revenue last year and two-thirds of its revenue last quarter. These foreign earnings are taxed in the jurisdiction where they are earned (“foreign, post-tax income”).”
On the whole, consumers stand 100% behind Apple and their practices.
http://www.aljazeera.com/programmes/activate/2011/09/201194144739197637.html
http://www.aljazeera.com/programmes/activate/2011/09/20119994239791675.html
It does not wash from those who claim Apple has no idea what is going on. Do you think they would give away their trade secrets and manufacturing to complete strangers blindly? You would think that Apple would reward their biggest clients (USA) by having a larger manufacturer presence there, as a thank you. There is a point you get so rich, that you cannot really lose. I am sure US Senators would bend over backwards for them to help establish a serious manufacturing presence in the USA. This tax fiasco in one more thing. Sure Apple does lawful tax evasion, why not? It is the citizens who should take them to task, but don't. Apple can use harmful DRM, exploit labor, evade taxes (for a cash-strapped nation), even though they have all the money--as long as people have their Apple products, it's fine.
Apple is one example of a populace's willful blindness in order to get at what they want. Sort of like shopping at Walmart, a company that does tremendous harm to US national interests http://vimeo.com/52359213
The populace continue to willfully ignore. Nobody cares. "Give me my Apple", "The Chinese are lucky to have jobs, who cares about their conditions", etc, etc. This sort of thing is standard US corporate operating procedure. It should not really be the courts who punish, but a conscious, informed populace.
All the foreign "loopholes" actually only help Apple avoid paying foreign taxes, those aren't about US taxes at all. These seem more about adding to the political theater of the government going after tax dodgers.
The entirety of Apples foreign cash horde earned on foreign sales, is subject to US taxation. Not one of those foreign shell games protects those earnings from US taxation. In fact they make the cash horde larger, making it potentially sweeter for US taxation.
But here is the one "loophole" that really counts. US Taxation doesn't come into effect until Apple repatriates the cash, which there is no requirement that Apple (or any other US corporation) ever actually do.
This is why US corporations have 1.45 Trillion dollars parked outside the USA.
http://www.forbes.com/sites/afontevecchia/2013/03/19/u-s-companies-stashing-more-cash-abroad-as-stock-piles-hit-record-1-45t/
I do not have a problem with them not paying more than they are legally required to, but only to a certain extent. And that extent is when they start pumping money into lobbyists and political donations to KEEP those laws unfairly in their favor. If businesses stay out of politics, then they cannot be blamed when they get advantages from it. But, when they essentially buy our politicians and laws, I have a lot less tolerance for the "I was just following the law" excuse.
For example, I had a big problem with Mitt Romney's tax rate, but not necessarily because it was low. The rate was so low because there is a preferential tax rate for carried interest. I had a problem with it because he was on owner of Bain Capital and they had spent millions of dollars lobbying Washington to keep "carried interest" at a preferential rate. When you have bought and paid for a law, then you become responsible for whether it is fair or not.
Congress needs to mount an investigation to find the batch of idiots who wrote these tax laws which allow corporations to do this!
If Slashdot were chemistry it would look like this:Cadaverine
Apple pursued lawful tax evasion, so it is acceptable. It does not matter if Apple use exploited labor to achieve their goals, harmful DRM, (lawfully) evade taxes, and not thank their biggest customer (USA) by establishing a larger manufacturing presence. http://www.aljazeera.com/programmes/activate/2011/09/201194144739197637.html http://www.aljazeera.com/programmes/activate/2011/09/20119994239791675.html Apple are not much different from Walmart, who harm US national interests by their practices: http://vimeo.com/52359213 Consumers do not care. Ideally, a well informed populace would take Apple and any other corporate entity who harms US interests to tasks. They could boycott, organize protests. Instead, consumers reward this behavior, so why should Apple not do whatever it wants?
"SO we bide our time, waiting for a purer kick to bloom and the future is still bleak, uncertain and beautiful" -GSYBE
You act as if you wouldn't have been doing the exact same thing if you were in the exact same position. "Of course I wouldn't use legal loopholes and save billions of dollars. I'm a upright standing honest hardworking company man who pays every penny of his taxes no matter how obscure. I would never save a billion dollars for my company by letting a tax attorney work a loophole" yeah right.
If you had an attorney right now who said he could save you thousands on your income tax return with a loophole you would get away with using, you would use it and don't bullshit me by saying you wouldn't. That would be no different than what apple did, the scale is different but it is the same thing.
What's really missing in the discussion here is that all large multinational corporations use tax avoidance strategies. GE for example has a team of lawyers and accountants just focused on minimizing their tax liabilities globally. http://www.huffingtonpost.com/2013/03/11/general-electric-taxes_n_2852094.html . This Tax avoidance problem has been discussed for the past few years especially with deficits running as high as they have been. It's the old "we're not taking in enough revenue, so where can we get more." The administration plays that message up, the spin doctors on the Sunday morning news programs echo it because it keeps the discussion in the public eye. Even the news in the UK about the same avoidance strategies being questioned just echos the same problem. What's missing from the discussion is how much money is being pissed away by bad ideas, red tape and boondoggles like studying the sex life of squirrels. Fraud and waste alone cost us billions in the US each year and for every billion we save, that's a billion that could be put to towards other programs (like offsetting the sequester) or simply put back into the taxpayer's pockets by not taking it in the first place. http://www.businessinsider.com/government-waste-spending-sequestration-sequester-2013-3?op=1
So, Apple in this case isn't alone and it's just business. What needs to happen in the US is that the crappy tax code and the IRS need to be changed. We need to get rid of the loopholes that allow companies to shelter billions in profits overseas and allow them to move money from place to place without being taxed. That requires changes to the law and specifically to the tax code, I for one am in favor of abolishing it and going to consumption taxes or a flat tax. Think of it: no April 15th hassles. No audits.. That will put thousands of bureaucrats out of work and H&R block and Quicken to boot! Does that mean a smaller government too? Yes, and that is a good thing.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
Remember: most American's take advantage of the "legal loophole" called the itemized deduction.
You are under no legal obligation to itemize your deductions. And, unless I'm mistaken, you do not have to claim all your allowances.
Yes, I realize there is a huge difference between corporations skipping on millions in taxes, but they are taking advantage of the various tax laws that allow them to lower their tax liability, like any one of us do on April 15th.
The problem is not the corporations but the laws. I'd like to see a more simple tax system so that I don't have to spend an entire weekend figuring out how much I need to pay the government. Then again, I'm sure flying cars are more of a realistic possibility than our tax system being fixed.
We don't live in Shouldland.
Google, Amazon and Apple are like those people who turn up to a "bring a bottle" party with a litre of supermarket own brand cola and then proceed to drink the Wyborowa vodka and Hendricks gin all night. They may upset a lot of people, but they've not technically broken any rules.
If governments feel that companies (that follow their rules) still manage to pay too little tax - then the onus should be on the government to change them. Anything else they do is just blowing hot air.
Avantslash - View Slashdot cleanly on your mobile phone.
Do you earn your income through honest work? I do. I don't hire politicians to steal the wages of innocent people. And I don't demand my cut of the loot when those wages are pilfered.
I'm glad the people at Apple and the people who own Apple shares have found a way to escape the looters with only limited losses. Maybe someday the rest of us can escape.
I'm hoping someone with some econ knowledge can enlighten me, although I fear since this is the Internet and Slashdot comments it's probably not going to happen ;-) I've never heard of a situation where companies tried to pay taxes because they like them and if they're publicly traded they had a fiduciary responsibility to avoid them in order to maximize returns to the shareholders, and when forced to pay them they just try to find ways to force the cost down to the customer.
So why do we bother at all? Personally, I'd rather pay higher property/income taxes and abandon corporate taxes so that money comes back into the country for reinvestment and so that the companies don't leave the country and expand their business elsewhere.
We did a "corporate tax holiday" before and when companies bring back the money tax-free they simply do not invest it nor does it spur job creation. http://www.cnbc.com/id/44773176 When both the Institute for Policy Studies and the Heritage Foundation say that another tax holiday would have no effect on investment or jobs, then you know it's a bad idea. (Seriously, getting those two to agree on the effects of a tax cut is like getting Rush Limbaugh and President Obama to agree on healthcare policy)
Please remember, corporations don't have their own money, every penny they have comes from consumers.
If you raise corporate taxes, prices increase. It is the most regressive tax around, it doesn't matter if you have a net worth of $100 or $1B, corporate taxes cost each of you the same, you pay it in the price of the product.
Stockholders expect a certain margin, if costs go up (and corporation tax is just another cost) then prices go up. And competition doesn't come in to play because theoretically everyone pays the same tax.
I don't even know why this story is being reported. It's like saying "the sun rose this morning." This is how capitalism operates, always has, always will. That's why it's called "capital"-ism--it's a system by and for capital, and the more you have, the more it's your system. If you don't like it, there's another system that works exactly the opposite way. It's called socialism. (don't bother with the anti-socialist rants, please, we've seen and heard them all for a hundred years--instead, explain to us how capitalism is going to save the world)
It has shown our government where the loopholes are and now they can close them. ( Yeah, right, that might happen! )
Oh, by the way, Apple, since you don't pay, what is in my opinion, your fair share of US taxes, then I do not feel that the US should use taxpayer money to go after people that steal your IP, patents or trade secrets. And those H1Bs you have? We will be paying very close attention to them.
For individuals, if we make too much money, we hit AMT -- where you can't claim different types of deductions.
So why not do it for companies? To kick this off, I propose:
I'm no accountant or economist, so I have no idea what this would actually do ... and the numbers are just pulled out of the air. But basically, AMT was to deal with the 155 top people who had the ability to dodge taxes ... so why not do it for the top 50-100 companies?
I have no idea what the actual impact of these numbers would be ... it's more a proposed framework than anything else. Maybe there needs to be adjustments for service companies (who are mostly salary) vs. manufacturers whose costs are mostly in materials.
Build it, and they will come^Hplain.
I think you mistake what the argument is actually for. Companies are in direct competition with one another. If it weren't for so-called "intellectual property" (which enables the creation of partial monopolies), companies would have to compete pretty much on price alone. On those terms, it's a Darwinian certainty that the shit will eventually float to the top. That's right, this is a *competition*, just like a sport. And when something is legal in a sport and it works, the players are going to use it. You can bitch and moan and boycott and maybe the fans will care for a week or two but in the end if it's allowed and it works, they're going to do it.
The solution is not to expect every single one of the thousands of players to voluntarily adhere to what you consider to be wrong. The solution is not to try to keep on eye on these players and shame or boycott them into playing honorably. The solution is to outlaw the tactic.
Too many people seem to view this argument as trying to morally excuse the behavior of the executives in charge of the company, but that shouldn't be the point. I couldn't care less whether the accountants of Apple are going to hell or not. The point is: right or wrong it's going to keep happening as long as it's legal, so let's make it illegal, k?
While the quoted article says "... committee claims...", the summary here is headlined "... committee finds... ". A subtle change that completely changes the meaning.
So if California would lower their tax rate they could get at least a piece of the money instead of none of it.
Coder's Stone: The programming language quick ref for iPad
Maybe they should all live in those countries with better tax laws then.
This whole ZeroTax thing doesn't pass the sniff test.
Just my $,02
Agreed, Companies are legally and ethically responsible to their shareholders to maximize the bottom line. If any company does not do everything they can to minimize their tax liability "legally" then, not only are they are at a distinct disadvantage to other companies, they are also not taking care of their (owners/shareholders). Even if the shareholders don't have the board of directors ousted, in the long run, they will lose out to competition, and eventually go under, or get bought out by a company with a better tax team.
TODO create witty sig.
The "inquiry" has not "found" anything as of yet. The "inquiry" is just beginning, and two congressmen have made the, so far unsubstantiated, allegations quoted in the summary.
I really don't agree with taxing companies. If company generates revenue and doesn't spend this money the same year, it gets punished for this by the income tax. Why do we do that? We are forcing responsible companies, that want to make financial reserves not to do them. Let's tax only the transfer of money from companies to people. If the money stays in the company, nobody is going to buy a super expensive yacht for their own ego without paying taxes.
Somebody could say that taxing the companies is important because they can pile the money without passing them again in the economy and thus cause deflation. However, income taxes don't prevent this, they merely slow this process.
So, are we going to see protests by "the 99%" on the front steps of Apple?
Maybe "Occupy Cupertino"?
One thing, at least they'd be able to protest AND be near Apple "geniuses" in case they have problems with their ipad-blogging-of-their-protest-experience, or the playing of "we shall overcome" using downloaded music from the iStore.
-Styopa
The hubbub is little more than puffery.
The fact is that tax laws are complex and explicitly written to enable these sorts of tax shelters / loopholes. It is the same with fantastical deductions, and tax incentive programs. The fact of the matter is that the company simply pays the minimum that the law allows and no more. Not only does it make fiscal sense, but int he US, it's their fiduciary duty (they could be sued by shareholders for overpaying their taxes).
Congress is huffing and puffing, but just for show. It's well within their purview to alter the laws, the rates, ... everything. However, the system that exists now is highly profitable for those that have the money and cleverness to take advantage of it. It means that a US company is richer, that they employ more people (some of whom are in the US), it means that shareholders investments grow, and that rich men with big checkbooks are willing to support campaigns. There's little incentive to make taxation strictly equitable and, less face it, doing a good job of making a simple equitable system that can't be exploited in one way or another is just a whole lot of tough work that nobody has the time or energy to get into.
At the end of the day, this will all blow over and a gaggle of congressmen and senators will give themselves a pat on the back for standing up against tax avoiders before returning to business as usual.
How can lawmakers say loopholes are illegal, they specifically made them.
I am not a tax accountant, nor a tax lawyer, but I did have to read and convert into code a lot of tax law.
The tax law is written WITH THE ASSUMPTION that taxpayers will include all income, take all credits, use all deductions, and make all payments that the law requires. This is the only working definition of "fairness". When you're talking taxes, fairness has nothing to do with paying back society, it has to do with following the rules as written. Fairness is what happens when the IRS treats all taxpayers the same, and doesn't apply special rules and handling to some but not others. That's what is fair.
Which is what brings the latest scandal into such sharp focus. It is absolutely unfair for the IRS to target one group of taxpayers for special focus based just on their names. It is absolutely unfair for the IRS to ask these organizations to list the books they read, the content of the prayers they pray, the names and addresses of their major donors, and the content of their blog posts. Those things have nothing to do with following the tax rules fairly.
If anyone has a beef with Apple paying foreign taxes instead of US taxes, any fault would lie with Congress, either for too-lax laws that permit the tax to be legally avoided, for too-generous tax credits that reward major corporations for "investing" in the US, or for too-stupid economic policies that raise the cost of doing business in the US to astronomical heights, making almost any foreign country a cheaper place in which to do business.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday
HaHa, Steve Jobs is dead.
If corporations are using the Tax Law in unintended ways, change the law. The rest of us can complain and moan about how the laws are broken. You can actually do something about it. Shaming somebody into not playing by the rules so well, ain't gonna work. If even you get Apple to bring over all of their revenue, and have it taxed without a single loophole/write off, the next corporation will just waltz in and exhibit the bad behavior that you don't like.
I would postulate that hellholes might have a lot of effective government when these tax evaders eventually get to them...
If I move overseas and get a job I pay income tax in both places but a bunch of rich fucks pay nothing?
Congress is in an uproar over a situation caused by the low quality of their own work. Apple established a subsidiary incorporated in Ireland with operating HQ in Cupertino.
Well under US law a company location is deemed to be where it is incorporated. EVERY OTHER country holds it to be where the headquarters is. So this operation as far as Ireland is concerned is a US company, and as far as the US is concerned is a Irish company.
This means it doesn't have to file taxes ANYWHERE.
All it would take is some reasonable tax codes to prevent these shenanigans. But NoooOOooo.
So now we get the Congress holding a circus to excoriate Apple. But really the fault is their own.
It's not laws or morals, it's that Apple is unpatriotic. They hate America and everything it stands for.
Why else wouldn't they help to support it? Share dividends, please, they've had record profits.
I believe I've heard a similar analogy around here:
The tallest blade of grass is first to be cut by the lawnmower
In other words, those that stand out the most may also get undesired attention first.
I'd imagine the puppy analogy is similar, though hopefully minus the lawnmower
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
I actually don't understand what the issue is... It seems to be "wha wha wha, apple leaves the money it makes in other countries in those countries, rather than bringing it into the US"... It seems to me that apple is perfectly entitled to do that.
It's certainly nothing compared to google's "We don't sell anything in the UK, it's all in Ireland, honest" bullshit.
Apple's subsidiaries, located in Ireland, paid a mere 0.05 per cent in tax on $22bn in revenues.
You get 5 and insightful...there is nothing worth discussing here.
this whole investigation is a diversion, trying to keep our attention off the fact that congress was elected to fix our fucking economy. instead they'd rather continue their partisan bickering, and keep us from questioning congress on their decision to fund another $79B to Afghanistan. Our nation's "leadership" is severely lacking any kind of honesty or morality.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
The real issue is that the tax system is designed so that the wealthy (both individuals and corporations) pay little or no taxes. Unfortunately this situation is unlikely to change since most elected officials essentially earn their living from the contributions of the rich.
Shareholders use the roads that are paid out of taxation. Therefore if Apple doesn't pay taxes in the shareholders' resident country, then the shareholder doesn't get decent roads to use.
So by your argument, Apple has a fiduciary duty to pay taxes everywhere they have shareholders.
How much from Apple goes on essential infrastructure?
Oh, that's right, they don't do that, do they.
It the Apple entities are not resident in any nation, maybe they should host The Pirate Bay.
The organizations the IRS targeted were seeking tax-privileged status hoping to use a loophole in campaign contributions to allow unlimited contributions without having to disclose their donor list. The scandal is that the IRS granted these political organizations their 501c4 status.
But if you want to think that asking patently fraudulent "social welfare" organizations to fill out a questionnaire before granting them their totally undeserved special tax treatment is a scandal, then you go with your bad self.
TSIA
Then why do all the "Occupy" folks blog about "Big Corporations" from their MacBooks?
...at a pathetically low rate enacted by the filthy rich, or absolutely zero through another host of bullshit dodges to ensure civil society is properly fucked out of sustaining funds.
Greed is a disease just as destructive and habitual as drug addiction. Past a certain point, it's not even about the money and what to do with it*, rather it's the unending need to feel that thrill of ever bigger kills. Fuck, even a relatively (now anyways) nice guy like Warrren Buffett is still elbows-deep on the kill floor; solely for the excitement.
* - other than using that lucre to alter the very society in a Randian way, ala the Koch Brothers and their brothel of public whores.
(The Bush-Obama administration's castration of the IRS.)
What was one of George W. Bush's first actions after he stole the 2000 presidential election (other than snarfing down a celebratory cheeseburger pizza)?
Bush shut down the "high roller" division in the IRS; that section which garnered the greatest recovered tax revenues by auditing the richest individuals and the richest corporations --- and redirected the IRS against much lower-income working Americans!
Now, this information about several IRS agents targeting the Tea Party and affiliated groups isn't breaking news --- they've been sitting on this for quite some time!
So why the sudden newsy firestorm now?
On the very same day this bullcrap spewed forth, on the IRS web site (please see special links below) an international, joint investigation was announced. Their target: trillions of untaxed dollars sitting in offshore tax havens (i.e., offshore financial centers, etc.). This investigation will be undertaken by the IRS, the UK and Australia, thanks to leaked data from these tax havens.
Now this is the big story which they are misdirecting our attention away from, the one not being covered by the CorporateMedia today!
Instead, we are treated to "breaking news" of the moronic type.
Now, I'm no fan of the IRS, and we all should realize by this time that the tax code was written by the super-rich to benefit the super-rich (one need only read IRS Rule 401(a)(5) which essentially states that structured inequality, that is, screw the workers, is legally acceptable to them to comprehend that), so this is the first real egalitarian action by the IRS in many decades, but the CorporateMedia and the Bush-Obama Administration wishes to kill it!
Support the IRS in their investigation and tell the gov't to ignore this bullcrap!
Special Links:
http://www.online-accounting-degrees.net/tax-havens/
http://www.icij.org/blog/2013/05/authorities-announce-tax-haven-investigation
http://www.irs.gov/uac/Newsroom/IRS,-Australia-and-United-Kingdom-Engaged-in-Cooperative-Effort-to-Combat-Offshore-Tax-Evasion
http://wallstreetonparade.com/2013/05/it%E2%80%99s-high-time-the-irs-investigates-the-funding-of-the-tea-party/
Reading sources:
Treasure Islands, by Nicholas Shaxson
Offshore, by William Brittain-Catlin
that these exemptions have been used for years by GE, Exxon, etc., and they have never been called to Washington to defend themselves. Why Apple? Why now? And, most important, if Apple is held to an interpretation of the tax laws, Will Exxon, Halliburton, GE, Wal -Mart, the Koch Brother, etc., also be called in and held to the same standards? I think not. Congress knows very well that these companies are their funders and they will get a warning very soon to back off of Apple, lest they be dragged into the spotlight.
Republican leadership = Idiocracy
And if it didn't exercise maximum diligence in minimizing the taxes, the shareholders would get back at the financial officers responsible and find them liable in breach of the shareholders' trust. Regardless of whether the current system is broken or not, sounds like the big corporations are doing the one and only thing available to them.
VKh
If ever there was an argument for a simple tax system, like a flat tax, this is it.
The problem here is not tax rates, it is tax shelters. If someone is hiding income from taxes, it makes no difference how taxes are calculated on reported income.
>So instead of the load being distributed properly, you want the government to shift most of the load to your back?
that argument is no logically different than saying, "well if that nigger escapes from the plantation, the master will make us other niggers work harder"
It's just plain stupid.
This has a funny smell to it. Everyone knows all of America's IT companies use a variety of techniques (double dutch etc.) to avoid being good corporate citizens of the US. So why is Apple being singled out.
one theory goes Apple would not play ball with the Feds in some security relate way- think CALLEA. The game is, all tech companies cheat massively on their taxes and in exchange for those ill gotten billions, Uncle Sam expects them to step up to the plate when the Feds come knocking for back doors etc . Any company who doesn't play ball gets paraded before Congress and the American public and threatened with having their criminal tax dodge taken away.
Google is as guilty as Apple. So it IBM HP Oracle and every single other IT company. So why is Apple having it's drawers dropped over a barrel like this?
Many of the tactics reported are very similar to the ones that were used by Enron. Enough said. There is actually a law, passed in '69, that states that attempting to use any and every possible tax deduction to reduce your tax liability to $0 is illegal. Everyone has to, and ought to, pay taxes. This is where the original AMT comes from.
The US taxes income that is already taxed in another country. It should be that money is taxed where it's earned. If something is sold to someone in France then the seller needs to pay French income, vat and sales taxes. If it's sold to someone in Germany then the French should collect no taxes and nor should the United States.
You simply can not survive as a business without tax shelters if you have to pay foreign and US taxes. So in for a penny, in for a pound. Your forced to do business so may as well defraud as much as you can and the taxes they would normally pay is used for buying off US federal politicians. That is politicizations rig the game so money goes in their coffers.
If everything legally permissible is deemed morally acceptable then humanity is doomed.
A great example is the dismembering of unborn children. Legally permissible, and ethically despicable.
your tax money is used to benefit society; when you don't pay your taxes you are not contributing to society
Your definition of "contributing to society" is much too limited.
I happen to give money to charities that operate a lot more efficiently than government entitlement programs do. To the extent that I am taxed, I am less able to give to those charities. And if I didn't pay taxes, I could and would contribute a lot more to society than I do now.
Maybe you'd blow the money on beer if you weren't taxed, but don't paint everyone else with that broad brush.
That that is is that that that that is not is not.
first off, this is nothing more than an Apple witch hunt. When it comes to playing shell games with revenue in order to minimize taxes, Apple is no worse than Google or Microsoft or Facebook or GE for that matter. All the big companies are doing this. Why? Because it's legal (grey area but legal) and because it creates higher profits, translating to higher share prices.
The real problem is the impossibly complex tax code. Not only for corporations but for individuals too. The difference, of course, is that corporations have many more write-offs available to them than the average person does. Thus the increasingly larger burden on individuals to fund the federal government. Despite that, every meaningful attempt to simply the tax code has been shot down by Congress.
Typical politicians - they think that passing more laws will fix the problem. Apple lobbied for a tax holiday to bring back the profits onshore, even though they did nothing illegal. It was denied. So Congress chooses to engage in political theater by marching Tim Cook out in front of these idiots. Nothing gets solved, as usual.
Apple Computer should be commended for following the Law. Congress itself should be offshored.
-- Jimtown Kelly
I believe https://goo.gl/ep9Qz is the solution
Casteism
Now you have to live with it.
The solution to this problem is simple.
Pass a law within the USA that all businesses selling any products here or otherwise operating here here must set aside a flat percentage of their gross for taxes.
However, that money is divided amongst all countries passing identical copies of this legislation according to the number of employees in each country.
Do the same thing for state taxes (and supercede existing state tax mechanisms), as an exercise of interstate commerce rights. Allocate equal amounts to federal and state government (or perhaps 25/75%).
Sit back and watch all the game playing stop as every other country passes the same laws.
The only real difficulty is figuring out how to prevent the accounting and legal professions from interfering with this legislation as a result of the ethical conflict of interest they have with any form of simplification of tax laws.
I'm pretty sure there is a "country" resident in the Cayman islands.
I believe you meant to say "a company". ;>)