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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
So all government is evil?
There are plenty of places on the planet with ineffective/nonexistent government. They are all hellholes.
Please move to one of them.
--
BMO
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.
You understand that the government offsets lost or unavailable corporate tax revenue by increasing the taxes it does collect, i.e. yours, right?
No kidding!!! What do you say at this point?
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.
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?
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.
And how much would you like to bet that aple is just one of many companies that paid congress top put those loopholes there in the first place, via campaign "contributions" and general lobbying?
C|N>K
Government is a necessary evil. Much of it is more evil than necessary.
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”).”
Somalia is a great example of libertarianism, minarchism, etc. in action.
Why do we bother? It wins votes. The little guy (i.e., the masses) likes that the government is seemingly "taxing the big boys".
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
lol. Why are poor people always so delusional?
I think it's a contributing factor to why they're poor in the first place.
No it doesn't it just prints the money.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
So all government is evil?
1. No government is terrible.
2. A little limited government is good.
3. A little more government than a tiny limited government is extremely good
4. A little bit more government is a tiny bit better
5. A lot of government is really no better -- there are diminishing benefits at this point.
6. A big government is a bit worse than (4) -- too costly, too controlling, few advantages over (5).
7. A huge government is much worse than (3) -- massive cost, drain.
8. A massive tyrannical government is terrible -- worse than (1).
You understand that corporations don't pay taxes, people do. Either in the form of higher prices on products, reduced income from investments or a combination of these. Government like corporate taxes since this obscures the tax burden from the voters and the popular politics of envy.
All taxes are evil, but they are a necessary evil in that governments do things that make life better (provide for the common defense, establish courts, etc.). However, it is very common for governments to overspend (i.e., in things not for the common good) and likewise overtax. Overtax and over regulation results in reduced liberty and economic growth, under tax and regulate and you have reduced liberty and economic growth as well.
So, while I expect Apple to minimize their tax burden legally it is not fair. What would be so terrible about replacing the tax system with something simple and fair so that the little company does not pay higher rates than large companies that can afford complex tax schemes, etc. My company pays rates much higher than Apple, Google, etc. because I can't play their games.
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.
This is FUD and the general response if someone suggest government is evil.
However, those hellholes which you suggest are basically governed. So, they have government because the definition of government 'is an organization exerting centralized control over a community' (from wikipedia). It is an entirely different issue that those governments wages war against each other and if they are recognized by other governments or not.
Government cannot make man richer, but it can make him poorer. - Ludwig von Mises
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.
Judging by the deficit... I'm gonna go ahead and disagree with you.
"Hot lesbian witches! It's fucking genius!"
If this is the case, the root cause of the problem is your government, not Apple/Google/GM/whoever.
If you suspect the government is doing this (from the outside, it's pretty clear actually) why the fuck haven't you guys had another revolution yet?
Too much time on Xbox? Complaining about it on the internet is more attractive?
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
I pay my taxes in full, not because I believe it's morally right, but because I understand the consequences of disobeying coercive authority.
You must be religious. You know, one of those people whose brain works along the lines of "It's good that we have God to send us to hell if we murdered someone; imagine how many people would go on a killing rampage if there were no God - I know I would!".
Ezekiel 23:20
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 understand that the government offsets lost or unavailable corporate tax revenue by increasing the taxes it does collect, i.e. yours, right?
That's hilarious. Then how do we have a $17 trillion debt in the USA?
What you are saying is absolutely untrue. And money is not a "fixed supply", George Washington's government didn't have $17 trillion dollars --- and they had coins like the "Half-Cent". There isn't even $17 trillion dollars in the entire world --- the circulated physical currency for the USA is about $900 billion, so the other $30 to $50 trillion or so lives inside computers and with some frequency the US government decides just to "make some up" and they use it buy debt.
Priest: "Universe from nothing, no laws of physics, sped up time"+ huge discrepancies. Creationism? No. Big Bang Theory
Love your analogy.
It too bad our vicious dog that protects is is off the leash and has bred an entire pack and now has us backed into a corner....
This is a good analogy up until the "deprive it of food..." bit, since a weak wild dog can't do its job, and, arguably, that is exactly what happened here - a smart wolf came in, stole some of the dog's food, and the dog couldn't do anything about it. Keep developing the analogy though. If you can make the argument of limiting the "dog" without limiting its effectiveness against "wolves" you have a useful rhetorical tool.
So you don't ever use any of the services provided by government then? You never use a road, a railway, an airport, the education system, water, trade with other countries, defence against foreign invaders, and tons of other stuff?
If you don't, then fair play to your "net loss", but frankly... get using those services!
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.
If a corporation's income were tax free (or if the base rate were significantly lower) you would simply see everyone in the country start their own one-owner corporation and proceed to funnel all of their income in and out, tax free. See the problem? Then you need *another* rule to stop that from happening. The tax code looks as ugly as it does due to the vicious cycle of constituents rallying for less complex taxes, and corporations using political clout to make only everyone elses' taxes "less complex" (i.e. preserving the loopholes they cherish). Sadly, the political system as it stands is not well equipped to actually do the will of the people, and instead creates token efforts to appease the masses, while for the most part doing whatever it is that large corporations want.
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.
Yes, the best thing to do with a guard dog is to mistreat it and starve it. That will never backfire.
Fanatically anti-fanatical
But it only controls a compound in the capital. The rest is practically ungoverned.
"When information is power, privacy is freedom" - Jah-Wren Ryel
In case you haven't noticed the point here is that it's ungoverned, so it can't possibly be totalitarianism.
We don't have to imagine we only have to turn on the TV news.
But the libertarians are right about it reducing prices. You can buy an AK-47 for $30.
They also think that's a bit of a load off their tax burden when others get taxed. Sometimes (don't laugh) they are even right.
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)
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.
Sucker.
You're buying the line that companies will hold their breath until they turn blue if we enforce some of our corporate tax laws. It's like the "we'll offshore if you don't increase the H-1B quota" line. If they could move to a country with lower taxes or cheaper labor without endangering their business, then they would have already. In fact they've already done it as much as possible, so there are important business reasons to keep some of their operations in the US.
Additionally, "money comes back into the country for reinvestment" has already been shown not to work. That was the excuse the last time there was a tax holiday allowing companies to repatriate profits without paying taxes. They repatriated the money, didn't pay taxes, and didn't invest squat.
No. I don't see the problem.
If everyone was a small business, that business could keep money in an account without paying tax on it at the end of the year. If that money was used for business expenses, the money wouldn't be taxed. If they paid themselves, they'd have to pay social security, medicare, and income tax like normal.
Right now, a small business that wants to keep some cash from year to year has to pay the corporate tax on it. If they then pay themselves with that money, they pay social security, medicare, and income tax, too.
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.
Next time a burglar breaks into your house, no police will come help you.
Next time you home catches fire, no fire fighters will come to put it out or rescue you from it.
No more paved streets or water/sewer system for you.
You get what you pay for, and you want to pay nothing....
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
In case you haven't noticed the point here is that it's ungoverned, so it can't possibly be totalitarianism.
Sure it can be, but the folks with the AK-47's and RPG's aren't officially the government, so libertarians are fine with it.
and an NRA paradise as everyone owns a gun and uses it?
If you don't raise taxes, companies sit on a fortune doing nothing but letting the banks earn them a bigger fortune. None of this benefits the average person.
If you raise taxes, the luxury products that such companies sell will undoubtedly become more expensive or of lower quality. However, the country then has a lot of money it's sitting on that it can't just let earn interest (government money doesn't work like that for very long) and it has to spend. Some percentage of that will find its way into healthcare or education or crime prevention or SOMETHING that the average person will benefit from.
It's really just a question of who should be sitting on a stockpile of money and pumping that back into themselves? The government, or a company that makes iPads?
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.
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
Because it gives the big companies that own Congress a competitive advantage against smaller players that might threaten their oligopoly. A new startup can't afford to hide its income overseas, and thus is less of a threat to Apple and the other established players in the market.
If a corporation's income were tax free (or if the base rate were significantly lower) you would simply see everyone in the country start their own one-owner corporation and proceed to funnel all of their income in and out, tax free. See the problem?
Uhm, no, that wouldn't happen. When the income comes out, it's taxable--and in a 1-person corporation, it all comes out, or is taxed as if it does even if it doesn't.
All government is evil. No government at all is even worse. The best government is that one that leaves you alone for the most part and only interferes in your life when absolutely necessary. Taxes, like government, are a necessary evil. They should not be burdensome. Socialistic governments always become burdensome over time. Eventually they start taxing at over 50% because there is never enough of other peoples' money. Anyone who can't look down the road and see where that's going to end just isn't wanting to see.
Hellholes because they exist in geographical regions that have little use for the state to exploit at this current time or because they have recently been victimized by tyrannical governments? A fair comparison would be better met if a group of modern, healthy, educated people were allowed to succeed with a plot of usable land versus using examples like Somalia which have long histories of being victimized by the corruption of government. I must concede though that it is very likely that even my ideal conception would be a hellhole at this day of age, but not for the reasons you allude to. Governments tend to get violent when competing with voluntary, tax free, societies they cannot directly control. It is possible to have order and rules in a society which lacks a central authority or monopoly on violence.
I think Thomas Jefferson said it best:
My reading of history convinces me that most bad government results from too much government.
A wise and frugal Government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circlue of our felicities.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
"steal the wages of innocent people"
fascinating assumptions you have there
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.
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...
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.
The prices of corporate products increase. The prices of items made by businesses which do not inflict the expense of unaccountability (a.k.a. limited liability) would have no reason to increase, because their taxes wouldn't have been raised.
Let's be clear: we're not talking about taxing businesses, we're talking about taxing a certain type of (currently popular) way of doing business, to counter-balance a form of subsidy. It's a type of business which involves getting a special favor and additional rights from the government, which natural persons don't have. It's an artificially-created privileged class. Not all entities need be included within that class.
(I realize there are problems (big, big problems) with running a business outside of the limited liability system. I don't have a complete answer to the various obvious questions which are going to come up.)
We tend to think of corporate products as being a good deal, and corporate eggs are cheaper than the eggs sold by the chicken-raising neighbor down the street. But unless the neighbor bothered to fill out a bunch of forms and jump through a bunch of hoops, the neighbor was taxed. The "cheaper" comparison wasn't fair, as the corporate price was lower due to society pointing a gun at one face and demanding payment, while not pointing a gun at another face. See the problem? At least part of corporate efficiency is an illusion; something we've chosen rather than adapted to. It's not something you would find in a free market.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
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.
I really dunno why we haven't had another revolution yet. It's frankly embarassing. I first became aware of these kind of things in the late 1980's when I was in Uni, and I've been wondering ever since, just when its all gonna blow apart. People know these things go on, and yet they keep voting for the same clowns. *Frustration*
C|N>K
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.
net loss implies quantification. none is in evidence, not counting the generalized, indignant, unexamined antipathy Libertarians are prone to.
paradoxically, grouping them together in society is the best defense against assholes
I agree. Having corporations pay taxes distorts the political system as well as forcing corporations to make decisions based on non-economic factors.
Stop taxing corporations and raise taxes on money transferred from corporations to individuals.
This would put an end to corporates lobbying politicians over taxes and the inevitable corruptions it engenders. It also means you won't have corporations locating based on tax venue shopping and other stupid such activities.
Heck maybe we can even get a better resolution of Citizen's United as a result of this.
Small corps are already taxed this way.
This is why you need a revolution. Before you even get to vote on a candidate they have been vetted by the requirements to have MASSIVE campaign funding which is pretty much only obtainable if they make promises to various big lobby groups.
The system is broken. You don't need to vote someone else in, you need to reboot the system.
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
In libertarianism, the government exists to protect the rights of the people. No such structure exists in Somalia, making it the antithesis of libertarianism.
That's an excellent point, at some point or another the tax just gets passed onto a human being, with differing degrees of elasticity.
No kidding!!! What do you say at this point?
I think Thomas Jefferson said it best
Nice quote. Don't forget to mention that Jefferson believed in progressive taxes, opposed standing armies, and thought that all corporations should be "strangled in the crib".
"Please remember, corporations don't have their own money, every penny they have comes from consumers."
sounds like we shouldn't tax consumers at all...
That's the opposite of my take. The comment hinges on morality, and few believe it is moral to randomly kill people.
I am a-religious. I sympathize with the quoted statement, and yet would not ever initiate violence against another unless it were justifiable defense. The two have nothing to do with each other except what a given person deems as moral.
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.
"It's really just a question of who should be sitting on a stockpile of money and pumping that back into themselves? The government, or a company that makes iPads?"
Neither, please.
But if that's really the only choices you can come up with? Apple should get the money. At least they wont use it to drop bombs. Probably.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Friends don't let friends enable ecmascript.
...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
avoid paying billions of dollars in U.S. taxes on $44 billion in offshore income
Not really seeing the problem here. They should be paying taxes in the country the sale was made in if you ask me...
Peter predicted that you would "deliberately forget" creation 2000 years ago...
And if they're okay with that, are you? Or is this a stilted argument, where certain assumptions are being made, and only the uneducated in matters of rhetoric would be so easily persuaded?
The problem you are suffering from is one of being the kid that no one wants to hang out with, for various reasons, and yet, using whatever power / money / influence to compel others to hang out with you. You remind me of some kid's dad who, when his son has had enough of his BS, flings open the door, and says "Leave"; then, right as his son walks out, his father hits him over the back of his son's head with a 2x4, then taunts him as he lies on the ground; "You see there, son? You couldn't leave. Now go up to your room."
I am John Hurt.
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
Please remember, corporations don't have their own money, every penny they have comes from consumers.
If you raise corporate taxes, prices increase...
Because currently Apple is selling their products to us as cheaply as they can (as a public service?), and have razor thin profit margins?
The non-contract-subsidized price of an iPhone 64B is $900 (you can get it discounted to $850). The cost of parts for that phone is about $188, cost of labor $8, Apple mark-up $700 or so.
With a 350% mark-up the price of Apple products have virtually nothing to do with their costs of manufacture or doing business. They are charging every penny that they think the market will bear. In other words they are already squeezing every dollar out of the consumer that they can. If they have to pay a little more taxes on their profits, it will come out of their margin.
Starships were meant to fly, Hands up and touch the sky - Nicky Minaj
>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.
Living in a civilized society has costs, paid for by taxes. Go live on a deserted island if you don't want to participate and pay your "admission" fee....
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?
that's not funny
Like anyone can even know that
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.
why the fuck haven't you guys had another revolution yet?
Too much time on Xbox? Complaining about it on the internet is more attractive?
Not the "Internet" per se. It's Slashdot. Way too much time on Slashdot.
The non-contract-subsidized price of an iPhone 64B is $900 (you can get it discounted to $850). The cost of parts for that phone is about $188 [huffingtonpost.com], cost of labor $8 [techinsidr.com], Apple mark-up $700 or so.
Anyone who thinks the difference between cost of parts and sales price is profit is a complete idiot. And anyone who cannot even quote the article they are referring to correctly is a double idiot. You quoted the sale price for the most expensive iPhone, but the cost of parts was for a two year old and much cheaper iPhone.
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
Why would he have to be religious?
Because the only two groups of people that I'm aware of who make this kind of reasoning are either a subgroup of the religious part of the population, or sociopaths. Given their prevalence in the general population, the former is much more likely - and, coincidentally, much more treatable. (Notice that I mentioned the word "subgroup", since it's not all of them, but that makes no difference in this line of reasoning unless you turn the implication operator around.)
Or is that a thinly veiled attempt at being at being a bigot?
It's not a thinly veiled attempt at anything and I'm not a bigot (to remove any doubt, I've checked with all the English dictionaries I happen to have, on account of not being a native English person), just a cynical sceptic who's puzzled from time to time by certain aspects of human psychology. But I can understand how some people can be confused by that distinction.
Ezekiel 23:20
Just because I need cholesterol to live doesn't mean eating a Big Mac at every meal is a good idea.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Nice twist. Jefferson's writing about progressive taxes was explaining how it works in France and the alternatives they were considering, during his tenure as ambassador. During his Presidency Jefferson eliminated taxes, cut the military, and pushed to eliminate the national debt. Specifically for taxes, he fully believed you could fund the US Federal Government on import duties alone.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
If someone is hiding income from taxes
Flat tax greatly reduces the ways in which you can hide income. Apple's trick would still seem to work.
It's just greed, and greed is what makes capitalism work.
No, capitalism would still work even if no one was greedy. It's primary virtue is that it reduces the moral hazard that comes from people using something they don't own.
And choosing what to eat has what the fuck to do with paying your fair share of taxes?
>>I pay my taxes in full, not because I believe it's morally right, but because I understand the consequences of disobeying coercive authority.
>You must be religious...
That was a TOTAL non sequitur. Religious people do things because they're morally right. Well, all the ones I know anyhow.
I believe https://goo.gl/ep9Qz is the solution
Casteism
Just because I need a minimal amount of government doesn't mean you've established an argument for an over-arching modern nanny-state involved in every aspect of my life.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
You are really confused, are you wearing a tinfoil or a lead hat?
I'm not quite sure why your post is "insightful". I carefully read and re-read the one you replied to an no where did I see a hint of "So all government is evil?" Frankly I think you should reconsider your post.
Smash is entirely correct, "If you don't like it get the law changed." It's the way Government works here in the United States.
Do we really need iPads and computers and cars for "basic survival and comfort"?
The answer is obviously "yes" since these goods provide comfort and to a degree basic survival. They also provide considerable value outside of those stilted considerations.
If nobody is greedy, humanity would be ready to discard capitalism in favor of that communist utopia where everything is just sunshine and rainbows and people are magically motivated to work.
No, we'd still have differing interests. Lack of greed wouldn't make those go away.
"Possess wealth, goods, or objects of abstract value with the intention to keep it for one's self". That's private property.
No, private property is ownership of private goods or assets beyond what is considered to be "personal" property. These goods could have abstract value or as in the case of cars, they can have a quite concrete value.
It's primary virtue is that it reduces the moral hazard that comes from people using something they don't own.
No, its primary virtue is that is has NO virtues Capitalism is amoral (not immoral, look it up if you don't know the difference). It is neutral. Capitalism lets anybody work for anything, including governments that use violence.
My quote already demonstrated you wrong. You even quoted it.
What you have here is just a straw man argument. Greed, capitalism, and private property just aren't what you claim they are.
Saying something is "obvious" doesn't make it so.
What's not obvious about transportation helping you survive in the modern world? Generally people need to provide work or similar activities of value in order to be able to obtain the things they need to survive like food, shelter, etc. And the work almost never is where you can live.
And I find it rather frivolous for you to ignore that things can have value beyond their use for mere survival.
That just means people would help each other pursue each others' respective interests out of charity instead of trading through capitalism.
Not if those respective interests conflict. Capitalism is a fair and effective way to resolve such conflicts of interest with respect to things of value. Should a bit of land be better used for a library or an orphanage? Rather than some wasteful if friendly societal debate which might take years or even decades to resolve, people simply buy land for the respective uses.
In the theoretical world where nobody is greedy
In your "theory". In my theory, that isn't sufficient. In practice, there are conflicts even in the frequent cases where greed isn't a contributing factor.
Same difference. So you want to own what beyond "personal" property for yourself. That is greed. You desire to "own" more than just your "personal" property.
Nope. The desire has to be "inordinate". That was in the definition of "greed" which you quoted and promptly ignored. Merely owning something in turn doesn't even indicate desire is present. If I want to build an orphanage, I need land on which to build it. An orphanage is far in excess of my needs for survival, but you are effectively claiming that I have greed for orphanages as a result.
This was the source of my complaint about your semantic abuse of terms (greed, capitalism, and private property).
You confuse your quote with something that is undeniable fact.
Actually, you ignore there that capitalism does have a morality. For example, I can't merely make someone else's property my own. Theft is against the moral code of capitalism. If it weren't, then there wouldn't be a concrete sense of ownership.
So saying that capitalism is amoral is not "undeniable fact" but merely wrong. But my observation remains correct. It's well known that people normally treat their property better than they treat property not owned by them, especially property that isn't owned by anyone at all (eg, public property and goods). But you can get people to treat other peoples' property better, if you give them incentives, say a paying job.
,
So a janitor might treat a business's bathrooms better than their own, but primarily because the incentives are there for them to do so. Sure, it probably is "greed" in your ridiculously stretched definition of the word, but the janitor probably needs more the wages of that job than a cleaner bathroom at home.
What's not obvious about transportation helping you survive in the modern world?
Nice try. I said basic survival and comfort.
The modern world is far beyond basic survival and comfort. You're changing the scenario. Now that is setting up a strawman.
Well, if we're speaking of the modern world rather than some scenario, then basic survival alone requires a lot of technology. And as you note, the modern world is far beyond basic survival. So why should either of us bother to waste words on your scenario.
I'm pretty sure there is a "country" resident in the Cayman islands.
I believe you meant to say "a company". ;>)