Slashdot Mirror
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
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 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?
Yes, apple are being targeted. In australia, we have a term for this. It is called "tall poppy syndrome".
Yes, other companies do it. Any company that does NOT do everything within the law to minimize their tax burden is both not doing the right thing by their shareholders, and handing their competitors a competitive advantage.
If apple have been avoiding tax like this, and you disagree with it, petition your government to get the loopholes tightened. If it is possible to structure their business to minimize the amount of tax they pay, then why shouldn't they?
If Tim Cook or whoever wants to donate their own money to charity or pay more tax than they need to that is their decision. However the money apple makes isn't owned by apple. It is owned by the company shareholders - who will pay tax on any dividends or capital gains from sold shares in any case.
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
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”).”
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.
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
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.
Yes, the best thing to do with a guard dog is to mistreat it and starve it. That will never backfire.
Fanatically anti-fanatical
Corporations are in no way legally (nor, in many cases ethically) responsible to maximize their bottom line. Many companies (Ben and Jerry's as a common example) consider themselves ethically bound to take huge swaths of cash from their bottom line and give to the community and good causes, even if there's no possible hope of ROI.
The oft-cited Ford v. Dodge basically says that a company can't go out of its way to screw over the shareholders. There is a huge space of good acts between "legally required to maximize profits at all costs" and "screwing the shareholders."