Tim Cook Calls Apple's Tax Questions 'Political Crap' (cbsnews.com)

nerdyalien writes: Apple CEO Tim Cook dismissed as "total political crap" the notion that the tech giant was avoiding taxes. Cook's remarks, made on CBS' 60 Minutes show, come amid a debate in the United States over corporations avoiding taxes through techniques such as so-called inversion deals, where a company redomiciles its tax base to another country. Apple holds $181.1 billion in offshore profits, more than any other U.S. company, and would owe an estimated $59.2 billion in taxes if it tried to bring the money back to the U.S., a recent study based on SEC filings showed. The current tax code was made for the industrial age, and not the "digital age," Cook said.

Comments

Money for nothin...

[DCFusor]

Not a fanboy of Apple or most (all?) of the big corps myself, but it seems people are too dim to realize there's no "their money" for governments to take (and waste). It's our money. Corporations run at whatever profit, period - Apple being prime in the case of simply setting prices high enough to get the margins they desire, and people paying them whatever.
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"It doesn't work like that."

Taxing them more simply means higher prices for all the customers. That would be us, not them. If they keep prices the same, it means less investment by them in jobs, or higher prices for us, period. Further, while most people see reports of huge "cash in the bank" values for some of these outfits, they fail to look at the financials of same to discover that there are loans against most of the balance in most cases, often as not used to buyback shares to keep earnings/outstanding share up and thus share prices (and C-suite compensation) as well - most companies don't actually have a lot of that cash in hand (though some do). At any rate, a tax on them is simply a tax on the customers in the end, there's no free of that sort in this universe. I suppose one could make the argument that since I'm not a customer of theirs, I wouldn't care - and I'm not - but costing for example, Apple customers more would trickle down to me in the form of other raised prices I'd pay for things made by their customers in the end, anyway.

It's dangerous to live in a world of flat-broke spendthrift governments who use words like "fair" to mean "gimme more of your money to buy your votes with" - whether a company or an individual. Consumption taxes are effectively regressive... While profits have a poor record of trickling down, losses seem to always do so; is that rain, or are you p*ssing on my back? TANSTAFFL

Re:Money for nothin...

[arkhan_jg]

Taxing them more simply means higher prices for all the customers.

Well that's simply horseshit. Paying their taxes increases their costs. Apple make a lot of profit, so paying taxes would reduce that profit. Profit is used for a lot of things; salary increases (rarely), growing the business by investing in new product designs, more staff etc etc, put in the bank for a rainy day, or paid to the shareholders in dividends or via share buy-back schemes.

Apple has stupendous amounts of past profit stashed away as cash reserves in offshore banks, because it doesn't have anything else it can think of to do with it.

Increasing prices to pay their taxes, rather than take a slightly smaller profit makes no sense, because their revenues already far outstrip costs. If a higher price would be more profitable for them (vs decreasing sales), they'd already be charging it.

Apple, like Google, Vodafone, Amazon and any number of multinationals pay hardly any tax in the countries that buy their products. They make their revenue from western countries, but use complex arrangements with shell corporations, intra-company loans, licence payments etc so that those profits are then recorded in 0-tax tiny countries. Thus much higher profits - which ultimately largely end up going to the shareholders (which of course, includes the CEO and other top management). The shareholders are largely already the wealthy, because they're the only ones able to use their money to invest in large amounts of shares instead of you know, buying stuff to live on. Even if the money doesn't go directly out in dividends, it's used to increase the share prices, which has the same effect.

So instead of paying for the infrastructure they use in western countries, for the social safety nets their workers have in europe etc, for the educations their workers get, by paying the pitiful amounts of tax rates they actually should - they divert them to offshore holdings and they end up making the already rich richer.

It's incredibly regressive. In addition, smaller national companies can't pull the same tricks, have lower profits to invest in growing their business, and is a good part of the reason the big multinationals got so big in the first place and displace smaller companies from the marketplace. Who, incidentally, also pay better wages on average.

UK corporation tax rate is 18%, hardly extortionate for the amount they benefit from selling in the UK. And hardly any of the multinationals actually pay anything like that rate, many pay nothing at all - meaning us working stiffs have to pick up the difference to pay for the NHS, roads, police, firemen, social security, pensions etc etc etc, all of which have been under heavy pressure precisely because the government isn't getting enough taxes in to pay for our already thinly stretched services.

Companies in the 50's and 60's used to include social responsibility for their workforce and their communities as part of their thinking - they knew that having customers able to afford their products was a good thing for them in the long run. Now it's all about maximising share price in the shortest possible time, and screw the long term, the workforce, the customer and anyone other than the very richest.

Re: Tax Inversion

[therealkevinkretz]

Well, for most the dividends *are* taxed at almost 40%, also short-term stock gains. Longer term taxed at lower rate, but it's tax on non-inflation adjusted profit.

Re:Look, Tim, I get you do not like the law

[Tailhook]

But you cannot pick

Well they have been.

They take their profits in Ireland to avoid taxes. They build their products in Asia to avoid the EPA, OSHA, NLRP, EEOC, et al. They get to pick their preferred rules on both ends. Yay "free" trade.

Tim is ordinarily so smooth it's creepy; words like "crap" are outliers in his vocabularly. He messed up a little here. But no worries. They'll have him say we need to "do something" about LGBT rights or "do something" about the climate and all will be well again.

Re:Needs an Update

[Xenx]

For what it's worth.. 1MM is apparently common in financial services for 1 million.

Re:What did they expect?

[frnic]

Except they don't "owe" it. They pay 100% of the taxes they owe. If you feel they should OWE more, then stop voting for people that keep giving them more ways to pay less taxes.

If you could cut your tax bill in half and didn't, you would simply be stupid, if Apple does it, they are criminals.

Re:Tax Inversion

[KGIII]

You speak the truth. My accountant is a dear old lady who worked for the State's revenue department until retiring to open her own practice. She's, well, I'm not going to say that she's unethical or anything but she's really creative. I have no idea what witchcraft she does nor do I pretend to understand it. I'm just really grateful for her.

For my own amusement, I've done my own taxes and then brought them in for her to correct. Heh... She still bitches at me for donating anonymously. She tells me countless ways to save money. She's not devious, that's not the word. She's... Hmm... I'm just going to have to stick with "creative."

Like you said, it is indeed an art. I've been just fine after two audits after retiring. They are, I'm told, random audits in both cases but I'd like to know how they're defining random. I notice that both audits happened after I'd sold and retired. :/