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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.
The current tax code was made for the industrial age, and not the "digital age," Cook said.
Then we should update the tax code and close the loopholes Apple and every single other large corporation has been abusing in the process.
And then make you pay the taxes you owe, retroactively, Tim, if you're going to try and be a smartass about it.
They are not U.S. profits. The U.S. has no right to tax them uuntil and unless Apple does something stupid, and converts them into U.S. profits.
Is there anything Apple could spend that money on in the U.S.?
It's not like they are going to build factories in the U.S. and raise their costs of production by complying with U.S. environmental laws, or hiring more expensive U.S. workers.
Even if they did bring it back to the U.S. as profits, and offset the environmental costs by subtracting out the shipping costs in exchange: you aren't going to get U.S. jobs out of it: those tasks will be automated. Sorry, blue collar workers: no paycheck for you!
Like Steve Jobs told Obama in Feb 2011, when Obama asked what it would take to manufacture Apple products in the U.S. ("Why can’t that work come home?") -- the answer is: “Those jobs aren’t coming back.”
Others agree. On 23 Jan 2015:
“Our economy is in deep trouble,” said billionaire and self-professed American Dream-liver Jeff Greene in an interview yesterday at the World Economic Forum in Davos, Switzerland. “We’ve had a realistic level of job destruction, and those jobs aren’t coming back.”
So other than funding the U.S. government with a bunch of money so they can bomb more Muslims and make them even more pissed off at the U.S. (is that even fricking possible?!?), there's no good reason to convert it to a dividend from the subsidiary, paid to the U.S. Apple headquarters (which is, from an accounting perspective, how it would have to be handled).
What I don't understand about countries like the UK allowing this to happen is not the simple equation of lost tax revenues but the fact that a UK company that wants to compete with Apple or one of the other companies not paying taxes can't. Basically the UK is asking its companies to pay huge taxes and then compete against companies that don't.
This means that Apple can operate in most of the world's major economies without having to pay 20-40% of its profits to the governments. The local companies often do. Minimally this gives the tax avoiding companies that much more to dump into marketing, research, etc while still returning a healthy profit to their shareholders.
So when looking at the losses, the UK Germany and so on, should not just look at the lost taxes but the lost benefits of having the next Facebook, Apple, Google, etc be born in their countries. What is Google worth to the US beyond simple corporate tax revenues? I suspect that at first blush that having a Google in your country would be worth a shocking amount.
I actually like an arguement made before the Australian Royal Commission into tax avoidances many years ago. I think it was one of the Packers who said something along the lines of, "We have a moral and legal obligation to pay the government as little tax as possible. We will always pay the minimum required. If you want us to pay more tax then change the laws." (paraphrased since I can't find the actual quote).
Which is all quite true. I myself don't donate anything to the government and I do everything within my legal power to minimise the tax I pay. Corporations are no different and if you want to tax them then you need to close the loopholes that allow a company to operate in your country without paying tax. But good luck getting anyone to do that as the business groups then complain and say you'll drive away business with your "high" tax.
Why should Apple or any other corporation get all the benefits of a developed nation including limited liability and patents when they're doing their level best to avoid paying for those benefits? If they want to play these tax avoidance games they should have those benefits withdrawn.
It would be nice if corporations actually paid tax in the country where they actually earned the money. Apple, like other giant corporates, earns billions in Australia and pays bugger all tax, carefully moving the "profit" to other low tax countries.
If the country required taxes paid on where the profits were earned this wouldn't be a problem would it? Don't blame giant corporations for not being charitable towards your cause, they have shareholders to look after. Instead why not blame your governments, the ones who keep saying they'll close the very loop holes these large corporations use but after "consultation" decide that it's not in the best interest (reads: a mega corporation convinced them it would cost jobs and they'll make them look bad politically).
Legal definitions invite legal scholars to find loopholes. Even the best intentioned law will have some clever law students finding a way to be employed by finding a way to remain legal enough to survive a court case.
Following the spirit of the law is not part of capitalism, nor part of the American cultural tradition. Argue otherwise all you like, but history shows the truth.
A stockholder should not be punished if the held company is following the law. And good luck trying to word a law that does what you want without penalizing companies and stockholders that are legit.
Your idealism is adorably ignorant. And probably dangerous.
"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. "
Euhhh... nope, this isn't the case, you can read it in the topic's brief: "Apple holds $181.1 billion in offshore profits". That is, Apple holds $181.1 billion that neither goes to jobs, nor R&D, nor nothing: it's just money sitting in a bank, which means you just could tax Apple $181.1 billion and they still shouldn't need to fire any employee, nor close any R&D program, nor rise its products' prices in the least.
Of course, I'm not saying we should tax any company for whatever their net profits are, nor that my "plain" explanation is quite naive, just that doing so wouldn't be the hell you are purporting. You also say "At any rate, a tax on them is simply a tax on the customers in the end" which, in fact, it isn't: any company making more than "fair" profit can indeed lower it (i.e. because of increased taxes) without touching their price tags. All they need is having competition which feels comfortable with that lower profit level.
It is in that light that we should view their comments about "Tax being just political bs.". It's their job to say that; it's in their interest to say that; they're paid to say that.
Cook didn't say that TAXES are political BS. He said that the QUESTION is political BS. It's a real example of begging the question. The question assumes that Apple owes $50.2B in taxes on overseas profit. They don't owe that money, so it's a BS questions.
I hate Apple and all their works and all their empty promises, but Tim Cook is 100% right about this.
Say Apple did pay those $60 billion in taxes. Would I see the end results of that? Would they pave some of the awful roads around here or fix some of the bridges with an "F" rating? In my daily life it would make absolutely no difference at all.
Only the State obtains its revenue by coercion. - Murray Rothbard
Taxing them more simply means higher prices for all the customers. That would be us, not them.
I see this misconception bandied about freely often by people who are attempting to sell a line of bullshit, and that's precisely what this is. The first sentence is fine. Yes, taxing them more means higher prices for the customers. The second sentence is cockery. When you make the corporations pay taxes, we only pay more for those goods when we buy those goods. I can easily choose not to purchase Apple hardware — in fact, I have never bought any of it new, and haven't owned a Mac in almost a decade — and then I do not pay those taxes. Only the people who buy the products do. That is why taxing the corporations is the absolute best solution in every way; the costs of paying the taxes are baked into the corporation's products and services, and then only their customers have to pay. So in fact, your conclusion is diametrically opposed to the truth; taxing the corporations is the only way that the taxes aren't paid by "us", meaning We The People. Instead, the corporations are only paid for by "them", meaning the people who buy the products. Trying to lump all of The People together in cases where that clearly does not make sense is a logical fallacy, and you're trying to sell us a line of bullshit.
TL;DR: It's good when taxes are baked into the prices of products, because then only the people who purchase those products have to pay for the taxes, as opposed to the situation where you permit corporations to avoid taxes, and then the middle class has to bear the majority of the tax burden directly even when they are frugal.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
tl;dr version: If the market would bear a higher price, they'd already be charging it.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
You don't actually understand why capital gains are taxed at the rate they're taxed, do you?
Yes, actually. The rate was dropped significantly shortly after Bush entered office to help out rich cronies. The economy did quite well in the previous, higher rate on capital gains.
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.
. Wrong. There's a third and obvious option, lower profits. Apple's profit margin isn't some fixed value and higher expenses (e.g. increased tax payments) can't arbitrarily be covered by raising prices or cutting expenses elsewhere. If Apple could raise prices as easily as you imply they would have already done so to maximize their profits. If Apple could cut their expenses somewhere (e.g. salaries) in a way that wouldn't affect their profits they would have already done so to maximize their profits.
The last time I checked, dodging taxes was a criminal offense. The sole purpose of Tom's business model is to avoid taxes. This is a case of simple collusion, on a global scale.
The last time I checked, dodging taxes was a criminal offense.
Time for you to look up tax avoidance vs. tax evasion.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Capital gains are taxed at a low rate because the owning class has used their money to succesfully lobby low taxes for themselves. Since they're also destroying the middle class, the poor have little income to tax, and a modern society simply cannot function without expensive infrastructure, the end result is a country headed for bankruptcy.
But that's okay, the rich parasites will simply suck another host dry once the current one dies.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
There is a huge tax problem in the US. There is an 80,000 page tax code, where 79,500(1) are favoritism, cronyism, and the results of bribery. Yeah, Apple should probably be paying more, but given the current tax code they are working within the law. You don't have to like it, but if that was not the case people would be in jail for tax evasion (especially given the amount of money we are discussing).
Not only does all this favoritism mean that companies like Apple legally pay a fraction of what small businesses pay, but there is something worse afoot. Namely, that there is a massive economy built on top of this pile of corruption. I laugh when I hear people talk about flat tax or "fixing" the tax code because they ignore that the US has at least 50Billion dollars a year relying on our current corrupt tax system.
A flat tax, or even corrections to make the tax code fair, are going to put massive numbers of CPAs, Attorneys, and Accountants out of work. The few people leaving from the IRS that you hear about on rare occasions is quite frankly peanuts. Where does everyone employed by H&R Block, Quickbooks, Kiplingers, and thousands of Law firms work if we fix the tax code? Those are some high paying jobs too, so lots of middle class income requires them to be there or they take a massive hit as well.
While I absolutely want fairness, if shitty laws are on the books why is it wrong to follow the law exactly? We need to fix it, but it's not like waving a magic wand or voting for "that guy/gal" will fix the problems. I'll get off my soap box.
(1) Giving 500 pages for title, cover page, index, and boasting by writers
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
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