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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.
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.
No they do not pay taxes where they earn the profits.
They cheat by transferring the profits to countries with low taxes. It's disgusting behaviour.
Look up transfer pricing and weep,
"Cats like plain crisps"
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.
"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.
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.'"
No, jackass, transfer pricing is a reaction to thievery. You apparently truly believe that i should be a slave to the government for half of my life because I'm successful.
You have to be a slave to the government for half of your life because corporations are permitted to avoid taxation in this manner. If the corporations paid their tax burden and didn't manage to shift profits to other countries, then you wouldn't have to pay nearly so much to maintain the system that they're profiting from far more than you are, and then not paying to maintain.
I'm willing to pay my share, but I pay 37 people's share.
Then you should be against corporate tax avoidance, not in favor of it. The corporations are the only ones who can afford to get laws passed, and if they had to pay the taxes, then they would pursue efficiency in our government. They don't, so they don't give a shit.
"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 have it wrong. If you are saying you have to work 1/2 your life because of taxes (which you claim are being withheld by companies) and i say no its the Government. Its swelled up in size and now wastes way more money by being such a beheamoth.
Yes, that is because we have permitted corporations to dodge taxes. Make the corporations bear the tax burden, and you'll see that situation cleaned up in a hot second.
Take this BS education system. More s-ent than anywhere with terrible results. Then they suckered in whole generations with the EVERYONE MUST got to college.
I personally want to live amongst a more educated populace. You may think that's wasted money, but you can readily see what the alternative looks like in the midwest, where most of the welfare mouths are. Most of them are white, and most of them either stopped before college, or didn't even finish high school. Maybe that money isn't wasted after all. But corporations are spending money to influence education in ways that will profit them, and they don't have to pay for the results, so what do they care? So once again, you make the corporations pay the tax bill, and they will take care of the inefficiencies.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
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.