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Cupertino's Mayor: Apple 'Abuses Us' By Not Paying Taxes (theguardian.com)
An anonymous reader shares a report on The Guardian: Apple pays a 2.3% effective tax rate on its $181bn in cash held offshore, according to Citizens for Tax Justice, a not-for-profit research group focusing on tax policy. Citizens for Tax Justice estimates that Apple would owe $59.2bn in U.S. taxes if the money weren't funneled into offshore shell accounts. Criticism over the company's offshore tax schemes has become more pointed in recent months, both locally in Cupertino and from Apple's own staff. At a recent Cupertino city council meeting, some residents protested about a lack of funding for public projects, Barry Chang, Mayor of Cupertino said: "They ball up the paper and throw it, and they say 'You're making all the wrong decisions'," Chang said. "In the meantime, Apple is not willing to pay a dime. They're making profit, and they should share the responsibility for our city, but they won't. They abuse us."
Hmmm .. from Apple's new headquarters gains approval of Cupertino City Council back in 2013
The Cupertino City Council voted unanimously Tuesday to reduce the annual tax break it gives Apple (AAPL) -- America's most valuable company by market capitalization, with a net income last year of $41.7 billion -- by 15 percent. Having wrung that concession from its richest corporate resident, the council then voted unanimously to give its final blessing to Apple's proposed new headquarters. The spaceship-shaped building has now officially landed.
Back in 1997, when Apple was on the verge of collapse, the city agreed to return 50 percent of the taxes generated each year from Apple's business-to-business sales as a way to help maintain the company's health and, more importantly, its Cupertino address.
Sounds like someone made a deal with the devil and now has a bit of buyers remorse.
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Dear Mayor Chang,
What part of "building permit" and "property taxes" don't you understand? If you folks let Apple build a giant doughnut in Cupertino without the city collecting adequate local taxes on it, you can hardly blame us, can you...?
your friend,
Tim Cook
There shouldn't be a negotiation and they shouldn't be asking Apple (or anyone else) to volunteer. There should be a law, the amount owed should be definite, failure to pay would be a crime. That law should apply to everyone, equally.
Until the government, at all levels, fixes their shit, their shit is going to be broken. I am tired of hearing about Apple or Google or Facebook doing NOTHING wrong, but accused of something that sounds like (but is not) a crime.
We have set up a system where there is a game, and good players are going to game the system. So fix the system or fix the game.
City Government: Please come to our city, Big Business! We'll give you incredible tax breaks! We'll practically pay you just for existing here!
Big Business: I don't know. That "practically" sounds kind of hesitant. Besides, there's a bunch of other towns down the road that might offer us a better deal.
City Government: Fine, we will literally pay to just to keep your corporate headquarters here. We'll give you the land for a pittance. We'll fast-track the permitting process. We'll give you a zoning variance. None of the city ordinances will apply to you. And no direct taxes on you, we promise. We'll make it up by taxing our citizens, who will probably mostly be working for you from here on out.
Citizen: Hold on. I was busy with my life just then, but it sounds like you're going to let some huge company move in and take over, and use my taxes to build a new thirty-story corporate headquarters in my front yard, and then crank up my taxes even more to make up for the taxes you spent on them?
City Government: Yes, but you'll be able to afford it, because you can get a good job at the company!
Citizen: I like my job now. I don't want to fucking work for those fuckers. I don't want a bunch of douches coming in and putting in 17 Starbuckses on the same street and making us all have to sort our garbage into eight separate bins and raising the rents to ridiculous levels so we have to all move out.
City Government: We hear your concerns. But we really want more tax money to play with. So, fuck you. Leave town if you want. Don't let the screen door hit you on the way out.
[Decades later.]
City Government: Hey, Big Business, uh, while our tax revenue has been growing continuously for decades now, it turns out that our expenditures have been growing even faster, because it turns out that a lot of money is not infinite money. We need infinite money. All our planning is based on infinite money. You need to give us more money. That'll get us closer to infinite money.
Big Business: Fuck you. Learn to do math, assholes.
City Government: I'm afraid we really must insist. We're going to raise your taxes.
Big Business: Then I guess we'll just move down the road to the next city. See you later.
City Government: But... but... you can't!
[But it turns out they can. Return to top and start again.]
Don't know why this is marked as being a Troll, it's factual information. The US is the only developed nation in the world that taxes companies based on worldwide profits, not just profits earned in the US. Yes, you get a tax credit for income tax you pay to other countries, but the end result is you end up paying the high US corporate income tax rate on income earned everywhere in the world, whereas foreign companies only pay the high US tax rate on income earned in the US, and the lower tax rates of income earned in other countries. This makes foreign companies a competitive advantage over US companies. Not a great policy in my opinion.
There should be a law that says "if you have any presence at all in our country, all the money you earn in other countries, and that is taxed in those other countries, should be taxed here too?
Sounds like a stupid law.
It is not stupid. As the law stands you deduct taxes already paid to other governments from the tax you own USA. Lets say 100 million dollars in USA. Then Apple sets up a post box in Banana Republic, and parks all the profits there and pays a generous 1 million dollars to the government of Banana Republic. Then it owes only 99 million to USA. The law is intended to prevent a race to the bottom. Competing governments reduce their tax rates to woe the companies and the corporations play one jurisdiction against another.
That is the current law. All taxes paid to all other governments count as though they have been paid to the US government. But, if they tax you less than USA, you pay the difference to the USA. The only glitch is, current law taxes the profits only when they are brought into the USA. So they keep the profits indefinitely off shore to dodge the tax. Hoping for an amnesty and bring it home with a lower rate to wipe the slate clean.
We should change the law to make these corporations that are keeping profits abroad from being listed in US Regulated stock exchanges. That will bring the profits home and they will pay the taxes. Or we could list them as foreign businesses with severe restrictions in lobbying and campaign contributions. That would also create a penalty for gaming our tax code.
Already the corporations have shifted most of their tax burden to the individuals. If the corporations paid the same effective rate as they paid under Ronald Reagan individual tax payers will get an immense tax relief. We can take our personal income tax rates from 36.3% top rate down to 20% top rate or even a flat tax of 15%.
All of them will shout tax cuts. Individuals and middle class gets a few bones thrown to us. The bulk of it goes to these corporations.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact