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Apple Japan Unit Ordered To Pay $118M Tax For Underreporting Income (reuters.com)
Apple's unit in Japan was ordered to pay 12 billion yen, or $118 million tax by local authorities after they determined it had underreported income. Apple has since reportedly paid the sum. From a Reuters report: The Tokyo Regional Taxation Bureau determined that the unit, which sends part of its profits earned from fees paid by Japan subscribers to another Apple unit in Ireland to pay for software licensing, had not been paying a withholding tax on those earnings in Japan, according to broadcaster NHK. Apple and other multinational companies have come under much tax scrutiny from governments around the world. The European Union has ordered Apple to pay Ireland 13 billion euros ($14.6 billion) in back taxes after ruling it had received illegal state aid. Apple and Dublin plan to appeal the ruling, arguing the tax treatment was in line with EU law.
Apple failed to submit $118M of taxes for just their Japan iTunes unit. The actual revenue in question would be multiples of this amount since $118M represents just the taxes owed. This likely means Apple has been failing to pay this over several years.
That isn't in Econ 101. Did you even take Economics?
Econ 101 spends most of its time explaining supply and demand.
Econ 201 usually talks about how taxing a company too much or disproportionately can have negative effects as if it prevents company growth then over all the amount of money collected will be much lower as with lower employees and lower employee salary will lower the currency that is in movement.
The real problem is the rich has resources to take advantage of all the loopholes in the tax system which was intentionally made to help the poor. However the poor do not have the resources to leverage such advantages. While the Rich looks poor to the government and rich to the share holders. Because they are good at keeping the money moving. While the money not being used productively.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
I sure hope that all the Governments that are raking through Apple's books trying to find a hidden payday, take some time out to look at all the other multinational corporations that have been doing exactly the same thing for as long, and often longer, than Apple.
How much is very little?
I do not want your cheap brainburning drugs. They are useless for work. And I am a working man today.
Seriously, you think that kind of systems work is boring, and it kind of is, but jeez can they ever file a useful bug report. It'll be a precise description of what is incorrect and the precise conditions under which the problem occurs, not some enigma wrapped in a turd.
These guys are very big on precisely the right amount of precision. They'll let a nickel slide, but squeeze a buck til it screams for mercy. One thing I learned about their mindset is this: if there is any doubt, make the assumption that's most beneficial to the client and then see if you're called on it. So this is not a case of Tim Cook twirling his evil mustache, it's a case of the finance guys doing their finance guy thing and the tax guys calling them on it. It's a bit like intentional fouling in basketball.
Corporations aren't evil, they're amoral but at the same time careful to avoid breaking rules where they'll get caught. The underlying problem is that the rules make a lot of sketchy practices legal, this kind of situation where they're "caught" is just the penumbra of the problem. The real problem is that the rules suck, and the rules are set by politicians.
The predictable anti-corporate reaction that occurs when something like this comes out is the left wing version of the right wing's vilification of IRS auditors -- who by the way are often some of the nicest guys you'll ever meet. IRS auditors are the public face of a system that everyone knows is over-complicated, and full of loopholes and gotchas that favor the wealthy and powerful. People don't like them because their job is enforcing rules you don't like. But who made the rules? The politicians. And when a politician is for reducing the number of auditors, it's not because he wants to help you. As one auditor I knew said, the rules have been written so there's really no place an ordinary person can hide income, and that makes the kind of audits people like you face perfunctory affairs. Cutting IRS staff is really all about making sure that the big boys aren't challenged on those tricky and aggressive calls they make. You need those armies of auditors to go after the people who don't want to abide even by rules that were written to favor them.
So whenever politicians left or right tries to get you riled up about some inevitable feature of the system they have created, know that you're being treated like a useful idiot.
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How much is very little?
The bottom quintile pays less than half a percent of all federal income taxes.
Depends on just how poor they are. Which depends, among other things, on whether they're married, how many kids they have, etc.
Also depends on what you are counting when you talk about the poor paying taxes. Usually when people say that, they're talking Income Taxes. They usually ignore the SSA and sales taxes that the poor pay.
Suffice it to say, depending on just what definition of "poor" and "taxes" you are using, the poor pay somewhere between zero and about 30% of their income in taxes (all taxes, not just Federal Income).
"I do not agree with what you say, but I will defend to the death your right to say it"
Your statement is true but very misleading. It doesn't matter what percentage of the total federal income tax is paid by the poor. What really matters is what PERCENTAGE OF THEIR OWN INCOME goes to taxes. You make it sound like the kid making $5 per hour only pays 2.5 cents in taxes per hour.
Warren Buffet pays way more dollars in taxes than his secretary, but he only loses 15% of his income. The secretary is technically paying fewer dollars, but he is losing 30% of what he makes. It's a proportionally heavier burden placed upon the person who is less able to handle it.
The "contract" was illegal to begin with. Also this is a different case but it uses the same double-irish tax evasion scheme.
That's more bullshit. The corporations can't make the rules, unless the rules let them.
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Which in our system is because we let them. Because we let them use us like tools.
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AC's comment could be taken in 2 very different ways:
Supply side: If a company is taxed more it just raises its prices. Customers are really paying the tax.
Progressive: a bunch of lobbyists run around and get special tax shelters and loopholes. (Although the companies that do this the most donate to progressive causes, e.g. Google, General Electric, Apple, etc).
Frankly both of those are true to some extent.
By Econ 101 he was saying you fundamentally understand nothing about economics if you don't know that.
It is of great win. Much loss to fruit company.
Many tears, much sad.
-- Tigger warning: This post may contain tiggers! --
First of all, some 2/3s of US corps. don't owe any taxes in any given year, since they aren't profitable enough to have positive tax rate.
But the OP is probably talking about the elasticity of corporate taxes means that by and large, individuals pay the taxes be they shareholders, employees, or consumers.
The CBO produced a report "THE INCIDENCE OF THE CORPORATE INCOME TAX" in which it states
"A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax, but that money must come from somewhere: from reduced returns to investors in the company, lower wages to its workers, or higher prices that consumers pay for the products the company produces."
And it goes on to say
"Although economists are far from a consensus about exactly who bears how much of the burden of the corporate income tax, the existing studies highlight the significant types of economic mechanisms as well as the empirical estimates necessary for further quantifying the burdens. CBO's review of the studies yields the following conclusions:
o The short-term burden of the corporate tax probably falls on stockholders or investors in general, but may fall on some more than on others, because not all investments are taxed at the same rate.
o The long-term burden of corporate or dividend taxation is unlikely to rest fully on corporate equity, because it will remain there only if marginal investment is not affected by those taxes. Most economists believe that the corporate tax system has some effect on investment decisions.
o Most evidence from closed-economy, general-equilibrium models suggests that given reasonable parameters, the long-term incidence of the corporate tax falls on capital in general.
o In the context of international capital mobility, the burden of the corporate tax may be shifted onto immobile factors (such as labor or land), but only to the degree that the capital and outputs of different countries can be substituted.
o In the very long term, the burden is likely to be shifted in part to labor, if the corporate tax dampens capital accumulation.
If a company is taxed more it just raises its prices. Customers are really paying the tax.
And ... this is the correct thing to do.
This way only the people who buy Apple products have to pay extra, not everybody.
No sig today...
I've only ever done the opposite, and I've only ever been poor. Perhaps I should give this "underreporting" thing a try.
They have more say because voters are apathetic. This makes politicians cheap to buy.
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Agreed.