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Apple Is Moving Its Entire International iTunes Business To Ireland (billboard.com)
Starting February 5th, Apple will be moving its entire international iTunes business from Luxembourg to its European headquarters in Cork, Ireland, according to a note sent to developers this week. The non-U.S. iTunes business consists of Apple Music and the individual stores for iTunes, iBooks and Apps. Internationally, iTunes is available in over 140 countries, while Apple Music is streaming in roughly 115 territories. Billboard reports: Apple announced its intentions to move its iTunes biz to Ireland in September when it transferred an estimated $9 billion of iTunes assets. At that time it also shuffled all existing developer contracts to Ireland-based Apple Distribution International. Like Luxembourg, Ireland is known for being a low-tax haven for international businesses. Last month, both Apple and Ireland announced they would appeal a record $14 billion tax bill from the European Commission, which earlier found it had been underpaying tax on profits across the European bloc from 2003 to 2014. Apple today is the biggest private employer in Cork, the Irish Republic's second-largest city, with a workforce exceeding 5,500. Economists estimate Apple's Cork operation pumps around $17 billion annually in salaries, tax and investment into the Irish economy.
They'll win out in the end, and the loser will be their taxpayers...
From the summary:
Apple today is the biggest private employer in Cork, the Irish Republic's second-largest city, with a workforce exceeding 5,500. Economists estimate Apple's Cork operation pumps around $17 billion annually in salaries, tax and investment into the Irish economy.
$17,000,000 annually divided by 5,500 employees is over $3,000,000 per employee per annum of economic impact. If that's what it means to be a loser, then please sign me up! I'll talk to my city council and I am relatively certain I can get them on board.
First, they're too complex. Second, after all is said and done they're too high.
Hey Head Cheeto! Fix the damned tax laws that let this shit happen before figuring out who builds the damned fence!
Yea, money gained in Ireland is not money "lost to the U.S.". These are profits from international operations, Apple already paid taxes on them in the countries where they were earned. We don't get to tax businesses in other countries because they don't generate costs in the US.
Imagine your US company opens a subsidiary in France. That subsidiary pays 33% in corporate income taxes. If your subsidiary was forced to also pay taxes in the US (California), then your total tax rate is 33% France, 9% California, and 35% federal, giving you about a 60% total tax rate. How well do you think your subsidiary is going to do competing against French companies when it has nearly double the tax rate, and barely is able to reinvest a third of it's profits?
US companies are only successful internationally because they don't have to bring profits back and can park them in low tax havens like Ireland. If that was ever taken away it wouldn't generate more taxes, it would decimate the ability of US companies to expand internationally. There would be a huge incentive to re-incorporate overseas to escape what would be the worst corporate tax system ever devised.
Remember, corporate income taxes are a tax on new capital, it's like eating our seed corn. Corporate income taxes are the dumbest possible way to tax, they are a tax on investment, new business formation, etc, leading people to invest less, create fewer jobs, etc. This year it's likely to pass a tax holiday that will allow repatriation of foreign profits at low rates, and at least $2 trillion dollar in capital will come back in the US. The question we should ask is, why a holiday, why not just abolish it?
Federal corporate income taxes accounted for only 9% of all federal tax receipts. Abolish it, and increase dividend and capital gains rates to regular income tax rates, and it would generate more tax revenues. Now you'd have a system where investment was no longer taxed, just when it was consumed, leading to more investment, more jobs and a higher standard of living.