Apple Paid $6 Billion in Federal Income Tax in 2012, 1/40 of All U.S. Corporate Income Tax Collected

It is astounding that Apple pays 1/40 (2.5%) of ALL corporate taxes collected nationwide. Their revenues are not as high as some corporations, but because they have high margins, they have high taxable income.

It is right and proper that divisions located in foreign countries not also pay tax here. Them's the rules. In fact if Apple were to be so bold as to bring money back to the US, they would be taxed AGAIN according to current law and contrary to every other major country. If anything they should relocate their HQ to shut people up. But they are "patriotic".

As for Nevada, that does not avoid federal income tax, only state income tax.

Our country is vastly overtaxed (18% of GDP) and overspends (25% of GDP) which sucks oxygen out of the free market directly and by diverting investment capital (18%-25%=-7%) to government bonds to finance the debt. If that was not happening those investors would have to chase commercial paper (or infrastructure bonds!) which would help every company in the US who wants to expand and hire. The reverse is at play now.

I sincerely believe this post is on topic. That is my intention.

Rocketman

The US should change to a territorial system. That means any money made in the US is going to be taxed before it leaves the country. AKA if it is going over seas then you are getting tax in the US.

Now remove the tax on money coming back into the US but they also lose the deduction they can claim now on paying foreign taxes. Lower the over all rate. Changing to t he territorial system would increase US corporate tax returns.
Now this is being fault tooth and nail by multinational company because in the end they eat the tax increase. Company that are not multinational or US only based get OMG lower taxes. A lot of other countries already have this system

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Morshu9001 said:

No, they'll lower the prices, just like how they raise prices when taxes go up. You'd also have to raise the sales tax a bit. The idea is to switch the tax system over to a non-avoidable method.

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oh cute you believe that. It been shown time and time again that it does not happen that way.

Morshu9001 said:

Agreed. I can't believe they didn't do some big cuts during the Fiscal Cliff negotiations. One of the few things I hate about Obama is how he's spineless like that. But I still support him over Romney.

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How is he spineless? He said he was getting what he wanted, and he got what he wanted. You expected him to cut anything? Why?

skunk said:

Just goes to show how little anybody else is paying. Something's definitely broken.

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Perhaps other companies have higher deductions for operating costs associated with manufacturing/production.
Take intel for instance, their fabs are expensive to build, sustain and maintain. I am sure they benefit greatly from depreciation deductions.
That's not to say other companies like intel take advantage of avoiding legally avoiding taxes by exporting their final assembly off shore.

"The spirit of tax law" To use that money to kill people in wars overseas. (y)

Rocketman said:

Our country is vastly overtaxed (18% of GDP) and overspends (25% of GDP) which sucks oxygen out of the free market (25%-18%=7%) by diverting investment capital to government bonds to finance the debt. If that was not happening those investors would have to chase commercial paper which would help every company in the US who wants to expand and hire. The reverse is at play now.

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^^^ The main reason I like the Republican party better. They understand this. Taxing and spending more is just a bad idea because government is inefficient by design.

6b is peanuts vs the fortune the company made in a year

rei101 said:

"The spirit of tax law" To use that money to kill people in wars overseas. (y)

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Yep. It's a pretty interesting justification to give. Companies avoid giving money to Israel.

Welcome to fiscal engineering... in Europe, 'we' enjoy these tactics... up to the point of companies declaring loses (the last one I read was Microsoft in Spain declaring 28 M€ loses...).

And of course, Apple is no less. I have no idea how they do it in the US (although I am surprised they pay that much when they could practically pay zero if they wanted...) but I guess they have their way, and of course, US politicians don't do anything to change it like their colleagues in Brussels.

Until all major areas of interest for these companies change the laws so that they actually pay what they have to pay, we will keep reading these news, but someone is benefiting from this... of course (and not just Apple

WestonHarvey1 said:

How is he spineless? He said he was getting what he wanted, and he got what he wanted. You expected him to cut anything? Why?

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Cause stuff needs to be cut, and cutting stuff angers unions, special interest groups, etc. Do you realize that the system is set up to elect those who spend more and kick out those who cut spending?

skunk said:

It wouldn't be at all fair. Sales tax is regressive.

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http://en.wikipedia.org/wiki/Regressive_tax

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We pay a hidden "sales tax" in the form of higher prices right now. Do you really think that the cost of the taxes isn't built into the prices that companies set for their products?

In Europe, they have lower corporate income taxes than the US, in exchange for the value added tax, which is like a sales tax. The problem they have is that they didn't scrap the corporate tax altogether. Therefore, they have a 17-25% VAT on most products, combined with the effects of corporate taxes. That's a big reason why products cost so much more over there.

At the same time, if we eliminated the corporate income tax, we could increase the personal income tax on dividends, or income in general. That would offset the regressiveness of a sales tax. Part of the reason the now-partially-expired "Bush tax cuts" reduced the rates on qualifying dividends (i.e. dividends paid out of US earnings) was to offset the impact of double-taxation.

rei101 said:

"The spirit of tax law" To use that money to kill people in wars overseas. (y)

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That's better than killing them in wars here.

starflyer said:

I like this. This way everyone would pay their "fair share". (including illegals)

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Oh, it *sounds* fair. But only until you take a look with real numbers involved.

The poor spend the vast majority of their income on basic necessities.
The middle class spend a significant portion of their income on necessities and small luxuries.
The genuinely wealthy spend a small portion of their income *period*.

Limiting taxes to sales tax (or similarly structured taxes like the OP mentioned) means increasing those tax rates. Increasing those tax rates hit those with the least means to pay hardest.

If you're normally left with 10% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 1%.

If you're normally left with 30% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 23%.

If you're normally left with 80% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 78%.

Couple those percentages with appropriate income figures, and you see the real problem.
The poor family, making $25K/year is able to save $250/year instead of $2500/year.
The middle class family, making $100K/year is able to save 23K/year instead of 30K/year.
The wealthy family, making $1M/year is able to save 780K/year instead of 800K/year.

Getting tires replace for the family car will cost 3-5 years worth of savings for the poor family, about a week's or two worth for the middle class family, and less than a day for the wealthy family, even if the tires for their car cost at about 5x as much.

When you get into the 1B/year folks, things get even more extreme.

Sales taxes are regressive. They most hurt the people least able to take the pain.

Couple that with the fact that the poor folks are stuck buying used or cheap gear, they end up having to replace their gear more often, leading to further cost increases. There's an expression that says:

Only the rich can afford to buy cheap shoes.

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I'll explain it if I need to, but you ought to be able to figure it out.

Morshu9001 said:

^^^ The main reason I like the Republican party better. They understand this. Taxing and spending more is just a bad idea because government is inefficient by design.

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I agree. We shouldn't go to wars on the credit card
Medicare D on the credit card...

Thanks Repubs....they spend just as much as the other party....and without raising taxes makes that policy more dangerous as it increases deficits. Let's see those policy's pass in that fashion if tax increases were part of it.

I think it's more astounding that total corporation tax is only $240bn a year. That is a joke for the size of country the US is.

How big are the tax loopholes in the US, is it just a bus or an oil tanker you can get through them?

brad.c said:

A good idea except corporations are given the rights of an individual. They should therefore pay taxes as such.

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They are treated as legal persons. That isn't the same as being given the rights of an individual (e.g. they can't vote). In any case there are already certain corporations (called S corporations) that are not double-taxed, so the precedent is already there.

Morshu9001 said:

^^^ The main reason I like the Republican party better. They understand this. Taxing and spending more is just a bad idea because government is inefficient by design.

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They say all of those things, but when have they actually practiced it in the last 40 years?

Plus, they only want to cut entitlement programs. They won't touch the Defense Budget. Democrats won't touch entitlement. We're screwed either way.

tbrinkma said:

Oh, it *sounds* fair. But only until you take a look with real numbers involved.

The poor spend the vast majority of their income on basic necessities.
The middle class spend a significant portion of their income on necessities and small luxuries.
The genuinely wealthy spend a small portion of their income *period*.

Limiting taxes to sales tax (or similarly structured taxes like the OP mentioned) means increasing those tax rates. Increasing those tax rates hit those with the least means to pay hardest.

If you're normally left with 10% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 1%.

If you're normally left with 40% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 34%.

If you're normally left with 90% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 89%.

Sales taxes are regressive. They most hurt the people least able to take the pain.

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Put in a tax credit for the necessities based on your income level.

Morshu9001 said:

No, they'll lower the prices, just like how they raise prices when taxes go up. You'd also have to raise the sales tax a bit. The idea is to switch the tax system over to a non-avoidable method.

But the one problem is that sales tax is not as fine a tool as income tax. Still, it's worth it.

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People seem to think that stuff happens in a vacuum, and that if one company tries to pay the executives more and not lower prices, than another company won't come along, and use that price advantage to take business away from the first company and make more money in the long run. This lack of understanding of how companies in a free-ish market works is one of the most fundamental problems in US politics.

sportsfan said:

I agree. We shouldn't go to wars on the credit card
Medicare D on the credit card...

Thanks Repubs....they spend just as much as the other party....and without raising taxes makes that policy more dangerous as it increases deficits. Let's see those policy's pass in that fashion if tax increases were part of it.

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Well, Medicare Part D came in at a lower cost than originally projected. Plus when the Democrats came to power they just expanded the program (the "donut hole" they all brag about getting rid of).

Both parties engage in shenanigans. Neither party really cuts spending, since most people like the spending that benefits them.

Morshu9001 said:

^^^ The main reason I like the Republican party better. They understand this. Taxing and spending more is just a bad idea because government is inefficient by design.

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Is this the same Republican Party that started two wars and enacted Medicaid Part D without funding any of it?

Both parties are as bad as each other on that front.

Get rid of corporate taxation of the companies and they will pass on these savings to consumers? Yeah right, you'd see the same prices as now, with corps bringing in more cash.

starflyer said:

Put in a tax credit for the necessities based on your income level.

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That's what the FairTax attempts to do. It gives a prebate to everybody based on people in the household. The first $x you spend a month is not taxed, no matter what you spend it on.

tbrinkma said:

Oh, it *sounds* fair. But only until you take a look with real numbers involved.

The poor spend the vast majority of their income on basic necessities.
The middle class spend a significant portion of their income on necessities and small luxuries.
The genuinely wealthy spend a small portion of their income *period*.

Limiting taxes to sales tax (or similarly structured taxes like the OP mentioned) means increasing those tax rates. Increasing those tax rates hit those with the least means to pay hardest.

If you're normally left with 10% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 1%.

If you're normally left with 40% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 34%.

If you're normally left with 90% of your income left over, and sales taxes rise by 10%, your savings ability has just dropped to 89%.

Sales taxes are regressive. They most hurt the people least able to take the pain.

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This is only assuming you increase all sales taxes equally. You could lower sales tax on food to 5% and raise non essential items to 15% if you chose to.

quagmire said:

They say all of those things, but when have they actually practiced it in the last 40 years?

Plus, they only want to cut entitlement programs. They won't touch the Defense Budget. Democrats won't touch entitlement. We're screwed either way.

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Unfortunately, when they compromise, it usually means they decide not to cut anything when what we need is for them to cut both.