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

[MacRumors]

The New York Times reports on a congressional investigation into the tax policies of technology giants, including Apple.

The Senate Permanent Subcommittee on Investigations is nearly finished with a year-long investigation into the methods that large technology companies use to avoid paying U.S. corporate income tax. Apple, for its part, allocates some 70 percent of its income to overseas affiliates where tax rates are much lower.

It appears that all of Apple's techniques are legal by U.S. law, though some politicians have said that corporations going to extraordinary lengths to avoid paying income tax and that they are violating the spirit of tax laws.

In its statement, Apple said it paid "an enormous amount of taxes" to local, state and federal governments. "In fiscal 2012 we paid $6 billion in federal corporate income taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government," it said.

Apple was one of the first companies to use the accounting scheme called a "Double Irish With a Dutch Sandwich", where profits are routed through Irish and Dutch subsidiaries before finally landing in the Caribbean. Now, hundreds of companies use those methods.

Apple also has moved revenue to its Braeburn subsidiary in Nevada and International locales where the company pays little to no tax.

Note: Due to the inevitable political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

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

[blacktape242]

"and its gone......"

I hope someone gets that joke....

[starflyer]

At our current spending rate that will last us about a 1/2 day.

We don't have a revenue problem.

[Morshu9001]

Originally Posted by starflyer

At our current spending rate that will last us about a 1/2 day.

We don't have a revenue problem.

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.

[starflyer]

Originally Posted by Morshu9001

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.

Plus everyone's social security tax is going up 2%. So much for only incomes of $250,000 and above going up. $1500 is important to my family.

[Geckotek]

Originally Posted by starflyer

Plus everyone's social security tax is going up 2%. So much for only incomes of $250,000 and above going up. $1500 is important to my family.

Although it's not really "going up", but a temporary deduction is expiring. Not the same thing.

[RyanG]

Originally Posted by starflyer

Plus everyone's social security tax is going up 2%. So much for only incomes of $250,000 and above going up. $1500 is important to my family.

Are you that ignorant? The SS tax is retreating back to its ORIGINAL amount. Welcome to 2010 where the tax holiday was passed, but opposed by republicans (I'm republican but your post sounded against Obama). Please, before making any financial related posts, learn a thing or two.

[diane143]

Originally Posted by starflyer

Plus everyone's social security tax is going up 2%. So much for only incomes of $250,000 and above going up. $1500 is important to my family.

I went through a couple more pages and didn't see a response, so here goes.

2 years ago, they dropped the SS rate by 2%. So they're just putting it back to where it was. Employers have been paying the extra 2% (6.2%) all along.

[WestonHarvey1]

Originally Posted by Morshu9001

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.

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?

[Morshu9001]

Originally Posted by WestonHarvey1

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?

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?

[MacDav]

Originally Posted by Morshu9001

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.

At this point what does Romney have to do with it?

[imageWIS]

Originally Posted by starflyer

At our current spending rate that will last us about a 1/2 day.

We don't have a revenue problem.

It's a dual problem, both revenue has to be increased AND spending has to be cut.

----------

Originally Posted by hipnetic

"Tax" is just newspeak for theft. When the government steals your money, it's called a tax. When an individual steals your money, it's appropriately called theft.

Nonsense. Tax is the cost you pay for civilization.

[hipnetic]

Originally Posted by skunk

A government has to provide services in return. Tax is a fee.

I'm not interested in their services. But they won't let me opt out, and take my money by force. Hence, it is theft.

Originally Posted by imageWIS

Nonsense. Tax is the cost you pay for civilization.

Oh dear. We wouldn't have civilization without government and taxes?

Originally Posted by quagmire

So how do you think the government should operate on? Fairy dust? Your tax money goes into paying for the Defense Budget, goes into paying for the airports, roads, bridges, rails, etc that you enjoy every day, among other functions.

Those things can all be provided by the free market. And they'd be better quality, and less expensive. There was no "Defense Budget" when the early Americans fought back the British.

Oh well...I see that I'm wasting my time in this thread.

[quagmire]

Originally Posted by hipnetic

Those things can all be provided by the free market. And they'd be better quality, and less expensive. There was no "Defense Budget" when the early Americans fought back the British.

Oh well...I see that I'm wasting my time in this thread.

Who in the free market would maintain the nations huge highway system( do you even know why we have highways?) Who would maintain the airports and ATC? The airlines don't want to. Their profits are thin enough. You think Lockheed will build a F-22 because they are patriotic and want to defend the US? The free market doesn't give a crap about the US.

I'm sick and tired of people who claim the free market is the answer to everything. It can't do everything. It can't be left unchecked.

[skunk]

Originally Posted by hipnetic

I'm not interested in their services. But they won't let me opt out, and take my money by force. Hence, it is theft.

You use their services every single day.

Those things can all be provided by the free market. And they'd be better quality, and less expensive.

Absolute nonsense.

Oh well...I see that I'm wasting my time in this thread.

This would appear to be true.

[rdowns]

Originally Posted by hipnetic

I'm not interested in their services. But they won't let me opt out, and take my money by force. Hence, it is theft.

Do you really expect anyone to take a comment like that seriously? What are you interested in opting out of?

Your "freedom" protected by the Dept. of Defense?
Relatively clean air and water regulated by the EPA?
Paved roads paid, in part, by the Dept. of Transportation?
Food that won't kill you regulated by the Dept. of Agriculture?
Public power monopolies regulated by the Dept. of Energy?

[Dave00]

Originally Posted by starflyer

At our current spending rate that will last us about a 1/2 day.

We don't have a revenue problem.

I may be overly optimistic that confronting such a statement with facts will do any good, but I will try anyway.
Percentage of GDP in taxes, 2001 (last year of budget balance): 19.5%
Percent GDP in taxes, 2011: 15.4%
Percent GDP in spending, 2000: 18.2%
Percent GDP in spending, 2011: 24.1%
The great majority of the extra spending came from two wars and Medicare Part D. The great majority of the lower taxes came from lowered income and investment tax rates in 2001 and 2003.
There is no way to fix the problem without both decreasing spending and increasing taxes. You want to balance the budget without raising taxes? The last time spending was less than 15.4% was in 1951. You could fix the problem completely by pulling out of Afghanistan, funding Medicare Part D, and letting taxes return to 2001 levels.

Dave

[Sixtafoua]

In related news, 12 billion worth of iPads were bought for US schools.
Lol jk most schools can't even afford paper.

[fins831]

Originally Posted by blacktape242

"and its gone......"

I hope someone gets that joke....

Were going to take your investment and put it in an off shore checking account, invest in precious metals in China, use the interest to take out a mortgage, ANNNNNND its gone....

[TrentS]

Originally Posted by fins831

Were going to take your investment and put it in an off shore checking account, invest in precious metals in China, use the interest to take out a mortgage, ANNNNNND its gone....

"Move out of the way, so costumers with money can be helped!"

[skunk]

Originally Posted by TrentS

"Move out of the way, so costumers with money can be helped!"

Are we talking Karl Lagerfeld here?

[KPOM]

The easy solution is to eliminate the corporate income tax altogether. Perhaps replace it with a small consumption tax on the ultimate buyer. At the end of the day corporations just collect taxes. People (whether customers, employees, or shareholders) ultimately bear the burden of corporate taxes.

Barring that, then just lower the corporate tax rate to what other countries have, and don't tax overseas income (most countries don't). The current system creates a perverse incentive for multi-national companies to leave their profits overseas, since they would wind up paying the difference between 35% and the foreign rate if they brought the money home. We gave a tax holiday to multinationals in 2004 and companies repatriated billions of dollars.

[sportsfan]

What do you think would happen if corporate tax went away?

1. Corporations will lower their service costs
2. Pocket it all for Upper Mgmt bonuses

[Morshu9001]

Originally Posted by sportsfan

What do you think would happen if corporate tax went away?

1. Corporations will lower their service costs
2. Pocket it all for Upper Mgmt bonuses

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.

[SPUY767]

Originally Posted by Morshu9001

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.

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.