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....

[ryuok]

Double Irish With a Dutch Sandwich to go please.

[starflyer]

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

We don't have a revenue problem.

[skunk]

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

[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....

[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.

[macs4nw]

1/40th of ALL corporate taxes collected? Seems like a lot.
Then again they are in the big leagues....

[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

[JPark]

Originally Posted by 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.

It sickens me how much sense that makes yet how little chance it has of happening.

[starflyer]

Originally Posted by 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.

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

[brad.c]

Originally Posted by KPOM

The easy solution is to eliminate the corporate income tax altogether

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

[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.

[sazivad]

Reminder: The New York Times already ran this story.

[Morshu9001]

Originally Posted by 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.

I have the same idea. It's a very smart plan compared to the mess of a system they have now, and it also taxes illegals as someone said.

[starflyer]

Originally Posted by JPark

It sickens me how much sense that makes yet how little chance it has of happening.

It would take power away from the lawmakers so yeah, it's not going to happen.

[dernhelm]

It all makes Machiavelli appear absolutely pedestrian. We need simpler tax laws, Congress. Fewer loopholes; collect your $6B and let them keep the rest of their money invested here in the US.

Instead, you get your $6B, but their money is laundered through 2 other countries before ending up in the Caribbean. It's asinine!

[Morshu9001]

The note at the bottom is funny. I don't really see the point of it, though.

[Rogifan]

Originally Posted by brad.c

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

Oh please, corporations are just individuals (shareholders). Corporate taxes just get passed on to consumers (in many cases who are also shareholders). It might make some people feel good that these big corporations pay taxes but its not good economics.

[skunk]

Originally Posted by starflyer

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

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

Originally Posted by wikipedia

Taxation based on everyday essentials like food (e.g. sales tax, salt tax), clothing (value added tax), transport (fuel tax), energy (carbon tax) and housing (council tax, window tax) is frequently regressive. The income elasticity of demand of food for example is usually less than 1 (inelastic) (see Engel's law) and therefore as a household's income rises, even significantly, the tax collected remains almost the same. So as a proportion of available expenditure the tax burden falls far more heavily on households with lower incomes.

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

[Morshu9001]

Originally Posted by brad.c

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

I don't see what the point of giving them the rights of an individual is. Just don't call a company a person, and then eliminate business (since corporations are companies that are considered people) tax. I don't see why a company would be a person. It's not that I want them to have fewer rights; it just doesn't make sense.

[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.

[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.

[starflyer]

Originally Posted by skunk

It wouldn't be at all fair. Sales tax is regressive.http://en.wikipedia.org/wiki/Regressive_tax

Have some sort of tax credit for lower income families for their necessities.