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Apple Could Owe More Than $8 Billion in European Tax Probe
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I'm not sure I buy that logic. Remember trickle down? If paying higher taxes in the EU will cause companies to leave, that yields one of two results: 1. Companies leave for greener pastures or 2. They continue to pay low taxes. So by staying, it seems they aren't paying their fair share in taxes anyway. And I don't believe Apple pays all that in taxes. What about this?
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You are absolutely correct. That logic is called profits over people.
I'm not sure I buy that logic. Remember trickle down? If paying higher taxes in the EU will cause companies to leave, that yields one of two results: 1. Companies leave for greener pastures or 2. They continue to pay low taxes. So by staying, it seems they aren't paying their fair share in taxes anyway. And I don't believe Apple pays all that in taxes. What about this?
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You are absolutely correct. That logic is called profits over people.
Nobody said Apple is trying to break the law. They're just doing their best to hide the fact that they're being greedy asses.
Who says those billions are benefitting society? The governments are so wasteful and corrupt that very few of those dollars are actually benefitting the people. Why do you think taxes keep going up yet the services keep getting worse?
At least the increased profits at multi-billion dollar companies result in more jobs and creates wealth for millions of shareholders, leading to higher consumption and ultimately more tax dollars for governments....And those tax dollars should be more than enough to provide for its citizens if it weren't for the massive waste, bureaucracy and corruption.
As usual, the governments are doing what they do best; spinning public opinion, pointing the finger at rich corporations and shifting the blame rather than taking accountability for their own ineptitude.
Instead of falling for their sleight of hand, we should demand that our govts start working for its citizens rather than lobbyists and their respective parties.
In exchange for hundreds of thousands of quality jobs and BILLIONS in tax revenue.
Just watch. If this goes down their will be a mass exodus of corporations and the EU will suffer. There are a ton of countries that are willing to give tax breaks to corporations for jobs and economic boost.
Go ask any small city that had corporations move out. It is total devestation. That is why Ireland is fighting hard against this. Ireland could lose BILLIONS and totally wreck their economy.
And where does the additional tax revenue go to? Will it make your tax bill smaller? HELL NO! It will go to FREELOADERS who are too lazy to work and GOVERNMENT WASTE and CORRUPTION PAYOUTS. At least Apple gives its profits back to the people.
It's called fiduciary responsibility. If your banker told you "Hey, you've got about 20% less in your account than you think - I took a look at government needs and made a donation from your account", you'd be calling a lawyer. If you have an investment account and the account manager did the same, you'd be really angry. If you invested your money in Apple, why wouldn't you have the same reaction?
Now, as I said, it's not the only responsibility. I strongly approve of Apple's Green initiatives, it's progress towards diversity in the workplace, it's other social responsibility actions. But "pay a WHOLE lot more in taxes than you have to just because it'll make Zwhaler thinks we should" - that's no more Apple's responsibility than it's yours to forego the deductions you're entitled to or timing things for tax benefit.
Who is claiming it was 1.8% for 2015? My links were to highlight the fact that they stopped reporting foreign taxes paid after negative publicity concerning the very low rate.
Can you please run those numbers by me again? I don't believe it is mathematically impossible. Total provision was also 24% when they were paying 2% on foreign profits in 2012.
Apple said that in the USA they pay 40% federal+state tax.
45% of the profits were USA profits.
$100 billion profit x 45% = $45 billion in USA profit
$45 billion x 40% = $18 billion in USA taxes
$100 billion profit x 55% = $55 billion in foreign profit
$55 billion x 2% = $1.1 billion in foreign taxes
Total taxes = $19.1 billion
Tax rate = 19.1%
Actual tax rate = 24%
In order for the company wide tax rate to be 24% Apple would have had to pay $6 billion in foreign taxes.
That gives a foreign tax rate of 11%
I actually study european law. If the deal Apple has with Ireland is found to be illegal (because Ireland proposed something going against european laws), then Apple AND Ireland both will have to pay.
The problem here isn't that Apple is in Ireland, it's that they're paying only 2% (if memory serves) instead of the 12.5% required by law.
Ireland pretty much screwed the rest of the EU if they did so, and Apple having generated profit from this (illegal) deal, would have to pay just like Ireland would have.
Just because a country struck a deal with someone doesn't mean this something is legal. in fact you said so yourself : the government is often corrupt. Someone might just have accepted a big bribe from Apple to get that accepted despite the fact it's not valid, or Ireland plainly decided to offer a VERY nice deal tgat could be considered illegal because way too profitable and screwing every other company.
The EU's law system get the priority over any country laws. Mostly because it needs a way to have countries behave and follow the rule everyone edicted.
In this case, if the deal is effectively illegal, Ireland pretty much screwed every company without a deal in addition to being anti competitve towards other countries that could have offered Apple a fair deal, or any country more interesting from other point of view (like the installed user base, etc)
Are you going to pay for everyone's social programs, roads and government jobs? That's why everyone needs to pay tax. You want to do business in specific countries you have to play by their rules or don't sell your product there.
The problem here is not Apple. It is government, they spend more than they have and need to get money from someplace, well anyplace. Today it is Apple, tomorrow it will be you. In several countries around the world the government has already just taken funds from private bank accounts.
Except this deal was struck 35 years ago. And nobody cared, nobody said "wait! you can't do that". 35 years of the deal being in place without legal challenge should give the parties involved that it was just fine legally. Until governments started scrambling for money and said "Apple has money, we want it". And even now, it's a matter of judgement of "is this legitimate".
Granted, the final arbiter is the EU, and it's great for the EU to say "You can't do that anymore". More tax money comes into the governments, everyone's happy except for Apple shareholders. But to say "we're going to impose our judgement call in this retroactively and fine you for not having forseen what our judgement call would be" is not right.
I'm not sure I buy that logic. Remember trickle down? If paying higher taxes in the EU will cause companies to leave, that yields one of two results: 1. Companies leave for greener pastures or 2. They continue to pay low taxes. So by staying, it seems they aren't paying their fair share in taxes anyway. And I don't believe Apple pays all that in taxes. What about this?
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You are absolutely correct. That logic is called profits over people.
That table is based on the 35% USA federal tax rate.
Most foreign countries have a much lower tax rate.
Even more nutty is someone who makes generalizations.
I understand what you are saying, however I feel it's getting a little off topic. The fact is that Apple (and many others) intentionally utilized tax loopholes to avoid paying taxes that it rightfully owes. You can retort and claim that it doesn't owe them because its "legal", but realistically it's just cheating. By pretending their primary European base is an address in Ireland or the Cayman Islands with 2-3 employees, they cheated to avoid taxes. The double irish is phased out for a reason... because it was cheating and they owe the money! Obviously, this doesn't make the shareholders happy because their primary responsibility is profits. Hence this discussion... capitalists grasping for justifications vs people who see the tax maneuver for what it is.
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Conservatives supporting less government and less taxes is not a generalization.
The assumption, and our residential tax law is based on the assumption, is that any money earned anywhere in the world by Americans or American companies is subject to US Taxation. This is NOT the assumption of the rest of the western world - the English tax system, to pick just one, assumes that any money earned outside of the UK is none of their business. By the residential tax law assumptions, yes, money earned outside the US that doesn't have US taxes collected is inappropriate and immoral and you get tables like that.
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You're right, I'm going to say that they aren't owed, any more than you owe money on taxes you didn't pay because you made a donation or put money in an IRA in December. All of them are blatant actions to reduce the taxes owed.
I don't think that the system they use in Ireland should exist, and will be happy if the EU rules it illegal so Apple can't use it. It's an unreasonable tax system that shouldn't exist. But it does exist, it existed for 35 years and for all but the last few it existed without controversy, and Apple (and Google and Microsoft and even Samsung as I spit on their name) would be completely reasonable in taking advantage of it. And changing it ex post facto, fining for using it all those years without challenge or ruling they couldn't, would be wrong.
Getting zero tax revenue, and getting less tax revenue is totally different. There is hardly anyone from any political mindset that would think zero tax revenue is a good thing.
It's because Apple isn't breaking the law, they're using a legal system to minimize tax burden. Any multinational corporation does the same to remain competitive. Why would you pay a tax if you don't have to?
If the Irish tax policy violates EU law, then Ireland is at fault, not Apple. It's wrong to shake down a person or a corporation just because the government wants more of their money.
Hundreds of Thousands? LOL I think you need to scale that back quite a bit. Apple doesn't have that many employees.
If you study EU law, you may want to brush up on anti-corruption laws and specifically bribery. I highly doubt Apple gave any bribes unless they wanted to take the chance of being banned from doing business in the EU and the US. The EU and US laws are very tough on this. I'd be shocked if Apple or any repeatable company would risk such consequences. Makes no logical sense.
Precisely.
This entire fiasco is a cash grab, and Apple is the golden goose. They have the money so now it's important for the EU to scrutinize these policies when it is those policies that helped Apple build their business.
That's not to say I am anti-tax, far from it. I just think Apple is the wrong golden goose to go after. Consumer products and income from those products can dry up so quickly that the EU needs to be pragmatic about their tax structure. It's more feasible to go after resource and energy companies because they use consumable lands and environments and do little to return those costs. BP, Shell, Exxon -- these are the companies that lobbied for these loopholes, bought and paid for governments (i.e. Middle East wars), and then refuse to support the burden they've imposed.
The EU and politicians won't go after these companies because they are bought and paid for by them. Instead, they go after companies like Apple which have very little lobbying power or interest.
No... but Apple supports the existence of 100's of thousands of jobs directly and indirectly.