The largest segment of the U.S. economy is consumers, not business. Business shouldn't really be first in line if you're actually trying to grow the economy in a significant way. That's one of the reasons the U.S. always has a low growth rate these days: the business sector focuses on profit maximization and removing money from circulation.
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Apple Reportedly Shifted Billions of Dollars to Small Island of Jersey Amid Tax Crackdown [Updated]
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The largest segment of the U.S. economy is consumers, not business. Business shouldn't really be first in line if you're actually trying to grow the economy in a significant way. That's one of the reasons the U.S. always has a low growth rate these days: the business sector focuses on profit maximization and removing money from circulation.
Lets be serious here. We all know any additional tax collections for the government will not directly offset debts. They will just spend more.
Ah yes so that’s why it’s sat in offshore bank accounts doing absolutely nothing
Two wrongs don't make a right. First and foremost these greedy conglomerates need to pay what is due. They don't mind benefitting from what society has to fund, they like it when the police turn up to investigate stolen phones do they not? They have a debt to society, let's not gloss over it.
Nothing will come of this. The politicians would never close the loopholes themselves use.
The so called "loopholes" Apple is exploiting is only really open to multi-national companies.
For example, here in Sweden, Apple has a datacenter, sell products through Apple Sweden and have people employed.
To enable Swedish companies to make money, government has made laws so that tax can be offset. If you have costs to make profit, that cost can be offset against your profit which means lower tax.
What Apple can is to legally do what is illegal if you only operate in one country: invoice yourself.
Apple Europe is based in Ireland. Every product sold in Sweden, Apple Sweden buys from Apple Europe in Ireland. By making sure that the prices of products (including IP) Apple Europe sell to Apple Sweden is high enough, any profit made in Sweden is offset by the high cost of buying said products from Apple Europe. If the products are priced high enough, Apple Sweden will start loosing money, which means you can offset that loss against other taxes you would have to pay.
That is sort of how taxation works in most countries. Since countries only have jurisdiction over their own taxes, it's impossible to stop multi-national companies to exploit this, unless governments would change tax law so that it would severely hurt businesses only operating in their own country.
Now Apple Europe is rich, but hey, Apple does not want to pay the low taxes in Ireland either, so they set up a company in a tax haven that owns all the IP and invoices Apple Europe for "licensing" the IP. Hence, no tax due anywhere except for the tax haven which, as the name imply, does not charge company tax, or a very low tax.
This option is really just open to multi-national companies and the filthy rich who can pay a shady, but perfectly legal company based in one of these tax havens to run a business which is no more than a PO Box.
The Paradise Leak has listed rich people besides huge companies.
Of course, this is actually doable even for the average Joe, but he/she seldom have the ability to work out all the details to set up a company, start your tax haven company and start billing yourself. And, it would be a real hassle every time you have to pay your rent.
The only reason Apple is lobbying for the tax holiday in the US is that they are starting to get worried that the tax havens are getting fewer and fewer. The low company taxes were put in place in hope that it would attract companies and actually make money for these countries which usually are extremely small and have no natural resources and a very small population that cannot spawn the next Apple.
Now as they see billions and billons of dollars being stashed with no benefit to the country, they are starting to rethink their tax laws. These dollars though are as real as vapor and could be gone within minutes, should the laws change.
Apple and a horde of other companies and rich people are doing their very best to get that tax holiday as they recon it's better to pay that 5% tax once and have the money secured than pay no taxes but risk having to pay a lot more, should tax havens go away. If they were confident that their money would be safe and non-taxed in these off-shore places, they couldn't care less about taxes in Europe or the US.
So, yes, Apple is paying all the taxes they legally owe, but only because they're not one company but hundreds acting as if they were independent although it's just fiction.
For example, here in Sweden, Apple has a datacenter, sell products through Apple Sweden and have people employed.
To enable Swedish companies to make money, government has made laws so that tax can be offset. If you have costs to make profit, that cost can be offset against your profit which means lower tax.
What Apple can is to legally do what is illegal if you only operate in one country: invoice yourself.
Apple Europe is based in Ireland. Every product sold in Sweden, Apple Sweden buys from Apple Europe in Ireland. By making sure that the prices of products (including IP) Apple Europe sell to Apple Sweden is high enough, any profit made in Sweden is offset by the high cost of buying said products from Apple Europe. If the products are priced high enough, Apple Sweden will start loosing money, which means you can offset that loss against other taxes you would have to pay.
That is sort of how taxation works in most countries. Since countries only have jurisdiction over their own taxes, it's impossible to stop multi-national companies to exploit this, unless governments would change tax law so that it would severely hurt businesses only operating in their own country.
Now Apple Europe is rich, but hey, Apple does not want to pay the low taxes in Ireland either, so they set up a company in a tax haven that owns all the IP and invoices Apple Europe for "licensing" the IP. Hence, no tax due anywhere except for the tax haven which, as the name imply, does not charge company tax, or a very low tax.
This option is really just open to multi-national companies and the filthy rich who can pay a shady, but perfectly legal company based in one of these tax havens to run a business which is no more than a PO Box.
The Paradise Leak has listed rich people besides huge companies.
Of course, this is actually doable even for the average Joe, but he/she seldom have the ability to work out all the details to set up a company, start your tax haven company and start billing yourself. And, it would be a real hassle every time you have to pay your rent.
The only reason Apple is lobbying for the tax holiday in the US is that they are starting to get worried that the tax havens are getting fewer and fewer. The low company taxes were put in place in hope that it would attract companies and actually make money for these countries which usually are extremely small and have no natural resources and a very small population that cannot spawn the next Apple.
Now as they see billions and billons of dollars being stashed with no benefit to the country, they are starting to rethink their tax laws. These dollars though are as real as vapor and could be gone within minutes, should the laws change.
Apple and a horde of other companies and rich people are doing their very best to get that tax holiday as they recon it's better to pay that 5% tax once and have the money secured than pay no taxes but risk having to pay a lot more, should tax havens go away. If they were confident that their money would be safe and non-taxed in these off-shore places, they couldn't care less about taxes in Europe or the US.
So, yes, Apple is paying all the taxes they legally owe, but only because they're not one company but hundreds acting as if they were independent although it's just fiction.
People aren't paying the taxes from the money Apple has made, they pay taxes from the money they made.
That's like saying Apple turned profit due to Government subsidies and exemptions left and right.
Not necessarily. The U.S. was running a surplus in the late '90s and both parties agreed at the time to use the money to pay down the debt. That changed when George W. Bush took office and they ended the surplus with Dick Cheney's famous quote "deficits don't matter".
I don' blame them one bit. I take advantage of every loophole and deduction that I can.
Perhaps if companies like Apple and others paid their fair share of taxes you might be able to fund a single payer health care system. What does Tim Cooke keep saying we pay all out taxes. everywhere.
Or ... one meaningless war to prop-up the Saudi or Kuwait government, even if we don't need their oil!
The lobbyists need the balance of power, as their paymasters are powerful.
It is better that the USA is in severe deficit and not easily wander into another war - remember what Cheney (and Bush) did with the "extra" cash available!
I don't know what rabbit hole you are talking about. All the information is out there. It is widely discussed in the public space and people are free to read up on it or listen to it. Maybe not on the Bible channel or on QVC, but whoever out there wants to educate themselves has the full possibility to do so. It has never been easier than in these days. There is no grand conspiracy at work to keep people away from the facts like in the Middle Ages, and if it is, it's not very successful. The sad truth: It doesn't need to be. I don't blame the messenger, I blame the people.
Unfortunately this is a bipartisan issue. Obama did nothing to help the situation and in fact, increased the deficit more than any other President by far.
That long ago surplus was crushed by a war and exploding mandatory entitlement spending.
You're confusing legal with ethical. Just because something is legal doesn't make it right. In Alabama, it's legal for a brother to marry his sister.
Most people would agree that is wrong...very wrong.
Well in GB the corporate tax rate is 20%, and they’d only have to pay it on any money they made in the UK, so I’d hardly call that punitive? In 2014, for example, they made just under £2billion here, so should have paid £400 million, leaving £1.6 billion to do as they please. Instead they looked through the rule book to see how they could squeeze their way out of paying it while still technically not breaking the law. How much tax did they end up paying? £12 million. That’s about a 0.6% tax rate. So what’s the money doing instead, in shareholders pockets to be spent on other things keeping the economy going? Being ploughed into research for the next big breakthrough? Nope, it’s sat in some offshore account doing absolutely nothing at all.
I should have to write this, but just in case you really don't know.
Do you know who pays for all the "social programs" in this country, including programs that are meant to help minority groups, people with disabilities, GLBT, etc?
Answer: TAX payers
All of what you have written is true.
One tiny correction though. The tax holiday has nothing to do with fewer tax havens (I wish it were true). It is something that Apple's shareholders want really badly since right now they can't get to that huge pile of money that is parked outside the US. In order for Apple to buy back shares to inflate the share price or to pay dividends, the money needs to be repatriated. Right now Apple is actually selling bonds for tens of billions just to buy back shares, something they wanted of course rather be doing with their own money.
But, if consumers spend that money primarily with multi-nationals vs SMBs, guess that economy the money doesn't come back into?
Umm, not having a single pager system has little to do with people paying their taxes. Here's the problem.... if you go to the hospital and have insurance, your stay costs $200k. If you don't the costs are $20k. Under ACA, that will be $250k please. Under the Republican 'plan' you'll get a low premium but will be paying out of pocket, as you won't be covered.
The reason there isn't single-payer is because too much money is being made by not having it. And... so long as politicians are being paid tons of money by insurance companies, big pharma, medical groups, etc. that is ever going to change?
This just in.... http://naplay.it/979/02-10-50
I don't know how grand it is, or if it's really a conspiracy. It isn't covered up too well. But, the average person seems quite content to buy into it all.
Thank heavens for the brave individuals who risk their own safety to reveal these secrets.
So true. I forgot that part! But I still think that they are a bit afraid of what will happen since the spotlight really has been put on these practices. It's starting to become embarrassing for every company and person who has been "caught" using these so called loopholes.
That's covered with vehicle registrations and gas taxes, all of which Apple is paying.
Paid for with property taxes.
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So these companies ended up using their own money for whatever they wanted? Crazy, huh?
