Bernie Sanders Wishes Apple Would Move Some Manufacturing to US and Pay 'Fair Share' of Taxes

[jnpy!$4g3cwk]

You are just attempting to obfuscate the taxation debate and are frankly a complete waste of time to converse with. A "sale", a "sale of an iPod", a "sale of an Apple Watch" is obvious to everyone. There is no tax trickery here.

What is the "value added" and where was it added? In California, where most of the engineering was done, or in China, where most of the manufacturing was done? Where do I book the value added of "intellectual property"? How much of each went into "sale of an iPod"?

 

[Eraserhead]

You are just attempting to obfuscate the taxation debate and are frankly a complete waste of time to converse with. A "sale", a "sale of an iPod", a "sale of an Apple Watch" is obvious to everyone. There is no tax trickery here.

OK so lets massively simplify the iPhone and assume the following - nothing is outsourced (again for simplicity):

iPhones sell in Argentina for $600.
They cost $50 to sell in Argentina.
The shipping to Argentina is done by a Greek ship and costs $10.
The iPhone costs $150 to physically make in China.
The software on the iPhone costs $50 and is done in India.
The hardware on the iPhone costs $25 to design and that is done in the UK.
The marketing for the iPhone costs $50 and is done from Chile.
The translation to Spanish is done in Spain and costs $10.
The business, based in California, costs $50 to run.
The total costs come to $395, leaving $205 of profit - how much tax should Apple pay in each country?

Now if we assume all the countries have a tax rate of 25% (for simplicity) how much tax do you think they should pay in each country?

I'd say $1.25 in Argentina, $0.25 in Greece, $3.75 in China, $0.25 in Spain, $2.50 in Chile, $14.41 in India, $14.42 in the UK and $14.42 in California. That's based on a standard 10% margin everywhere, except the marketing which has a 20% margin, and then I split the remaining profit equally between the hardware, software and the business.

EDIT: The other thing is that actually if Apple sold the iPhone in Argentina for $400, then I think they should still pay the standard 10% margin taxes in those areas and pay the whole loss in the "value add" parts of the business.

 

[smacrumon]

What is the "value added" and where was it added? In California, where most of the engineering was done, or in China, where most of the manufacturing was done? Where do I book the value added of "intellectual property"? How much of each went into "sale of an iPod"?

OK so lets massively simplify the iPhone and assume the following - nothing is outsourced (again for simplicity):

iPhones sell in Argentina for $600.
They cost $50 to sell in Argentina.
The shipping to Argentina is done by a Greek ship and costs $10.
The iPhone costs $150 to physically make in China.
The software on the iPhone costs $50 and is done in India.
The hardware on the iPhone costs $25 to design and that is done in the UK.
The marketing for the iPhone costs $50 and is done from Chile.
The translation to Spanish is done in Spain and costs $10.
The business, based in California, costs $50 to run.
The total costs come to $395, leaving $205 of profit - how much tax should Apple pay in each country?

Now if we assume all the countries have a tax rate of 25% (for simplicity) how much tax do you think they should pay in each country?

I'd say $1.25 in Argentina, $0.25 in Greece, $3.75 in China, $0.25 in Spain, $2.50 in Chile, $14.41 in India, $14.42 in the UK and $14.42 in California. That's based on a standard 10% margin everywhere, except the marketing which has a 20% margin, and then I split the remaining profit equally between the hardware, software and the business.

EDIT: The other thing is that actually if Apple sold the iPhone in Argentina for $400, then I think they should still pay the standard 10% margin taxes in those areas and pay the whole loss in the "value add" parts of the business.

Yep, I was right, you are just attempting to obfuscate the taxation debate, because the line of reasoning that you are suggesting means there is no answer to taxation ever. So let's just cut through that nonsense. Tax is paid on the total sale price of the product or service in the country that the sale was made. For example:

Finland’s corporate tax rate is 20%.
Apple sells an iPod 16GB for 239 Euros in Finland.
191.20 Euros goes to Apple.
47.80 Euros goes to the Finnish Tax Administration.​

The story ends there.​

Here are the corporate tax rates for countries around the world:
https://home.kpmg.com/xx/en/home/se...x-rates-online/corporate-tax-rates-table.html

For example, if Apple sells an iPod in Argentina, where the corporate tax rate is 35%, Apple must pay tax of 35% on all those sales in Argentina.

And, for example, if Apple sells an iPhone in Finland, where the corporate tax rate is 20%, Apple must pay tax of 20% on all those sales in Finland.

And, again, for example, if Apple sells an Apple Watch in the USA, where the corporate tax rate is 40%, Apple must pay tax of 40% on all those sales in the USA.

It's really simple for Apple to pay taxes properly and fully in each country as required, not make up its own rules to dodge tax.

Currently Apple reduces its tax liability using a spider web of transactions, inflating marketing costs in different regions, and attributing sales to other countries where the tax rate is less.

Apple uses a variety of offshore structures and arrangements to shift billions of dollars to other countries such as Ireland. For example, in the USA, the corporate tax rate is 40%, while Apple has negotiated a special corporate tax rate in Ireland of less than 2%:
http://www.businessinsider.com/how-apple-reduces-what-it-pays-in-taxes-2013-5
http://www.forbes.com/sites/leesheppard/2013/05/28/how-does-apple-avoid-taxes/
http://www.smh.com.au/business/the-...-a-zero-tax-bill-in-2016-20160127-gmeub5.html

Apple’s tax avoidance must end now.

Everyone knows the only reason why Apple employs it's workforce offshore in factories is to reduce it's costs and and increase it's revenue to insane levels. Apple is making more than $£€¥ 1 million in revenue, so Apple can afford to pay full tax in the country where the actual sale is made. Shareholders need to get used to this now. Apple paying more tax, it's coming. Regular citizens pay upwards or more than 30% tax on income around the world. Even Apple taxes its own software developers 30% of their sales! So Apple, why be hypocrites? With $£€¥ billions in profit each year, Apple is very much in a position to pay its proper fair share of tax in each country it makes the sale. So why doesn't Apple stop this profit shifting to reduce the tax it pays? It clearly has financial scope to pay proper amounts of tax. It's rather disgusting behaviour that Apple doesn't pay proper taxes. I support authorities and governments to address the laws and retrospectively go after companies like Apple for every $£€¥ they owe. Who do these companies think they are? They want all the protections that company structures allows, but Apple doesn't want to pay a since cent of tax.

 

[Eraserhead]

Yep, I was right, you are just attempting to obfuscate the taxation debate, because the line of reasoning that you are suggesting means there is no answer to taxation ever. So let's just cut through that nonsense. Tax is paid on the total sale price of the product or service in the country that the sale was made. For example:

Finland’s corporate tax rate is 20%.
Apple sells an iPod 16GB for 239 Euros in Finland.
191.20 Euros goes to Apple.
47.80 Euros goes to the Finnish Tax Administration.​

The story ends there.​

Here are the corporate tax rates for countries around the world:
https://home.kpmg.com/xx/en/home/se...x-rates-online/corporate-tax-rates-table.html

For example, if Apple sells an iPod in Argentina, where the corporate tax rate is 35%, Apple must pay tax of 35% on all those sales in Argentina.

And, for example, if Apple sells an iPhone in Finland, where the corporate tax rate is 20%, Apple must pay tax of 20% on all those sales in Finland.

And, again, for example, if Apple sells an Apple Watch in the USA, where the corporate tax rate is 40%, Apple must pay tax of 40% on all those sales in the USA.

It's really simple for Apple to pay taxes properly and fully in each country as required, not make up its own rules to dodge tax.

Currently Apple reduces its tax liability using a spider web of transactions, inflating marketing costs in different regions, and attributing sales to other countries where the tax rate is less.

Apple uses a variety of offshore structures and arrangements to shift billions of dollars to other countries such as Ireland. For example, in the USA, the corporate tax rate is 40%, while Apple has negotiated a special corporate tax rate in Ireland of less than 2%:
http://www.businessinsider.com/how-apple-reduces-what-it-pays-in-taxes-2013-5
http://www.forbes.com/sites/leesheppard/2013/05/28/how-does-apple-avoid-taxes/
http://www.smh.com.au/business/the-...-a-zero-tax-bill-in-2016-20160127-gmeub5.html

Apple’s tax avoidance must end now.

Everyone knows the only reason why Apple employs it's workforce offshore in factories is to reduce it's costs and and increase it's revenue to insane levels. Apple is making more than $£€¥ 1 million in revenue, so Apple can afford to pay full tax in the country where the actual sale is made. Shareholders need to get used to this now. Apple paying more tax, it's coming. Regular citizens pay upwards or more than 30% tax on income around the world. Even Apple taxes its own software developers 30% of their sales! So Apple, why be hypocrites? With $£€¥ billions in profit each year, Apple is very much in a position to pay its proper fair share of tax in each country it makes the sale. So why doesn't Apple stop this profit shifting to reduce the tax it pays? It clearly has financial scope to pay proper amounts of tax. It's rather disgusting behaviour that Apple doesn't pay proper taxes. I support authorities and governments to address the laws and retrospectively go after companies like Apple for every $£€¥ they owe. Who do these companies think they are? They want all the protections that company structures allows, but Apple doesn't want to pay a since cent of tax.

So you can't answer the question.

There's no tax avoidance going on in my analogy.

EDIT. Perhaps you are talking about VAT. Still that's value add so that isn't based on the whole purchase price.

 

[jnpy!$4g3cwk]

Yep, I was right, you are just attempting to obfuscate the taxation debate,

You clearly feel very passionate about the issue-- too bad that you don't understand or choose to ignore the subtleties. Because lots of people would like to see these taxation games cease, but, it doesn't actually help when people just start shouting.

 

[Eraserhead]

You clearly feel very passionate about the issue-- too bad that you don't understand or choose to ignore the subtleties. Because lots of people would like to see these taxation games cease, but, it doesn't actually help when people just start shouting.

The issue is that multinational companies are complicated. And that's how it is. Nothing to do with tax games.

 

[OLDCODGER]

Anyone who compares Sanders to Lenin, or brings up Marxism/Leninism in context of modern US political debate has absolutely no idea what they're talking about.

I say this as an objective fact. It's like talking about how much you hate brussel sprouts when everyone else is talking about making apple pie.

Put him in, give him two terms, then get back to me. Lenin's rabble-rousing revolution was incremental - which is why he was shot. Stalin (and Trotsky) wanted the whole hog now!

Most people see what they want to see (a few trees), rather than examine the forest. Socialism v Marxism is merely a matter of degree, with the desired end-result being Marxism. The US system makes it harder to achieve, but not for lack of trying.

 

[Eraserhead]

Put him in, give him two terms, then get back to me. Lenin's rabble-rousing revolution was incremental - which is why he was shot. Stalin (and Trotsky) wanted the whole hog now!

Most people see what they want to see (a few trees), rather than examine the forest. Socialism v Marxism is merely a matter of degree, with the desired end-result being Marxism. The US system makes it harder to achieve, but not for lack of trying.

And yet when America was at the height of its power it was a socialist country.

 

[OLDCODGER]

And yet when America was at the height of its power it was a socialist country.

First, it still is a socialist country.

Second, a little event called WWII/cold war happened to coincide with the burgeoning power of the US, courtesy of WWI.

This current election cycle is making it clear that the US heyday has come and gone (ran out of other people's money), and that deterioration is being largely hidden by distractions that do nothing to put the country back on track.

 

[stylinexpat]

So why don't you get the necessary education, work hard, and aspire to be the next CEO rather than spout the leftist hate that continues to divide America and create this false sense of entitlement?

I agree. That person is most likely a CEO because that person has special talent and knowledge (probably luck as well). In my opinion a CEO of a company deserves to be paid well just like any other business owner.

 

[Renzatic]

I agree. That person is most likely a CEO because that person has special talent and knowledge (probably luck as well). In my opinion a CEO of a company deserves to be paid well just like any other business owner.

There's being paid well for doing a difficult job, then there's practically being a pirate about it.

Call me a lefty crypto-communist progressive scumbag, but when your company is hemorrhaging money, and you're having to lay people off to keep afloat, I don't think the board should pick that time to opt themselves in for a pay raise. And golden parachutes just make me want to beat people. American CEOs are about the only people in the world who get rewarded for ****ing up.

"Yeah, you ran the company into the ground, and we're having to let you go. Needless to say, we think you have the business sense of a brain damaged otter. Here's your $3.5 million severance package."

 

[stylinexpat]

There's being paid well for doing a difficult job, then there's practically being a pirate about it.

Call me a lefty crypto-communist progressive scumbag, but when your company is hemorrhaging money, and you're having to lay people off to keep afloat, I don't think the board should pick that time to opt themselves in for a pay raise. And golden parachutes just make me want to beat people. American CEOs are about the only people in the world who get rewarded for ****ing up.

"Yeah, you ran the company into the ground, and we're having to let you go. Needless to say, we think you have the business sense of a brain damaged otter. Here's your $3.5 million severance package."

They (CEO's) are like employees. Very few employees would be willing to work without pay.

 

[Renzatic]

They (CEO's) are like employees. Very few employees would be willing to work without pay.

This doesn't really address what I've said above. I never said CEOs shouldn't be paid, or not paid considerably more than your average employees. They're the heads of large corporations, I don't expect them to be paid just $40k a year. I'd be expecting them to be paid in the millions.

But on that same note, there is such a thing as paying a CEO too much. When your average CEO makes round 200x-2000x more than the median employee average of a large corporation, we might be dumping too much money on them.

 

[Eraserhead]

This doesn't really address what I've said above. I never said CEOs shouldn't be paid, or not paid considerably more than your average employees. They're the heads of large corporations, I don't expect them to be paid just $40k a year. I'd be expecting them to be paid in the millions.

But on that same note, there is such a thing as paying a CEO too much. When your average CEO makes round 200x-2000x more than the median employee average of a large corporation, we might be dumping too much money on them.

Paying the CEO of BP £1 million a year should be sufficient. Besides at that level you do if for the challenge not the money, if you do you're a fool.

 

[colonelbutt]

You guys who call America a socialist country have no idea what socialism is

Put Bernie in for a term with a demoncrat congress and see how soon you are running to the IMF begging for money

 

[colonelbutt]

Paying the CEO of BP £1 million a year should be sufficient. Besides at that level you do if for the challenge not the money, if you do you're a fool.

A company can pay its employees anything it wants

If it does well it does well, if it fails it fails

Interference in things like pay is not socialism it's communism and it destroys the country

 

[Eraserhead]

A company can pay its employees anything it wants

If it does well it does well, if it fails it fails

Interference in things like pay is not socialism it's communism and it destroys the country

What about if the shareholders do it?

 

[colonelbutt]

What about if the shareholders do it?

If the shareholders do it it's fine, as they are the owners

They do need to be careful in a competitive market and take advice

 

[69650]

Totally agree with ya.

Firefighters should get paid on the spot for job done or better yet not get paid if my house got burnt down and they did not prevent the fire. Also, if the police do not recover my stolen **** I should never have to pay them.

I like where this is going!

Please make it clear when you're being sarcastic. There are some people on this forum who actually have views like this.

 

[Mr. McMac]

Sanders will destroy the USA. He wants to give everything away for free. Where do you think the money comes from? US TAX PAYERS!!!! I'll never vote for this old hippie socialist bastard!!

 

[ActionableMango]

So let's just cut through that nonsense. Tax is paid on the total sale price of the product or service in the country that the sale was made. For example:

Finland’s corporate tax rate is 20%.
Apple sells an iPod 16GB for 239 Euros in Finland.
191.20 Euros goes to Apple.
47.80 Euros goes to the Finnish Tax Administration.​

The story ends there.​

No, the story doesn't end there. You are oversimplifying the matter by bizarrely applying a corporate tax rate to the total sales price of an item, like a sales tax, instead of the profit/income. That would break everything.

Let's say you were Apple and you made an item for $71.50 and sold it for $100. This is a 40% margin (Apple's average profit margin, and very high by industry standards). Your profit would be $28.50. In your example, the tax you'd owe on the $28.50 income would be a whopping $20, basically the lion's share of the profit. That would be an income tax of 70%!

Now let's say you were Dell or whatever and made an item for $98 and sold it for $100. That's a thin margin, but many products and services are known to have thin margins and make up for it with volume. Your profit would be $2. In your example, the tax you'd owe on the $2 income would be $20. That would be an income tax rate of 1000%!

In the second example, if you sold a million of these things in a year, you'd have $2 million dollars at the end of the year and then the tax man would ask for $20 million. Do you see a problem with that? This is why we tax businesses by the profit/income/value added and not the total price.

You and I, and probably most people, might agree that it is suspicious that a company would assign costs around the world that just happen to add up to the least tax burden, instead of assigning the costs in a more logical manner...and that the situation needs to be fixed. Even as a shareholder I recognize that this is wrong. However, your solution is definitely not the right answer.

 

[smacrumon]

No, the story doesn't end there.

Wow, that's a blast from the past, the thread started 8 weeks ago!

 

[npmacuser5]

Bernie is insane. Does he really think that all major corporations and rich people will move their money to US banks so that they can pay ridiculous taxes that he is proposing? He and his supporters are insane.

"Hey guys, move everything (cash, production) to US, so that I can tax you 60%. You'll give away all of your money, but at least you can tell people that you manufacture in US"

Hard pressed to find any corporation that paid more then 15% actual taxes in the US. If you find one that has paid the highest 39.1%, may want to play the lottery, your lucky day. Apple last year paid 8% actual tax rate. Corporations are really good whiners, just need some sharp cheddar cheese and the whine paired nicely.

 

[ActionableMango]

Hard pressed to find any corporation that paid more then 15% actual taxes in the US.

Not that hard at all. I just looked up Walmart, one of the largest and most famous businesses in the USA.
http://csimarket.com/stocks/singleProfitabilityRatios.php?code=WMT&itx

(Effective tax rates of over 30%)

Now, I'm not going to start defending any of Walmart's practices because frankly they are generally indefensible. I'm just saying that it took my first guess and a 5 second search in order to find a corporation paying far more than 15%.

 

[npmacuser5]

Not that hard at all. I just looked up Walmart, one of the largest and most famous businesses in the USA.
http://csimarket.com/stocks/singleProfitabilityRatios.php?code=WMT&itx

(Effective tax rates of over 30%)

Now, I'm not going to start defending any of Walmart's practices because frankly they are generally indefensible. I'm just saying that it took my first guess and a 5 second search in order to find a corporation paying far more than 15%.

Huge difference from effective and actual. Actual is the cash they paid. Apple last year had an effective tax rate of around 25%, actual as I noted 8 percent. Whiners...

Forgot the paste:
For example: Our average effective tax rate is 27.1% compared with 27.7% for the other 30 OECD countries, according to CRS. Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010, according to the Government Accountability Office.