How Apple Minimizes its Corporate Tax Burden

[KPOM]

Apple Fanboys would defend the company on anything

It isn't just Apple. Most corporations in the US try to minimize their tax bills, the same way that most people take advantage of the deductions that are available to them.

We have a high corporate tax rate in the US (the highest in the world when you factor in state taxation). It would be downright irresponsible for a company like Apple not to try to minimize its tax bill through whatever legal means are available to it.

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Where in the act does it say you have a responsibility to exploit loopholes and evade taxes? I'm not being confrontational. I haven't had a chance to read the SOX and since you mention it, I presume you know what you are talking about.

There's a difference between tax evasion and tax avoidance. Also, note that most tax "avoidance" is simply delaying tax payments. Eventually, that income will be reported and be subject to tax. But why pay tax in 2012 if you can pay it later legally?

 

[faroZ06]

That is a truly lousy argument. If every major company is evading taxes through loopholes none are paying their faire share. We aren't asking how much they pay compared to others, we are asking if they are paying what they should. Are they or are they not exploiting loopholes, evading taxes?

By the standards of every other company, Apple is paying their fair share. They are paying as much as the other companies who are also using the 100% legal loophole.

Close the loophole for everyone, not just Apple!

 

[FloatingBones]

Companies are not humans, they can't be immoral.

Then why did you say, That's what makes it immoral for them to pay taxes to Ireland while designing their products in USA.

Who did you imply is being immoral?

Their management, on the other hand, are immoral.

Nonsense.

I've asked repeatedly: do you know anything at all about SOX? Do you have the slightest idea what sort of requirements it places on a company? Do you realize that it may well be illegal for Apple -- any company -- to leave huge chunks of profits on the table?

We have many obligations, the one before SOX is clearly very low in the priority list that includes your country, your elders, your children etc.

No. Corporate officers are actually personally on the hook for a failure to comply with SOX.

And yes the congress (especially the republican part of it) and the lobbyists are the first to blame for this nonsense.

Then please stop trying to blame some individual company that's operating their business in a legal fashion. Only the NYT has the right to demonize one individual company.

Your "rich people should pay more taxes" reasoning was deconstructed in this message. Still waiting for you to explain the gaps in your reasoning...

 

[JohnDoe98]

Actually, most medical problems are due to smoking or obesity. People can either stay healthier or actually keep some money in case of emergencies instead of relying on taxpayers every time they have some problem. You know, people go to the ER to get dental checkups.

In short, they are abusing the safety net that is meant to provide support to the rare problem that would otherwise ruin somebody's life.

I see, the sick are responsible for being sick. Thanks. Great to know. Also, do you have any evidence for your preposterous claim that most medical problems are due to smoking and obesity? Your post here is very offensive. You typically show you are well spoken and intelligent, but the negligence expressed in this post is troublesome.

 

[faroZ06]

I don't blame Apple any more than any other company, but still want to see this changed across the board. If it takes Apple's visibility to call attention to corporations getting a free ride in the resources that allow them to make their money, then so be it.

Totally. I don't want Apple, Google, or Microsoft to stop avoiding taxes. I want Apple, Google, AND Microsoft to stop avoiding taxes (as well as everyone else).

Oh, and lower the taxes. They are ridiculous.

 

[bdavis89]

Tax evasion is illegal, tax avoidance is legal.

SOX was created to protect investors and create stringent regulations on what needed to be disclosed to investors. This was, and still is, a huge thorn in the sides of corporations.

 

[JohnDoe98]

Oh, that makes sense (the fragment).

But then who pays the extra money for the tax increase? Someone has to. The companies are as efficient as possible.

No one pays for it. That's the point. All that happens is there is less profit at the end of the sale.

 

[lilo777]

Yes. Of course. Evidence: law, regulations, tax forms, results that are fully LEGAL

All loopholes are fully legal. That's a hole in the law. Some provisions are often added to accommodate certain scenarios. For example, the goal might be to help indigenous people in rural areas but then smart ass (Apple) hires two indigenous workers somewhere and claims tax deduction on all $100 billion of their profits. That's a loophole and Apple is an ass that tries to squeeze in it.

 

[JohnDoe98]

A flat tax would end all this arguing so fast. Every company or every individual pays one simple rate, no matter who you are, how much you make, how big your business is, or what you produce. This would be doubly great for businesses, especially small ones because they'll be able to accurately predict how much they'll have to pay pretty far into the future and be able to budget properly and not be afraid of hiring. The market loves certainty.

Agreed, but will it be enough to sustain current infrastructure? Will all the government's bills be paid? If not, you are going to start talking about government cuts next. Now the question is, why do you think will get the short end of that stick? The rich?

 

[isdmd10]

By the standards of every other company, Apple is paying their fair share. They are paying as much as the other companies who are also using the 100% legal loophole.

Close the loophole for everyone, not just Apple!

Normally I would ask "why?" because I know that taxes don't go anywhere but where a bunch of idiot politicians choose, and it usually ends up in a black hole of a government office, and giving them more of it just gives them more power to do just that...

...but I'll skip that and just ask: How do you propose we do that?

 

[KPOM]

Let's put things into perspective. We have $15 TRILLION in debt. Our annual deficit is over $1 trillion. Even if we took all of Apple's cash, that would fund our shortfall for a month. Mind you, Apple is the most valuable company in the world right now.

IOW, there just isn't enough money to take from "the rich" to pay our way out of the mess that politicians have gotten us into over the past 30 years.

 

[lilo777]

Then why did you say, That's what makes it immoral for them to pay taxes to Ireland while designing their products in USA.

Who did you imply is being immoral?

Because Apple management are immoral. Is it that hard to understand? And what about SOX? Since Apple is paying the lowest taxes among the peer companies, it looks like you are implying that the management of all those companies is violating SOX (and thus must be jailed, right?).

 

[FloatingBones]

Where in the act does it say you have a responsibility to exploit loopholes and evade taxes? I'm not being confrontational.

Of course you're being confrontational: you're using pejoratives.

I haven't had a chance to read the SOX and since you mention it, I presume you know what you are talking about.

Companies have a general obligation to deliver value to the stockholders. Also, the machinations of SOX are rather horrendous for large companies. It is a huge burden, and individual officers of the company are personally on the hook if the company is not compliant with SOX. And it didn't do jack to avoid the problems at Lehman Brothers.

Why is nobody outraged at that? Did the NYT have an article about the billions of dollars that companies spend for SOX compliance -- and it did absolutely nothing to protect us from the 2008 bubble? I don't remember any.

I would like to see congress forced to have SOX compliance.

 

[JohnDoe98]

How did this country ever get started? We didn't have the income tax or let alone many other taxes until early in the 20th century. There was plenty of advancement in the lower classes without government assistance.

Was there even electricity back then? The point is that world and the world we live in are very different.

 

[Dmunjal]

Yep. The problem is apparent in the US and in France and is caused by there being TOO MUCH money put in to help the poorer. It makes some of them lazy.

Also, I really hate the idea of an English major. People should be going to college to learn about things that can help them in a REAL job other than an English teacher. Math, science, computer science, business, public speaking, and economy are way more important.

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No, there was not. Read about factory life in the 1800s. None of the rich were self-made people who worked from the bottom.

So all of the advancement started with the income tax in 1913? What about the Industrial Revolution that lifted millions out of poverty and improved the quality of life for everyone? The current welfare system only began about 40-50 years ago. About the time we started running up enormous debt. And the lower class has not benefited much for it.

 

[faroZ06]

I see, the sick are responsible for being sick. Thanks. Great to know. Also, do you have any evidence for your preposterous claim that most medical problems are due to smoking and obesity? Your post here is very offensive. You typically show you are will spoken and intelligent, but the negligence expressed in this post is troublesome.

Google time. I'd provide a lot of sites, but that would take forever. Google it yourself.

http://www.livestrong.com/article/36536-top-health-problems-america/

All of these are directly related to smoking or obesity. The main problem of a huge healthcare safety net is that it gives little reason to be careful with your health and emergency money. People, don't smoke, and don't eat too much fast food! If people ate the amount of fast food that they should (whenever they have no other choice), there wouldn't be so many huge fast food businesses.

 

[lilo777]

Let's put things into perspective. We have $15 TRILLION in debt. Our annual deficit is over $1 trillion. Even if we took all of Apple's cash, that would fund our shortfall for a month. Mind you, Apple is the most valuable company in the world right now.

IOW, there just isn't enough money to take from "the rich" to pay our way out of the mess that politicians have gotten us into over the past 30 years.

And now, think about my personal taxes. They definitely will not help USA in the least. Why should I bother paying them then?

 

[isdmd10]

Agreed, but will it be enough to sustain current infrastructure? Will all the government's bills be paid? If not, you are going to start talking about government cuts next. Now the question is, why do you think will get the short end of that stick? The rich?

Sure it would, because companies like GE or Apple will no longer be paying peanuts. Instead of being charged 30% or whatever the rate is and then weaving through loopholes to get it down to 1%, just charge an honest 10% and expect payment in full.

 

[JohnDoe98]

It's not a "loophole" if it is a provision written into law or regulation by the relevant authorities.

Those characterizing a lawful provision as a loophole are necessarily whiners or mis-characterizers (liars).

Yes I know. You are repeating yourself. I'm telling you if you read the New York Times articles, and if you read the initial posting by MacRumors, they are not saying Apple used provisions to lower taxes. They are claiming loopholes were exploited and taxes were evaded, though legally. If those articles are wrong, perhaps you should write to the editors and ask for them to issue corrections.

 

[lilo777]

Google time. I'd provide a lot of sites, but that would take forever. Google it yourself.

http://www.livestrong.com/article/36536-top-health-problems-america/

All of these are directly related to smoking or obesity. The main problem of a huge healthcare safety net is that it gives little reason to be careful with your health and emergency money. People, don't smoke, and don't eat too much fast food! If people ate the amount of fast food that they should (whenever they have no other choice), there wouldn't be so many huge fast food businesses.

But did you know that Europeans who smoke way more than Americans (twice higher rate) have much lower healthcare cost? 2 to 3 times lower prorated to their GDP. Maybe because they do not have 2000 health management companies with their lobbyists who make sure that the system stays highly inefficient but very profitable (for some)

 

[JohnDoe98]

There's a difference between tax evasion and tax avoidance. Also, note that most tax "avoidance" is simply delaying tax payments. Eventually, that income will be reported and be subject to tax. But why pay tax in 2012 if you can pay it later legally?

Well put.

 

[FloatingBones]

Because Apple management are immoral.

That is the conjecture you keep repeating in the discussion. You have yet to provide reasoning and facts to back up that conjecture.

Is it that hard to understand?

I understand that you have repeatedly made the conjecture. Do you understand that you have failed to present any convincing arguments?

And what about SOX? Since Apple is paying the lowest taxes among the peer companies, it looks like you are implying that the management of all those companies is violating SOX (and thus must be jailed, right?).

Whoa! Come back to this universe! Where did I ever say in this discussion that anyone must be jailed?

Do you have an apples-to-apples comparison where you think some other company is paying too much taxes? Please spell out the exact details why you think that's the case.

Still waiting for your thoughtful and reasoned response to this message...

 

[Rocketman]

One simple question

Let me ask this entire thread one simple question.

Given that Apple clearly is advantaged by offshore corporations, income and operations, why in he-double-toothpicks would they even consider expanding in Austin, TX and Cupertino, CA, and by expanding I mean massive new expensive employees and big new fixed locations guaranteeing those employee expenses decades into the future?

That doesn't feel like evasion to me in any way, shape, or form.

The word that comes to mind is . . . . patriotic.

Rocketman

 

[FloatingBones]

I see, the sick are responsible for being sick. Thanks. Great to know. Also, do you have any evidence for your preposterous claim that most medical problems are due to smoking and obesity? Your post here is very offensive. You typically show you are well spoken and intelligent, but the negligence expressed in this post is troublesome.

Obesity, smoking, and drinking.

You could start by reading this paper.

 

[JohnDoe98]

All loopholes are fully legal. That's a hole in the law. Some provisions are often added to accommodate certain scenarios. For example, the goal might be to help indigenous people in rural areas but then smart ass (Apple) hires two indigenous workers somewhere and claims tax deduction on all $100 billion of their profits. That's a loophole and Apple is an ass that tries to squeeze in it.

Right big difference between tax subsidies, I don't recall the technical term right now, and loopholes.