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How Apple Minimizes its Corporate Tax Burden
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Although flat tax schemes do have merit compared to our current tax morass, the FairTax (HR25/S13) is a much better researched alternative.
The FairTax is a national sales tax that treats every person equally and allows American businesses to thrive, while generating the same tax revenue as the current three-million-word-plus word tax code. Under the FairTax, every person living in the United States pays a 23% national sales tax on purchases of new goods and services. This rate is equal to the lowest current income tax bracket (15%) combined with employee payroll taxes (7.65%), both of which will be eliminated. For the first time in recent history, American workers will get to keep every dime they earn. By eliminating federal income taxes and payroll taxes, your salary or hourly wage is exactly what you'll deposit in the bank.
The FairTax helps U.S. businesses in three vital ways.
1. Currently, every tax a corporation pays is rolled into the price of a product or service, whether it's income tax, value-added taxes, or simply compliance costs. Now, consumers will see a product's actual price with no hidden tax components. The FairTax would also prevent large corporations from avoiding paying taxes.
2. Eliminating payroll taxes will significantly lower the cost of labor, therefore enabling businesses to hire more workers. The U.S. will be more appealing to businesses looking to relocate. Learn more about the elimination of the payroll tax.
3. U.S. exports are expensive, and foreign imports are cheap. The FairTax levels the playing field. Under the FairTax, imported goods and domestically produced goods incur the same U.S. tax. With the present system, U.S. companies and workers must pay income tax and payroll taxes, but foreign goods enter the U.S. entirely free of any tax, other than whatever modest customs duties are levied. The FairTax removes all taxes on exports, restoring the international competitiveness of American manufacturers in the global marketplace.
The FairTax will cause Apple's offshore capital to flow back into the US and restore Apple-related manufacturing jobs in the US. Take the time to read the information at the link at the beginning of this post.
How about just cutting back the government to what they are constitutionally allowed to do.
No I'm using the lead and terms given by the NY Times and MucRumors articles. They may be pejorative, but then your issue is with them. Contact their editors and inform them they have misled the public using factual mistakes.
Delivering value does not mean exploiting loopholes or evading taxes as our sources claim many major companies, Apple prime amount them, engage in. If it does, please correct me by showing me where in the Act it says this.
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.
Those might be good criticisms, but I fear them may be off topic.
My point is that it's a false claim that we are in such debt because "the rich" aren't paying some ill-defined "fair share." Apple pays a lot in taxes, both directly and indirectly. They are within their rights to take all legal measures available to them to minimize their tax bill.
How do you not comprehend that the tax rates are at there lowest in 50 years. So you want infrastructure and technology of the present day but think that its waranted to be taxed where we were 50 yrs ago and when we come up short its because theres too much tax not because we fell short on the required revenue. Awesome arguement. Ask Greece how under taxing and austerity are working out for them, if they try hard enough they can leave the EU and start there own less than worthless currency and enjoy becoming a second if not third world nation, but hey atleast they'll have super low taxes.
No one doubts that smoking and obesity cause major medical problems. The question is whether or not "most medical problems are caused by smoking and obesity" alone, and even more importantly, and as I was responding to, whether the people who have got entangled in the web of smoking and obesity are ultimately responsible. Whether they can magically will this problem away.
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Commerce clause!
That means they can do pretty much anything... Every aspect of your life is governed by commerce.
That's completely backwards. What is asinine is to create new tax legislation that has fundamental problems in its design. A massive rube-goldberg tax code is the source of the problem. Demonizing companies that fail to meet your dogmatic standard is a FAIL.
Since you've clearly spent many years contemplating tax law, please tell us what you think about the Fair Tax.
It's pretty simple. Look at your infrastructure and services. Are they working well? Yes or no? I think most would agree they are in a terrible state and only getting worse.
Next question, who isn't paying enough? There are only two options. Either (A) the rich aren't paying enough, or (B) the lower wages aren't paying enough.
Can the poor and low waged pay more, given the times? Again, I think the answer more often than not is no. So we rule out (B). Well then we have by means of a proof by elimination the conclusion (A) needs to pay more since they aren't paying their fair-share.
Now you can eliminate the problem by cutting out a bunch of services and infrastructure if you want. But then our argument isn't about who is or isn't paying a fair share, but whether or not we are collectively paying for too much. Is that what you want to debate? We need to cut social security, medicaid, etc?
The question of causality is up in the air. On the other hand, the question of how much medication consumed by populations -- and other measures -- are well known.
There are a bunch of numbers in the paper I cited. Did you bother to open it?
You nuts? All that would happen is more money would be stockpiled. Apple can't even manage to create more jobs despite their 100 Billion in cash. They are not going to build new manufacturing plants. They have been very clear about this. And the current plans they contract can only produce so much product. In fact, they can't produce fast enough. Apple is waiting for those manufacturers to expand to sell more. Nice myth tho.
It's true that that would create the most jobs and make their products the cheapest and most available to the most consumers, but they do have to pay something back for public services - federal, state, or local.
Although that makes me believe that roads and schools built and run by Apple would be very cool and a lot more efficient than the public alternative. A court system run by Apple...not so much...
Yes but I was engaged in a debate. Now that it died down I'll have time to read your article. Thanks for it.
I don't mind if we have a lower corporate tax rate. But at the same time, we should eliminate tax loopholes that allow companies to send their money overseas just to avoid paying taxes. Its ridiculous that a company can claim they're based overseas at some tax shelter and still enjoy the benefits of being a US business. If you're a US company, you pay taxes at the US rate. It should be that simple.
Kudos to Apple for surviving and prospering despite government oppression
Collectivist philosophies (communism, fascism, socialism of every variety) have dominated this earth for well over a century. The result?
1. Massive theft of individual and group wealth by governments through heavy taxation and by banking institutions (the Fed) charging governments "interest" on fiat money that they, the private banks, have no right to issue in the first place.
2. Huge world wars and ongoing smaller wars to feed an insatiable military-industrial complex.
3. Mass displacement of employment opportunities as companies, in understandable efforts to SURVIVE (oh my, how DARE they??), shift their operations from countries with completely insane taxation and regulation (like the USA) to other countries that are not (yet) so nutty.
We live in an Orwellian world now (if you haven't read "1984", do it now - I read it in high school but in many areas since then it has been banned from schools... wonder why?)
Hypertaxation and regulation of individuals and groups, spying on the citizenry and making perpetual war are all part of the Orwellian state's standard operating basis.
Do YOU want to live as a slave? I sure don't. Maybe you don't mind, but you sure as heck do not have any right to take me down the tubes with you. You're not going to get ANY help from the puppets on the left and right. There's only one guy in Congress who knows the score and is trying sincerely to turn the tide: Ron Paul.
Apple, in my book, deserves every single tax break it can get, and I thank them for giving others the ideas on how to save taxes as well. Should "the workers" also be entitled to similar breaks? Absolutely!! Rather than complaining about how companies "get out of paying taxes" we should applaud them and then turn around and DEMAND congress REPEAL the income tax, estate taxes and the Fed and thus allow individual, ordinary families of all classes to accumulate wealth over the generations. The people who NEED this liberty the most are todays "poor". Remove the government thieves and the central bankers from the equation and these folks will now have a fighting chance to change their lot.
Let's stop funding endless wars, stop funding government spying and oppression of our own citizens and those in other countries and give the world a chance to heal from a century of insane adventurism. Let's create a Jeffersonian nation of respect for individual rights, non-interventionism in foreign affairs and an ethic of personal creativity, devotion to learning and productive exchange between people.
Collectivist philosophies (communism, fascism, socialism of every variety) have dominated this earth for well over a century. The result?
1. Massive theft of individual and group wealth by governments through heavy taxation and by banking institutions (the Fed) charging governments "interest" on fiat money that they, the private banks, have no right to issue in the first place.
2. Huge world wars and ongoing smaller wars to feed an insatiable military-industrial complex.
3. Mass displacement of employment opportunities as companies, in understandable efforts to SURVIVE (oh my, how DARE they??), shift their operations from countries with completely insane taxation and regulation (like the USA) to other countries that are not (yet) so nutty.
We live in an Orwellian world now (if you haven't read "1984", do it now - I read it in high school but in many areas since then it has been banned from schools... wonder why?)
Hypertaxation and regulation of individuals and groups, spying on the citizenry and making perpetual war are all part of the Orwellian state's standard operating basis.
Do YOU want to live as a slave? I sure don't. Maybe you don't mind, but you sure as heck do not have any right to take me down the tubes with you. You're not going to get ANY help from the puppets on the left and right. There's only one guy in Congress who knows the score and is trying sincerely to turn the tide: Ron Paul.
Apple, in my book, deserves every single tax break it can get, and I thank them for giving others the ideas on how to save taxes as well. Should "the workers" also be entitled to similar breaks? Absolutely!! Rather than complaining about how companies "get out of paying taxes" we should applaud them and then turn around and DEMAND congress REPEAL the income tax, estate taxes and the Fed and thus allow individual, ordinary families of all classes to accumulate wealth over the generations. The people who NEED this liberty the most are todays "poor". Remove the government thieves and the central bankers from the equation and these folks will now have a fighting chance to change their lot.
Let's stop funding endless wars, stop funding government spying and oppression of our own citizens and those in other countries and give the world a chance to heal from a century of insane adventurism. Let's create a Jeffersonian nation of respect for individual rights, non-interventionism in foreign affairs and an ethic of personal creativity, devotion to learning and productive exchange between people.
I think the Europeans have more overall common sense than the Americans. The French do smoke a LOT in the cities (interestingly, not in the countryside), but they eat much healthier food and exercise a lot more. Soda is uncommon, and fast food is almost nonexistant. There are public bikes in Paris and other European cities. I'm pretty sure that good diet and good exercise is more important than avoiding smoking.
The cities also encourage biking a lot more with bike lanes that are in the sidewalk rather than in the street. Here in Los Angeles, I get in trouble for biking on the 3rd Street Promenade, which is a street with a lot of open space for biking, and the bike paths are quite dangerous partially because they block right turn lanes.
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Firstly, it's a bit hard to comprehend these sentences at all.
Greece has (relative to the US) socialism with supposedly low taxes. The US does not have such a big safety net.
Source for the tax rates?
And none of this even matters because what I'm saying is that having lower tax rates (hopefully with a few less loopholes) will bring in more taxes. At a certain point, it's not worth it to deal with offshore tax-avoidance systems. So you can have your high tax income that you say that the US needs.
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Yes, and even worse, pretty much no taxes are being paid to the US. It's better to have the corporations give the US less tax money than the current rate than to have them give it all to some little country.
There is a difference between simple and simplistic.
That's excessively simplistic. First, we have no idea if you understand the difference between a tax and a tax rate. Do you understand the Laffler Curve and its implications.
Second, there's a qualitative problem with having almost 50% of Americans paying no income tax at all. While lower income earners will never pay a significant portion of the taxes, many argue -- with good reason -- that it's unhealthy to have them pay absolutely zero taxes.
Third, the argument is way too vague. How much more should "the rich" pay? Simply stating a platitude that "the rich" should pay "more" really doesn't cut it.
They certainly can't pay any less.
Can you explain why the total employed by our federal government continues to grow? Is that really prudent?
We are paying too much.
Zero tax doesn't make sense, but it would be interesting to see what happens if they pay the low tax tier.
Zero doesn't make sense because in theory, an individual can end up helping the US more than a corporation by starting their own corporation. Some money must be invested in those who plan to work their way up.
As a fellow Libertarian, this is one of best (political) posts I've ever read on MR. Vote Ron Paul!
Actually, everything you said is nothing more than a falsehood libertarian pipe dream.
Between the late 1930's and up until the early 1980's, tax rates were at the highest they have ever been in this country yet there was a strong middle class and economic stability. When Reagan came in during the 1980's and sold trickle-down economics to gut the tax system and the middle class to people like yourself, it siphoned up money from the real job creators, we the people. Because of the lack of economic stimulation, demand is low and we find ourselves in the race to the bottom.
Can you please name for me one successful libertarian country in the history of the world that has the barebones limited gov'ment spending, blame everything on 'Bama, that you call for and is successful? No, you will not be able to because it doesn't exist.
Here's a video to better educate yourself as to why you're wrong.
I now had a chance to look at it. It shows the role that obesity has in increasing medical costs. That's completely besides the point at issue though. What is relevant is the article indicates that between 1/5 and 1/4 of people in the US are obese. Similarly with smoking, between 1/4 and 1/5 people smoke. Do you really think most medical procedures are conducted on at most 2/5s of the population? Somehow I doubt that.
This is the problem with every socialistic system. Some money is wasted. You have to make the taxes just right so that the people survive and can work their way up, but they aren't lazy, and there isn't too much lost in the system.
I think the US puts too much into the system, including public education. Washington DC, for example, has one of the highest education budgets but comparably horrible education. The schools have a problem much more important than money: they are dragged down by bad teachers with tenure and kids who don't want to work. Even community college has these issues. I took a French class at SMC over the summer that was very easy, but there were a lot of kids (about 8 years older than me) who failed out and really did not give a @#$% about school.
Apple headlines always draw attention. That's why this is a story. Every major and minor corporation does everything in their power to reduce their tax burden. As do any individuals who are reasonably intelligent.
Beyond the fact that Apple headlines draw attention, they are also notorious for NOT being big political donors. Some individuals within the company may be privately, but the Apple Corporation is not.
Look at GE, for the second year in a row (and probably more) they have paid zero dollars in federal income taxes. They are a very profitable company and their CEO is an advisor to the President. They also donate lots of money to political campaigns and own a major media conglomerate. I don't see the media vitriol against GE that I do against Apple--and Apple pays taxes!
As has been stated by others, we must also understand that when corporations are called greedy for not paying taxes etc., it is typically intended as a rallying cry for class warfare. Anyone who has ever managed a business (no, not like being an assistant manager at Burger King) understands that corporations (big or small) do not actually pay taxes. They simply send money to the government and then collect it back from their customers.
Every single dollar that Apple pays in corporate taxes is actually being paid by all of us.
These stories are written just to make this company look bad. They're doing no differently than the majority of corporations, and are arguably more generous than some. At the end of the day their should be no income tax of any kind anyway, so really what's all the fuss about?
Beyond the fact that Apple headlines draw attention, they are also notorious for NOT being big political donors. Some individuals within the company may be privately, but the Apple Corporation is not.
Look at GE, for the second year in a row (and probably more) they have paid zero dollars in federal income taxes. They are a very profitable company and their CEO is an advisor to the President. They also donate lots of money to political campaigns and own a major media conglomerate. I don't see the media vitriol against GE that I do against Apple--and Apple pays taxes!
As has been stated by others, we must also understand that when corporations are called greedy for not paying taxes etc., it is typically intended as a rallying cry for class warfare. Anyone who has ever managed a business (no, not like being an assistant manager at Burger King) understands that corporations (big or small) do not actually pay taxes. They simply send money to the government and then collect it back from their customers.
Every single dollar that Apple pays in corporate taxes is actually being paid by all of us.
These stories are written just to make this company look bad. They're doing no differently than the majority of corporations, and are arguably more generous than some. At the end of the day their should be no income tax of any kind anyway, so really what's all the fuss about?