How Apple Minimizes its Corporate Tax Burden

[Shenaniganz08]

It's the fault of our corrupt Congress who write a corrupt tax code.

Just came in to say +1 to this

This is just one company using this "loophole"

If it's a known loophole it should be closed. This is revenue that the US desperately needs.

 

[MHardee]

Businesses do not pay taxes, ever.

The costs are merely added to the prices of goods and services.

Instead, we should be looking at Apple's payroll. How many hundreds of millions of dollars do their employees get paid?

THEY pay taxes.

Hogwash... I had a corporation and I can ASSURE you I paid taxes on the business and as an individual. In fact, several years I paid more in withholding taxes than I had previously ever hoped to make.

True their employees also pay taxes. Ever wondered how many times the same money is taxed? Many..

For example, your weekly check is $1000 gross. You pay $300 and $100 SS.. All of the deductions are based on the gross amount ($1K)... As soon as ONE of the deduction transactions occur, the $1K is no more so how can further taxes be computed on it?

 

[cb911]

All I will say is that the Governments have the right to make sure that all relevant taxes are paid. Just as businesses (and individuals) have the right to make sure that they don't pay any more than is due.

End of story.

 

[JAT]

The Bible I read talks about the evil of money and giving it away to help others,

I just want to point out that this is not accurate. The Bible says the pursuit or love of money is evil. Common error. 1Ti. 6:9,10. And I might add it is not entirely against having money, as so many claim. For instance, a parable where the rich man is the good guy: Mt. 18:23-35.

 

[samcraig]

Unless you think that it's sitting under a mattress somewhere, of course it's being used to create jobs. It's almost all invested somewhere.

Where? Please list the companies/etc that the entire (or majority) of Apple's reserves are invested in and how many jobs that money has generated. DO you have any sources. Or are you "supposing?"

 

[Rocketman]

Money market funds are required to keep 10% of their assets in 7 day liquidity funds and 30% in 30 day liquidity funds. Apple discloses some general details of how domestic US funds are invested and they skew toward short term.

Money market funds "broke the buck" during the transition of the Bush/Obama administrations.

I suggest managing funds for return OF capital not return ON capital in these times/conditions.

I give offlist advise in this field. 30 years of provable advise.

Rocketman

 

[ReelAction]

Not sure I understand the point

What was the point of the NYT article, it certainly didn't have a conclusion....

Was the point that companies should "ante" up money in the form of taxes, and hope and pray that they can stay competitive???

Was the point that tax regulations should be changed, from a global level to the local level????

Or was it the NYT with their "burr under the saddle" with Apple, venting and trying to create ill will.
It is apparent that most all multi national companies are using the same tax avoidance tactics, but the NYT's chose to use Apple as an example, and not others such as GE, Chevron, Google etc.

 

[Cormac]

Re: How Apple Minimizes its Corporate Tax Burden

Good for Apple! As someone else said on these pages, businesses do NOT pay taxes. They are just collectors of taxes. They get the money from their customers. 🙂

 

[codo]

The only way to combat this in my view is for every country to set the same rate of corporation tax. Therefore there would be no incentive to swing money across several continents to avoid tax.

But... this will NEVER happen. Smaller countries like to be competitive and attract big business.

As long as Apple meets its legal obligations, it has done nothing wrong.

However, it is my personal view that companies should make contributions back into society when they have extracted wealth, be it in the form of tax or other charitable projects. (I'm not saying Apple hasn't done this, just that companies should!)

 

[wmkim]

Couldn't agree more.

Taxes are created and collected for good reason, and companies/people who dodge them are cheating that system. This puts pressure on those who do pay taxes, and/or causes governments to have less funds to achieve their goals.

Bad Apple, bad.

You all talk as if they paid no taxes. They still paid BILLIONS in taxes. How much is "enough" then?

And all that profit that didn't meet your tax burden requirement-- do you think that money just sits in Tim Cook's pockets? Or is the use of that money in acquiring other strategic companies a LESS efficient use of capital than giving it to a government entity so they can buy votes by handing that money over to non-productive assets in the economy?

I'd rather have Apple keep its billions and continue hiring people and building/expanding facilities that employ thousands of people so those people can get real income versus giving Congress and this administration any more money to waste.

 

[reedmartin]

You all talk as if they paid no taxes. They still paid BILLIONS in taxes. How much is "enough" then?

And all that profit that didn't meet your tax burden requirement-- do you think that money just sits in Tim Cook's pockets? Or is the use of that money in acquiring other strategic companies a LESS efficient use of capital than giving it to a government entity so they can buy votes by handing that money over to non-productive assets in the economy?

I'd rather have Apple keep its billions and continue hiring people and building/expanding facilities that employ thousands of people so those people can get real income versus giving Congress and this administration any more money to waste.

The problem is some ppl here think the money actually is in Tim cooks pockets and he's partying every night. Silly...i know.

 

[kd5jos]

I don't get it...

Well said.

How is a company that isn't doing anything unlawful, immoral, or unethical, acting unethically?

Do you truly believe it is ethical to waste billions of dollars unnecessarily?
That's the only thing I could think you are agreeing with.

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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.

Let's see, new data center in NC, expanding the locations in Oregon and Texas. Just to name three off the top of my head.

As for stockpiling cash... You mean a company has the forethought to make sure it doesn't have to run to the government for a bailout, and you want to complain? What the hell kind of bizzaro world do you live in?

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The only way to combat this in my view is for every country to set the same rate of corporation tax. Therefore there would be no incentive to swing money across several continents to avoid tax.

But... this will NEVER happen. Smaller countries like to be competitive and attract big business.

As long as Apple meets its legal obligations, it has done nothing wrong.

However, it is my personal view that companies should make contributions back into society when they have extracted wealth, be it in the form of tax or other charitable projects. (I'm not saying Apple hasn't done this, just that companies should!)

No, it's not the only way to combat it. There have been some great ideas posted on how to handle it...

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What was the point of the NYT article, it certainly didn't have a conclusion....

Was the point that companies should "ante" up money in the form of taxes, and hope and pray that they can stay competitive???

Was the point that tax regulations should be changed, from a global level to the local level????

Or was it the NYT with their "burr under the saddle" with Apple, venting and trying to create ill will.
It is apparent that most all multi national companies are using the same tax avoidance tactics, but the NYT's chose to use Apple as an example, and not others such as GE, Chevron, Google etc.

The point was that the NYT wanted to demonstrate its inability to do basic journalism. They used the wrong numbers, and came to the wrong conclusion. The point is they need to hire a few people that can explain to their reporters how business taxation works. That was the point.

 

[BaldiMac]

Where? Please list the companies/etc that the entire (or majority) of Apple's reserves are invested in and how many jobs that money has generated. DO you have any sources. Or are you "supposing?"

What in the world? I didn't think this was a controversial statement. Look at their financial statements (10-Q). Most of the $100+ billion is in short or long term marketable securities. I'm not sure what you think the money is doing.

 

[kd5jos]

Surely you realize money that is paid to the government gets reinvested in programs and things for society??

Too bad in scenario #1, the only people who will be getting increased salaries are the executives at the top getting 8 figure bonuses, while the retail people who have to deal with all the whiny consumers who complain about sharp edges will still make a paltry $9.

Like Headstart. Where after 40 years of investing in underprivileged children (we currently spend 7 BILLION per year on the 1 MILLION enrolled children), there is NO DISCERNIBLE positive benefit. There is conclusive evidence that children enrolled in the program receive no net benefit over children not enrolled in the program. NONE.

So yes, can we please continue to throw money around where it is GUARANTEED to have no net benefit? This was an article in Time, feel free to look it up...

 

[samcraig]

What in the world? I didn't think this was a controversial statement. Look at their financial statements (10-Q). Most of the $100+ billion is in short or long term marketable securities. I'm not sure what you think the money is doing.

Explain how these investments are creating jobs. You made the statement, not me.

 

[kd5jos]

Well that's what my uncle use to say when he didn't file any tax returns. He wants the money, so you can't fault him for not paying his taxes. I mean it's just a BS excuse. Corporations aren't robots from the future. They're run by people and people can behave in morally and ethically responsible ways. It's the government's responsibility to see that they do, but you have an entire party that wants NO regulations of ANYTHING. That way they're free to do anything they want with no consequences. What a lovely idea. I got labeled a "communist" at work for saying I support health care reform and keeping social security. Yeah, if that makes me a communist, then they must be anarchists to want to get rid of all regulation.

The reason that your argument is completely WRONG is, Apple paid its taxes! That's been stated several thousand times... Your Uncle NOT paying taxes, and Apple legally paying taxes, and your tax avoiding Uncle, have NOTHING WHATEVER to do with each other. And this unadulterated line of crap "That way they're free to do anything they want with no consequences," is that what happened to MCI Worlcom? Enron? Goldman Sachs? Do you even READ the news?

I don't know a lot about the Mormon Church, but if he's their representative for ethics and morality, I don't want to know any more about them. The Bible I read talks about the evil

NO IT DOESN'T! I talks about the evil of LOVING money (more than people).

of money and giving it away to help others

So money isn't evil, and has a purpose?

not hoarding millions and billions and taking control the system to get millions more.

And this is exactly what Apple ISN'T doing. Why don't you take a basic economics class so that you can present something valid to this argument?

Yes, the rich pay more taxes in absolute dollars, but they also make a LOT more and quite frankly a lot more than they need to live in luxury, let alone their basic needs that many of us paying a higher percentage of taxes have to actually be concerned about.

Who do you think shoulders most of the tax burden in this country? Those with money, or those without money?

Hey, but get rid of food stamps. Get rid of welfare.

The first intelligent thing you've said. It is proven that a handout creates an entitled dependent, which your whining sounds like :rolls eyes:

 

[reedmartin]

Explain how these investments are creating jobs. You made the statement, not me.

What do you suppose they're doing with the invested money? I'm just curious if you believe they're investing money and then Tim has it in a huge vault where he swims in it like scrooge mcduck? I understand you're arguing for the sake of arguing but come on...

 

[kd5jos]

First, take a class in basic economics....

Explain how these investments are creating jobs. You made the statement, not me.

Apple invests in *SOMETHING* That doesn't mean that Apple hands money to an entity that then takes it and stuffs it in a mattress. That will not yield a profit. So Apple invests in something that is yielding a profit, like other companies, that hire people. Simple enough?

 

[kd5jos]

I'm not. I'm asking people who are proponents of the FairTax why they are calling it FairTax. My question is: What is fair about it? You realize they intentionally chose that word, and for a reason. If the tax wasn't aiming at fairness, to call it FairTax would be intentionally deceptive and disingenuous. Maybe you don't have a qualm with deception, lying, etc. I don't know. Either way, I think asking anyone who is a proponent of the FairTax what is fair about their tax proposal is a legitimate question. And if their tax proposal isn't fair, then we need not even entertain it. Time to actually stop dodging and start answering for once.

Okay, I'm game. In order to define FairTax we must first determine if the word Tax is the Noun or the Verb.

Noun: A compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions

Verb: Impose a tax on (someone or something).

It is likely that the definition of tax we should be using is the noun version. My reasoning is we are talking about the system of taxation, a thing, not the act of taxing someone. Also the term FairTax is the name of a thing or idea, not an action. Since that is the case we have to use the adjective version of fair to modify tax.

Adjective: In accordance with the rules or standards; legitimate.

The other option is to modify the verb version of tax with an adverb

Adverb: Without cheating or trying to achieve unjust advantage: "he played fair"

Since we're using the noun form of tax, we HAVE to use the adjective version of fair. Let's see what that creates...

FairTax definition: In accordance with rules or standards this would be a legitimate system created for controlling compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.

I went to the website and read what was there. I could not find anything contradictory to the above definition. Please identify what you found that shows the above definition does not apply, or that the use of the adjective fair was improperly applied.

 

[samcraig]

Apple invests in *SOMETHING* That doesn't mean that Apple hands money to an entity that then takes it and stuffs it in a mattress. That will not yield a profit. So Apple invests in something that is yielding a profit, like other companies, that hire people. Simple enough?

I am well aware of how investments work. I was asking BaldiMac to back up his statement with actual facts not conjecture. What and how is Apple investing its money and how many quantitative jobs are those investments making? Further - these companies that Apple invests in aren't necc HIRING new people. Where is the proof of that? If Apple invests - in say - GE - and GE is having layoffs, then Apple isn't creating jobs. They might be preventing further layoffs. But more likely - they aren't really affecting jobs at all - but rather infusing GE with capital for continued R&D or other business expenses.

The whole money invested in companies EQUALS creating jobs isn't anything that can be proven directly at all. It's a myth.

 

[BaldiMac]

Explain how these investments are creating jobs. You made the statement, not me.

😕 Apple invests money. Entity that is invested in hires people to do things.

 

[reedmartin]

I am well aware of how investments work. I was asking BaldiMac to back up his statement with actual facts not conjecture. What and how is Apple investing its money and how many quantitative jobs are those investments making? Further - these companies that Apple invests in aren't necc HIRING new people. Where is the proof of that? If Apple invests - in say - GE - and GE is having layoffs, then Apple isn't creating jobs. They might be preventing further layoffs. But more likely - they aren't really affecting jobs at all - but rather infusing GE with capital for continued R&D or other business expenses.

The whole money invested in companies EQUALS creating jobs isn't anything that can be proven directly at all. It's a myth.

Wow. This is amazing. Do you really believe what you're saying?!

 

[samcraig]

😕 Apple invests money. Entity that is invested in hires people to do things.

Where's the proof in that though? As I wrote earlier - just because money is invested into a company doesn't mean it increases its workforce.

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Wow. This is amazing. Do you really believe what you're saying?!

Of course. Do you have proof of any sort that just because a company gets an infusion of cash - they increase their workforce. Maybe they use the money to buy patents. Maybe they use it to pay of debts. There are many things a company does with cash besides start hiring more people.

I am not suggesting money never means an increase in staffing. But by the same token - it doesn't necc. cause it either.

ETA: On an individual level. One of the reasons that the stimulus package didn't work that well was because people used the money to pay off debt or it was simply saved. Not exactly what was "supposed" to happen with that infusion.

 

[kd5jos]

There is a difference between paying to much and exploiting loopholes.

Okay, I'll entertain this... What is the difference between not paying more than you are legally required to, and not paying more than you are legally required to?

The exploiting loop holes to the level Apple and other big companies. They start crossing ethical lines when they do things like exploiting loopholes by putting token offices and PO boxes then routing all their profits threw those locations.

Stop. You are NOT unethical for doing everything that is legally required of you, which Apple has done. In FACT, there is NO accusation of wrong doing. The ONLY place that wrong doing exists is in peoples imagination.

What action has Apple taken that is unethical (I've heard that word thrown around in this discussion, and NO ONE has supported it)?

How is it unethical to NOT waste? In what way are ethics being violated when Apple has the money to NOT go to the government and ask for a bail out? Explain.

 

[BaldiMac]

Where's the proof in that though? As I wrote earlier - just because money is invested into a company doesn't mean it increases its workforce.

😕 Your asking for proof that you know is not available. Is it really hard to accept that $100 billion in investment has created at least one job?