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How Apple Minimizes its Corporate Tax Burden

BaldiMac said:
:confused: Apple invests money. Entity that is invested in hires people to do things.
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Not necessarily.
Some companies use the invested funds to pay down debt or buy new equipment.
In some cases the new investments are used to improve efficiency of an operation which can actually lead to net job losses. ;)
Econ 101 stuff.


What Apple is doing is using legal tax shelters to pay as little tax as possible.
Setting up an office in a country with a low tax rate and then declaring it as the main distribution point for your products is nothing new.
The sole purpose for this type of office is for the tax savings. It would not exist otherwise.
Is it ethical... depends on who you talk too.
I personally think it's BS.
Pay the taxes where you earned the money. That is the ethical thing to do.
 
samcraig said:
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.
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And increase their workforce to manage the patent portfolio, pay more attorneys to enforce the patents, pay researchers to find out when the patents are violated, etc...[/QUOTE]

samcraig said:
Maybe they use it to pay of debts. There are many things a company does with cash besides start hiring more people.
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To other companies/entities that can then take the money and.... hire more people?

samcraig said:
I am not suggesting money never means an increase in staffing. But by the same token - it doesn't necc. cause it either.
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So a lack of money causes an increase in staffing?
samcraig said:
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.
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And not exactly relevant since we are talking about what corporations do, not what individuals do.
 
kd5jos said:
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.
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Your definition is still too vague. In accordance with which rules or standards? Tell me about those. The rest sounds fine. But those standards and rules may be objectionable.
 
rjohnstone said:
Not necessarily.
Some companies use the invested funds to pay down debt or buy new equipment.
In some cases the new investments are used to improve efficiency of an operation which can actually lead to net job losses. ;)
Econ 101 stuff.
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So these people can go and get employed somewhere else.... by a corporation. There is a diminishing return on efficiency improvement. Eventually companies HAVE to broaden the services or products they offer, improve the services or products they offer, or a combination to stay competitive. They need more people to do that.

Econ 102 stuff.
 
BaldiMac said:
:confused: 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?
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You seem to be always on the side of strict logic and one with the burden of proof - and yet you have none with your statement.

I never said the money didn't create jobs. I asked that you provide some/any proof that it has. How much of the 100B is invested? Do you even know?

It's more like you're posting wishful thinking/assumptions rather than your usual straight forward facts. So I'm surprised. And further surprised you don't see why I would question you about it.

Yes. I think that Apple has created at least 1 job with their investments. But beyond that is PURE conjecture. And not something I'm willing to praise them vs question how they use loopholes to pay as little taxes as possible.

With the extremes they go to pay as little taxes as possible - one can deduce that their main concern in their investments isn't the creation of jobs - but profit on their investments.
 
rjohnstone said:
Not necessarily.
Some companies use the invested funds to pay down debt or buy new equipment.
In some cases the new investments are used to improve efficiency of an operation which can actually lead to net job losses. ;)
Econ 101 stuff.


What Apple is doing is using legal tax shelters to pay as little tax as possible.
Setting up an office in a country with a low tax rate and then declaring it as the main distribution point for your products is nothing new.
The sole purpose for this type of office is for the tax savings. It would not exist otherwise.
Is it ethical... depends on who you talk too.
I personally think it's BS.
Pay the taxes where you earned the money. That is the ethical thing to do.
Click to expand...

Quoted for sensibility.
 
samcraig said:
You seem to be always on the side of strict logic and one with the burden of proof - and yet you have none with your statement.

I never said the money didn't create jobs. I asked that you provide some/any proof that it has. How much of the 100B is invested? Do you even know?

It's more like you're posting wishful thinking/assumptions rather than your usual straight forward facts. So I'm surprised. And further surprised you don't see why I would question you about it.

Yes. I think that Apple has created at least 1 job with their investments. But beyond that is PURE conjecture. And not something I'm willing to praise them vs question how they use loopholes to pay as little taxes as possible.

With the extremes they go to pay as little taxes as possible - one can deduce that their main concern in their investments isn't the creation of jobs - but profit on their investments.
Click to expand...

As long as you agree that all companies avoid taxes
 
kd5jos said:
So these people can go and get employed somewhere else.... by a corporation. There is a diminishing return on efficiency improvement. Eventually companies HAVE to broaden the services or products they offer, improve the services or products they offer, or a combination to stay competitive. They need more people to do that.

Econ 102 stuff.
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Nice strawman, but it's not relevant to the comment I was replying too.
And your example of growth is patently false.
A company can broaden its services and offerings without hiring a single new employee.
It's called process improvement.

My team does it all the time. In fact we just let 10 people go because we improved the product development process and eliminated the need for those resources.

You must have fallen asleep in your econ class. ;)
 
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kd5jos said:
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.
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Clearly you do not understand there is a huge difference between what is ethical and what is legal.

It is a cake walk to be unethical and very legal.
Legal != ethical. There is a difference between the 2.

I never said anything about what Apple was doing is illegal. What I am saying is what they are doing is unethical.
 
reedmartin said:
As long as you agree that all companies avoid taxes
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Where did I agree to that?

And whether or not I agree - or they do - doesn't excuse one company over another.

If I'm speeding and you're speeding - we're both speeding. The fact that you get pulled over and I don't doesn't make what you did any less guilty.
 
Rodimus Prime said:
Clearly you do not understand there is a huge difference between what is ethical and what is legal.

It is a cake walk to be unethical and very legal.
Legal != ethical. There is a difference between the 2.

I never said anything about what Apple was doing is illegal. What I am saying is what they are doing is unethical.
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And I asked you to support your assertion. Clearly you don't understand that stating something is unethical != unethical.
 
samcraig said:
[Blah blah] - and yet you have none with your statement.

I never said the money didn't create jobs. I asked that you provide some/any proof that it has. How much of the 100B is invested? Do you even know?
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Look at Apple's 10Q. Short and long-term marketable securities are clearly listed.
http://files.shareholder.com/downlo...-bef7dab6f2e4/Q2_2012_Form_10-Q_As_Filed_.pdf

It's more like you're posting wishful thinking/assumptions rather than your usual straight forward facts. So I'm surprised. And further surprised you don't see why I would question you about it.
Click to expand...

Because it's an obvious correlation. You even agree with with me here:
Yes. I think that Apple has created at least 1 job with their investments. But beyond that is PURE conjecture.
Click to expand...

And not something I'm willing to praise them vs question how they use loopholes to pay as little taxes as possible.
Click to expand...

I didn't praise them or say anything about their tax strategy. I just refuted the ignorant claim that Apple's $100+ billion was not being used to create any jobs.
 
samcraig said:
Argument is far from over. Did Apple invest in that company? Because I believe - in the big picture here - we're talking about Apple and their investments. Thanks.
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http://www.kpcb.com/initiatives/ifund/

There, done.

----------
JohnDoe98 said:
Your definition is still too vague. In accordance with which rules or standards? Tell me about those. The rest sounds fine. But those standards and rules may be objectionable.
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The rules and standards are listed here:
http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks

Feel free to read them.
 
BaldiMac said:
I didn't praise them or say anything about their tax strategy. I just refuted the ignorant claim that Apple's $100+ billion was not being used to create any jobs.
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The problem I have with your argument is that you seem to want to intimate that 100B has created a plethora of jobs. It's easy to say that the money has created jobs. No doubt at least a handful of jobs has been created. No one would ever argue that. The issue REALLY being discussed is whether or not the amount of jobs that have been created by Apple's investments REALLY can be leveraged to "excuse" them from the negativity regarding their tax burden manipulations.

But that required reading the entire thread and understanding the true reason for such statements. Not just posting to split a hair.
 
samcraig said:
Where did I agree to that?

And whether or not I agree - or they do - doesn't excuse one company over another.

If I'm speeding and you're speeding - we're both speeding. The fact that you get pulled over and I don't doesn't make what you did any less guilty.
Click to expand...

What i meant was i hope you agree that every company does it. You're acting as if Apple is doing something unheard of or brand new and that their actions are the pinnacle of unethical. This is not news.
 
rjohnstone said:
That is far from a "standard".
That is one group's idea for a new tax law.
Standards are things that are commonly accepted practices.
This is not.
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It's irrelevant. The definition of the adjective form of fair is:
In accordance with the rules or standards

Notice the OR. It is a set of rules, and thereby fits the definition.

Second, it has at one time been a commonly accepted practice, and is currently a commonly accepted practice by two of the largest economies in the world: Florida and Texas.
 
reedmartin said:
As long as you agree that all companies avoid taxes
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This is a very vague way of stating a very obvious truth: all companies avoid overpaying taxes. No company knowingly pays more than they have to. There are always some companies that do attempt to avoid taxes that they are legally required to pay, and they end up having bad things happen to them eventually. Any company that didn't try to make sure they didn't pay any more in taxes than was legally required would have to be run by morons. Apple has some of the smartest executives in the world running it, so it makes sense that they would be adept at making sure they paid only what taxes they actually were required to pay. This is both legal and ethical, and in fact is a requirement of running a public business.

jW
 
kd5jos said:
It's irrelevant. The definition of the adjective form of fair is:
In accordance with the rules or standards

Notice the OR. It is a set of rules, and thereby fits the definition.
Click to expand...
I see you're grasping at straws again.
The "or" is irrelevant since the "rules" they propose are not commonly accepted either.
kd5jos said:
Second, it has at one time been a commonly accepted practice, and is currently a commonly accepted practice by two of the largest economies in the world: Florida and Texas.
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So Florida and Texas are independent from the U.S. now?
And no, Florida and Texas do not use the Fair Tax method described in your previous post.
Payroll taxes are still collected based on the current federal tax laws.
 
Mal said:
This is a very vague way of stating a very obvious truth: all companies avoid overpaying taxes. No company knowingly pays more than they have to. There are always some companies that do attempt to avoid taxes that they are legally required to pay, and they end up having bad things happen to them eventually. Any company that didn't try to make sure they didn't pay any more in taxes than was legally required would have to be run by morons. Apple has some of the smartest executives in the world running it, so it makes sense that they would be adept at making sure they paid only what taxes they actually were required to pay. This is both legal and ethical, and in fact is a requirement of running a public business.

jW
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I wish we could count how many times this was said AND ignored in this very thread.

Like i said in my first post in this thread, it's quite obvious who here owns businesses and who doesn't!
 
samcraig said:
The problem I have with your argument is that you seem to want to intimate that 100B has created a plethora of jobs. It's easy to say that the money has created jobs. No doubt at least a handful of jobs has been created. No one would ever argue that. The issue REALLY being discussed is whether or not the amount of jobs that have been created by Apple's investments REALLY can be leveraged to "excuse" them from the negativity regarding their tax burden manipulations.

But that required reading the entire thread and understanding the true reason for such statements. Not just posting to split a hair.
Click to expand...

If you want to go meta on this...

If Apple had paid one in three dollars it had made in taxes, it could not have done EVERYTHING that it has done with the money it has. It couldn't have created programs where it pays out billions to developers (app store) AND paid as many people for R&D AND paid for as many sales locations (AND the required people to work in them), AND....

It would have had to make choices, scale things back, not produce as much, and ultimately not hire as many people. Or do I REALLY not understand scarcity?
 
reedmartin said:
I wish we could count how many times this was said AND ignored in this very thread.

Like i said in my first post in this thread, it's quite obvious who here owns businesses and who doesn't!
Click to expand...

It's also quite obvious that people can't distinguish between what's legal and what's ethical as if they are synonymous despite how many times it's been said AND ignored in this very thread.
 
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