How Apple Minimizes its Corporate Tax Burden

[benspratling]

So who do you think helps create the tax code? You don't think corporations and their lobbyists or the money they donate to Republican/democrats reelection campaigns play any role?

Hmmm... I wonder what happened to the $20 billion the government said GM didn't have to pay back? Auto Workers Union, was given control of GM, and then sold it. I call that unfair. 100% of their contributions go to democrats.
And whose campaign gets the money the government put into Solyndra? Do we know, anyone got any guesses? You think a phony solar cell company is going to give money to Romney. Heck I'm a republican and I don't even want to give money to romney.

 

[JAT]

I never said it was individuals' income tax. I said was from their employees. That's where corporate income taxes come from.

Explain. Last I checked, companies paid employees, not the other way around.

 

[lilo777]

Good, less tax the better.

Rich people dont hang on to money, they invest it in other things, they pay employees they start new ventures.

Government just force their crap services on to you from funds they steal from the productive class.

Tax = violence because if you dont pay you eventually get police with guns to your door.

We need less violence not more.

peace.

They invest... Rrrright. he $100 million that they paid to Tim Cook and millions more to others and now a dividend - it's not an investment. $100 Billion that they have in bank it's not an investment. Whoever gets a lot of money - there will be excesses. Tim Cook will "invest" his money on a 200 yard yacht (as we know Steve Jobs did). The society could get by without this and be much better off.

 

[Will do good]

New York Times been gunning after Apple for months, all corporation are doing the same thing. But nailing Apple to the wall sells more papers.

 

[rdowns]

New York Times been gunning after Apple for months, all corporation are doing the same thing. But nailing Apple to the wall sells more papers.

I'm hoping some journalist decides to look into the tax paying history of the New York Times.

 

[Rennir]

LOL. Just funny listening to someone calling the folks who manufacture luxury "magical" computers "profit mongers". Gees. Jealous much?

FYI, profits are a numerical approximation of the benefit the customer finds to have been added to the customers.. you call them "society". Just look at the formula (profit = what a business added to society (as evaluated by the customer... ahem "society") - what a business took from society (as evaluated by other customers, right darn, "society")) . So when a business operates at the maximum profit level, they are operating at the maximum-contribute-to-society level, as evaluated by customers, I mean "society".

I mention this because, I think, maybe no one ever told you that the word "capitalism" is a marketing term that Karl Marx made up. The rest of us operate in a system called "free trade" in which we don't like it when our neighbors get jealous of our high productivity and threaten us with government force (fines, imprisonment, death) if we don't hand over the hard work of our hands for free. We're loving and compassionate people, not jealous people, which is why we don't just jail you all immediately for suggesting it, but we have limits.

So you really think for profit businesses exist because they want to contribute to society? You think that's their main objective?

So tell me how those financial institutions add value to society, when they make ridiculous amounts of money by betting with other people's money, luring poor people to believe they can pay the loans they just took, packaging those sub prime loans into triple A rated bonds, and then betting against those bonds.

 

[kdarling]

Businesses do not pay taxes, ever.
The costs are merely added to the prices of goods and services.

Cool. Then people also do not pay income taxes, since it's also just added to their salary.

If Apple saves money from not paying a lot of taxes, then Apple has more incentives to offer top engineering/ management/ marketing talent to make their products even better and to make their employees/customers even happier.

Nice idea, except Apple is not known for paying its rank and file employees high salaries, and puts a relatively low percentage back into R&D.

How many of you volunteer to pay MORE income tax because you think it's the 'right' thing to do? Yeah, that's what I thought. Why should Apple?

No one's talking about paying more than their fair share. If you make $30K a year and pay $10K in taxes, should someone making $100K a year also pay $10K?

The point is that most people don't devote great amounts of time and effort into creating incredibly complex tax dodges like Apple has.

 

[DakotaGuy]

This might date me a bit, but I bet Alex P. Keaton would be impressed!

 

[cvaldes]

So who do you think helps create the tax code? You don't think corporations and their lobbyists or the money they donate to Republican/democrats reelection campaigns play any role?

I see you cleverly ignored the part that states that the U.S.A. has the highest corporate tax rates when both federal and average state rates are combined.

You don't understand how lobbying works. It's not like the Fortune 500 companies say, "hey, let's tell Congress to lower our rates." Lobbying tends to be highly industry sector driven. A typically lobby would represent trade association of similar companies, like chip manufacturers, petroleum producers, breweries, school teachers, etc.

For things like campaign contributors, the lobbyists are highly focused on where they put their energy.

That said, based on the current corporate tax rates here in the U.S., it appears that lobby efforts in reducing overall tax liability for the entire business community has largely been a failure. Remember that the 35% corporate tax rate is actually higher than that of US individuals.

 

[themoffster]

Just over 9%.
As a Brit it doesn't affect me how much they pay, but when you consider I'll be getting taxed at 40%, it pissed you off to see these companies paying a quarter of what i pay...

 

[lilo777]

How many of you volunteer to pay MORE income tax because you think it's the 'right' thing to do? Yeah, that's what I thought. Why should Apple?

You are suggesting that we have a system where the greedier people/corporations pay less and the generous ones pay more. Is that your definition of fairness? To promote the bastards?

 

[Rennir]

New York Times been gunning after Apple for months, all corporation are doing the same thing. But nailing Apple to the wall sells more papers.

I think the underlying problem is that "diehard" apple fans single out Apple as the greatest thing the world has seen since the invention of the wheel. And they spread this perception, when in reality, Apple is nothing special. That singles out Apple as a target for the media because people will want to read about it.

 

[cadillac1234]

I agree, eliminate corporate taxes entirely. They only artificially increase the price of goods in 2 ways: 1) raising the price of goods to fund the tax, 2) force the hire of people to do the paperwork (what do we call paper work in a digital age? form work? spread sheet work? sheet work... I like it ). They're only real use is for politicians getting elected by folks who don't understand basic economics, and do we want those people running show?

I'd love to see the look on those people's faces when eliminating the corporate taxes simultaneously raised their paychecks and reduced the prices of goods on the shelves

The neo-capitalists love to say everyone needs to pay their fair share. I agree 100%.

As a Californian and US based corporation, Apple* enjoys an extreme amount of privileges that they could not find anywhere else in the world.

-They receive the best patent protection in the world and a court system that will hear and assist in any possible infringements.
-A pro-commerce government
-Police and military protection resulting in a very stable social setting.
-One of the best transportation and logistical networks ever known to man
-An incredible resource of educated and trained workers graduating from the public university system

While some of the above perks were assisted by the independent sector, the vast majority was put in place and maintained by the government.

It's not too much to ask Apple* to pay a AMT- type of minimum tax to help maintain it.

It's about paying their fair share and contributing to a better society for all. I do not blame Apple for using a loophole. I only blame the people that created it and still don't see these loopholes as a problem.


*Apple can be substituted for any US corporation with multi-national income streams.

 

[Ca$hflow]

If I was making more than enough to get by and I saw a huge portion of my fellow citizens struggling I certainly would try to help.

I'm a dirty socialist though

Would you pay that extra money to the government or would you give money to a hospital or charity? There is a big difference there. My spidery scence tell me if the extra money went to the government only a small percentage would make it to fellow struggling citizens. I don't trust the government in spending money wisly. It would be like giving a drunk a drink.

 

[econgeek]

If taxes are moral, was the USA an immoral country before 1900?

The two taxes americans (and businesses) pay at the federal level are income taxes and inflation. The IRS was created in 1915 and the Federal Reserve in 1913. Before that there was no federal income tax or consistent inflation for over 100 years.

No, people who say taxes are "moral" are people who think that impoverishing people is moral.

Taxes and inflation are just the mechanism by which the many are kept poor and the few elite criminals that run government are enriched.

Since said criminals run the "education" indoctrination centers that the many are forced-- by law-- to send their kids, naturally most kids learn that this theft is "moral" and that failing to be enslaved in this manner is "immoral".

And I won't even get into the economic nonsense.

Just note this- over the past century poverty has gone up, when it was on its way to being eliminated. All of these countries form the EU to the USA are completely bankrupt because once they start stealing they want to steal it all.

You are going to suffer for your own ignorance, and lack of a moral spine.

Taxes are theft. Inflation is theft.

Apple is acting morally here.

 

[Rogifan]

Aren't taxes on corporations essentially double taxation? People should lay taxes not corporations.

I'm waiting for the New York Times expose on GE's taxes or the green companies that get taxpayer dollars and then layoff thousands of employees or go belly up.

 

[Stephen123]

There are a couple of fundamental flaws in the NYT article:
1) It is easy to know Apple's tax rate and it is 25% not 10% as can be seen here: http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii
2) NYT claims that most of the value of Apple products comes from their design, which happens in the US. This is a serious distortion since the manufacturing is not in the US and the total revenue also includes marketing and sales in each country.

The NYT should be more interested in the corporations paying no tax or negative tax: http://thinkprogress.org/economy/2012/04/09/460519/major-corporations-no-taxes-four-year/
GE in particular has a negative tax rate (is paid taxes by the US government) around -50%.

 

[Rodimus Prime]

While this is legal for Apple and other companies to do it is far from ethical. I honestly call setting up a PO box or a token office for tax reasons extremely unethical.

I would have zero issue if the hammer started coming down and making it harder to pull off these tricks. Only the huge players can abuse the tax system like this giving them yet another massively unfair advantage against smaller companies.

 

[Rennir]

I see you cleverly ignored the part that states that the U.S.A. has the highest corporate tax rates when both federal and average state rates are combined.

You don't understand how lobbying works. It's not like the Fortune 500 companies say, "hey, let's tell Congress to lower our rates." Lobbying tends to be highly industry sector driven. A typically lobby would represent trade association of similar companies, like chip manufacturers, petroleum producers, breweries, school teachers, etc.

For things like campaign contributors, the lobbyists are highly focused on where they put their energy.

That said, based on the current corporate tax rates here in the U.S., it appears that lobby efforts in reducing overall tax liability for the entire business community has largely been a failure. Remember that the 35% corporate tax rate is actually higher than that of US individuals.

Yes but what's the EFFECTIVE tax rate? We have tax exceptions/loops so businesses pay a lot less than what the corporate at rate is on paper--case in point.

 

[guzhogi]

Read "Rich Dad, Poor Dad" , you will then understand two things:

1. Apple is just doing what they should be doing
2. People who are negative about this post are the poor / middle class who are too lazy to change themselves, but rather stay in a 9-5 day job and blaming the rich.

While there are lazy poor & middle class people, to think that it's entirely their fault that they're not rich is foolish. As rennir suggests, corporations often lobby legislators for better tax breaks. If corporations do that, don't you think rich/politically affluent people might lobby CEOs of corporations to hire their friends, kids or whatever over some poor kid with much better skills? Look at the whole UIC admissions/clout scandal a while back. A lot of kids who did awful in high school got into UIC because their father's a big politician and prevented many no name kids with higher tests scores and more eagerness to learn from getting in.

So who do you think helps create the tax code? You don't think corporations and their lobbyists or the money they donate to Republican/democrats reelection campaigns play any role?

 

[econgeek]

While some of the above perks were assisted by the independent sector, the vast majority was put in place and maintained by the government.

I think its hilarious when you guys point out things like police-- an agency that works for the government, and not for the people, to ensure that government edicts are enforced-- as "benefit"s that justify the theft via taxes.

If government benefits were worth a damn, they wouldn't have to threaten violence to make you pay. You don't see Apple threatening violence to make people buy their computers.

In the bay area, in the 1800s, private police forces existed, the people voluntarily paid for them and they were answerable to the people Not the corrupt situation you have now.

This is literally like a slave owner claiming the chains used to keep the slave in bondage justify the slavery in the first place-- after all, he needs to work to cover the cost of those chains!

 

[lilo777]

Agreed 100%

So you think Apple has an "ethical" obligation to pay more tax?

Agreed 100%

How many of you volunteer to pay MORE income tax because you think it's the 'right' thing to do? Yeah, that's what I thought. Why should Apple?

I see you cleverly ignored the part that states that the U.S.A. has the highest corporate tax rates when both federal and average state rates are combined.

You don't understand how lobbying works. It's not like the Fortune 500 companies say, "hey, let's tell Congress to lower our rates." Lobbying tends to be highly industry sector driven. A typically lobby would represent trade association of similar companies, like chip manufacturers, petroleum producers, breweries, school teachers, etc.

For things like campaign contributors, the lobbyists are highly focused on where they put their energy.

That said, based on the current corporate tax rates here in the U.S., it appears that lobby efforts in reducing overall tax liability for the entire business community has largely been a failure. Remember that the 35% corporate tax rate is actually higher than that of US individuals.

Except nobody pays 35% and some, as we just learned, pay just 9%. And yes there are lobbists, like Chamber of Commerce that lobby for all businesses at once. Not to mention the likes of Koch brothers etc. who make sure they select a puppet president (Bush) who will lower the taxes for all of them.

 

[carmenodie]

Good for Apple. The more US companies that expose the idiocracy of our tax code the quicker things might change.

The US government has nobody to blame but themselves.

That is t the most bogus BS I have read today. You really think these greedy a$$ corporations, the one that send American jobs overseas to save money, want to expose the idiocy of a lax tax code that saves them BILLIONS?
Get real!!!!

 

[DisMyMac]

It doesn't matter how much revenue comes in when it's all spent on public bureaucracies and paranoid spy agencies.

 

[Rogifan]

Ireland is in a austerity nightmare yet the government still allows billions (possibly trillions) to funnel through it's shores and a huge discount. Even a .5% increase on the current corporate taxes would help out the ROI immensely

It's not just Apple doing it. Google and GE run the same tax structures.

I believe if companies want to utilize the outstanding corporate benefits allowed by the US government there should be an AMT-type of tax for corporations based on global revenue.

Stop putting all the burdens on the citizens and force corporations to a fairer share.

Corporations are people. And people already pay taxes. Income taxes, sales taxes, VAT, etc. I don't want corporations paying more taxes because that means I'll be paying more for goods and services as a consumer.