How Apple Minimizes its Corporate Tax Burden

[3282868]

How does the fact that taxation exists justify the existence of taxation?

What she's saying is that because we have a system in place, we must all obey it. But a thing cannot be its own justification; that's logically wrong.

I understand the arguments for taxation; the benefits it can provide sometimes help people. But morally, it's still wrong. If I steal your wallet and drop it off at an orphanage, it's still theft. This is a black-and-white issue; intentions don't matter.

Lol. So Ms. Warren has no intention of reforming/inspecting the guts of the factory? Isn't that what many conservatives stopped her from doing with financial regulation? In any case it is the deficit we need to pay off (and isn't that what you all are concerned about?) and I see nobody better positioned to pay off this debt than top 1% who disproportionately gained the most while running up these debts. See? It's easy....no factory guts just debt payments.

when the top 1% own nearly HALF the wealth they may have to pay more. See how that works? Should I also cite the stats about how much the top 1% have gained over the last 30 years?

The top quintile is generating the "lion's share" of tax revenue yet they are generating such a share because of their disproportionate income. The capacity to generate an unprecedented share of tax revenue is evidence of the inequality that progressives fight, not cause for rethinking the progressive case.

I think there are very few entrepreneurs who don't want to pay it forward.

I think there are many American citizens who don't want to pay taxes because we don't feel as though we have any say in how the money is spent. The funny thing is that we don't even have any way of knowing whether our opinions, positions, preferences are even shared, let alone considered.

Lately, I feel more like an employee of an enormous corporation than a responsible citizen with a voice. I don't like what I hear about what my country is doing (or not doing), I don't like that my income is the same as it was ten years ago when everything costs more than it did ten years ago, and I don't like that my rising property taxes don't seem to pay for the schools my children attend -- i.e., there are fundraisers every week.
I don't know what happened, and most days I don't even care what happened. All I know is that it's screwed up and that I don't have time to get involved because I have to work extra hours to make sure that I keep my job.

It's a stupid comment, made by a clueless professor at Harvard. That's a fact you can't ignore.

And where did you get your degree from? Exactly what is "stupid" about her point? Due tell, I'm waiting with bated breath.

 

[jlasoon]

This logic is false. It violates supply and demand. Goods are priced to maximize profits. If you can't sell more, you eat the loss. Its only passed to the consumer when you can afford to do so. If you can't afford to do so and you can't eat the loss-and this is important-the production shuts down, which is the worst world for everyone.

I wish this stupid myth would stop being said. Businesses can't pass everything to consumers. You're thinking in times of economic expansion, not depression.

Do you own a business?

 

[slrandall]

Completely wrong.

Great sources. Here's more proof for my statement:

- Legal definition: http://www.law.cornell.edu/uscode/text/26/63
- In case you were confused, the difference between gross revenue and gross profit: http://en.wikipedia.org/wiki/Gross_profit

EDIT: ... I just got down-voted for providing clear, factual evidence in a discussion. Time to go.

 

[RedCroissant]

They didn't ask for proof (which would probably be illegal to provide), only for a source. Honestly I've never seen people so eager to place the idea next to space aliens and 9/11 conspiracies... so determined to make sure the idea isn't discussed...

I wonder why.

It's not because people place it next to space aliens and 9/11 conspiracies, it's because the idea of a CIA installed puppet government is not news and is not new. Yes, it sucks if that's the case, but you can historically track the US Government involvement in different regimes that provide the US with cheap fossil fuels or other items we desire. Iran, Iraq, Venezuala(maybe), Saudi Arabia, Kuwait, possibly Israel, Ghana, Uganda, and other organizations now considered to be "terrorists."

So I don't think people don't want it discussed, I think it's just due to the fact that history repeats itself and so does government policy.

 

[shamurai]

Supply side economics says that it will force the corporation to become more efficient, which will lead to an increase in profit and a decrease in cost and thus
benefit both the corporation and the consumer.

Agreed! In this case they are doing it by lowering their taxes. Which gives them more money for R&D, and hire more workers, or build new data centers that provide new services like iCloud.
Since when is being successful Evil? The truly evil are those who mooch off society, and the politicians that buy their vote by giving out free stuff.

 

[Pyrrhic Victory]

The U.S. should LOWER corporate taxes, that way companies like Apple would route more of their money to the U.S. instead of overseas and the U.S. would earn more revenue than it does now.

 

[jlasoon]

Can someone please explain to me how stealing 's $110B solves over $100T in unfounded liabilities?

 

[klrobinson999]

Just because it's legal doesn't make it right. And just because every corporation does it doesn't ethically excuse anyone.

 

[bobob]

Blaming a company for taking advantage of legal tax loopholes is like blaming water for finding leaks in a boat.

Excellent!!!


(Is that original?)

 

[slrandall]

Lol. So Ms. Warren has no intention of reforming/inspecting the guts of the factory? Isn't that what many conservatives stopped her from doing with financial regulation? In any case it is the deficit we need to pay off (and isn't that what you all are concerned about?) and I see nobody better positioned to pay off this debt than top 1% who disproportionately gained the most while running up these debts. See? It's easy....no factory guts just debt payments.

Why is it up to them to pay off the debt? Why not stop spending so much? The debt grows every year; is that indicative of a larger problem?

when the top 1% own nearly HALF the wealth they may have to pay more. See how that works? Should I also cite the stats about how much the top 1% have gained over the last 30 years?

No, they don't. The problem that you're missing is the government. There is obviously a huge income disparity. But it's existence is not inherently bad; if it arose on a fair playing field, then that's fine.

However, it didn't. The problem is that large corporations are "in bed" with the government. If you start to tax corporations more, then you're just giving more money and power to the government to continue to slant the playing field however they choose. Which so far, has been in favor of the corporations.

The top quintile is generating the "lion's share" of tax revenue yet they are generating such a share because of their disproportionate income. The capacity to generate an unprecedented share of tax revenue is evidence of the inequality that progressives fight, not cause for rethinking the progressive case.

I don't care much for the GOP/Dem dichotomy; if you have a set of principles you'd like to discuss, then state them clearly. I don't know nor do I care what the "progressive" or "conservative" causes are.

I think there are very few entrepreneurs who don't want to pay it forward.

I think there are many American citizens who don't want to pay taxes because we don't feel as though we have any say in how the money is spent. The funny thing is that we don't even have any way of knowing whether our opinions, positions, preferences are even shared, let alone considered.

Lately, I feel more like an employee of an enormous corporation than a responsible citizen with a voice. I don't like what I hear about what my country is doing (or not doing), I don't like that my income is the same as it was ten years ago when everything costs more than it did ten years ago, and I don't like that my rising property taxes don't seem to pay for the schools my children attend -- i.e., there are fundraisers every week.
I don't know what happened, and most days I don't even care what happened. All I know is that it's screwed up and that I don't have time to get involved because I have to work extra hours to make sure that I keep my job.

Here you begin to see the problem of letting the government spend your money. If you - like all the entrepreneurs you mentioned - see a cause that you find worthy, why not just fund it yourselves? You can do it without the government; the government is funded by your money anyways!

 

[Apple Knowledge Navigator]

Have to back up what others have said - this isn't an illegal process, but it does leave a bad taste in the mouth when one considers just how much money such companies have in their 'kitty'.

But again, it's only human nature to find making money desirable in whatever way is legal and indeed possible. The only reason Apple are singled out for cases such is this is because it goes against their holier than thou guise in which they love all their customers, the environment, and making life 'awesome'. All U.K residents like myself are aware of just how many companies have swamped Ireland for, cough, tax loopholes (Amazon are a big player in this), yet you can't blame the land owners for giving up this space when it creates jobs.

The fact remains however that an example simply has to be set in the future, because although these cases are legal, they are morally questionable when stacked against the running of small businesses. The problem all the time is that no-one is brave enough to do something about it, because the whole system is corrupt.

Come to think of it, most world order is corrupt. Now that's a worrying thought...

 

[shamurai]

'Tax avoidance' is the legal avoidance of paying tax, 'tax evasion' is the illegal avoidance of paying taxes. Again, my argument is that legal avoidance is immoral, since it relies on armies of accountants and lawyers figuring out how to scam legally. Since the poor (and indeed much of the middle class) cannot afford this kind of legal help, they wind up with a disproportionate burden.

The poor can afford tax help?
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Indeed, people on welfare cost us money!. Shock! Horror! Indeed, I have no doubt we will soon see political advertisements that tell us just much those people cost. Just like they did in the Third Reich.

Im not against providing for the NEEDY but far to many abuse the system and sit at home and do drugs. When they try and fix THAT by requiring drug test the NAACP cries foul. Don't be a ******* and run around with your heart on your sleeve.

 

[3282868]

The problem that you're missing is the government. There is obviously a huge income disparity. But it's existence is not inherently bad; if it arose on a fair playing field, then that's fine.

However, it didn't. The problem is that large corporations are "in bed" with the government. If you start to tax corporations more, then you're just giving more money and power to the government to continue to slant the playing field however they choose. Which so far, has been in favor of the corporations.

I agree 100%. The comment stops where the money goes. We need to examine what our government is doing with our money. However, that doesn't negate the point Warren makes. If we, as citizens, regardless of pigeonholing us into "liberal" and "conservative", worked together we could make change. I hate names too, forgive me, they only create tension between us by assuming we stand for things we do not. I am fiscally conservative, I come from a wealthy family, I know many who are wealthy, trickle down economics does not work and many have the money to circumvent the laws put into place. "Money makes money", it's an unbalanced system. However, we need to hold our government accountable (and that's a different matter of foreign policy, arms trading, lobbyists, corruption), and ensure our taxes do go to bettering our education system and over well being of our nation. If we look out for each other, not through welfare, but through improving our education system with better funding which benefits each of us by producing a strong, global workforce, we would be better off. I believe tax incentives for U.S. businesses to bring work into our nation would be great, but then it may impact the costs of goods produced in China (which may change based on current regulation).

In the end, I am fiscally conservative and socially liberal, yet I do not like corporations taking advantage of loopholes. Sure, it may be legal and unethical, but it would be nice for a multi-billion dollar company to do something right for a change. Yes, I'm a dreamer, but I'd rather be a dreamer than a cynic

 

[*LTD*]

Overall, Apple paid $3.3 billion in corporate taxes in 2011 on earnings of $34.2 billion in profits, an effective tax rate of 9.8%, which is considered low by corporate standards. But with the company's tactics relying on a complex and disjointed system of tax laws throughout the world, it is difficult for the United States to single-handedly require Apple to book more of its revenue in its home country, which currently has the highest corporate tax rates in the world when federal and average state rates are included.

Seems the only thing Apple is guilty of is being smart.

 

[cadillac1234]

Agreed! In this case they are doing it by lowering their taxes. Which gives them more money for R&D, and hire more workers, or build new data centers that provide new services like iCloud.
Since when is being successful Evil? The truly evil are those who mooch off society, and the politicians that buy their vote by giving out free stuff.

So continuing the circular logic, a 90% tax imposition on Apple would result in even more exciting innovations since they would really be forced to become more efficient and innovative.

Supply side economics FTW

 

[tigress666]

Why?

If store A sells you a product for $20 and store B sells you the same product for $5, you would buy it from store B, right? You don't feel bad about taking business away from store A, you don't feel like you're doing wrong, you just evaluate the options and take the cheapest route. Perhaps to get the cheaper price from store B you need to set up a membership account or jump through a few hoops, but you'd do it if it saved you enough money.

Bad analogy. Store A isn't where you live and doesn't provide you services regardless of if you decide to shop at Store B and doesn't help keep the infrastructure you depend on in good shape as well as a protection force to keep you and your property safe from other stores/thieves/whatnot.

 

[shamurai]

So continuing the circular logic, a 90% tax imposition on Apple would result in even more exciting innovations since they would really be forced to become more efficient and innovative.

Supply side economics FTW

Assuming they could make iPads out of thin air. I think you didn't pay much attention in economics class.

A 90% tax would remove all incentive why work and get your money taken? Sounds a lot like slavery by the way.

 

[cadillac1234]

Can someone please explain to me how stealing 's $110B solves over $100T in unfounded liabilities?

It doesn't but when Google, GE, Exxon and hundreds of more companies do the same thing it ads up.

This is not a new thing and its an issue with the tax codes. Problem is the issue is more of a feature than a bug for corporations.

 

[Rogifan]

I wonder what Apple's market cap and profit would have to come down to for the NY Times et al to consider their work done? It's no coincidence this story comes out the weekend after Apple had a record quarter.

 

[reedmartin]

Why are people discussing ethics in this thread? Always easy to spot the ones who don't own their own businesses!

 

[cadillac1234]

Assuming they could make iPads out of thin air. I think you didn't pay much attention in economics class.

A 90% tax would remove all incentive why work and get your money taken? Sounds a lot like slavery by the way.

Funny how my circular logic scenario disproving supply side economics is considered laughable but yours wasn't. They are both extrapolating conclusions that are not provable.

BTW...I was not purposefully attacking your argument, just the stupid circular logic, supply side memes that constantly get thrown out as gospels.

----------

Why are people discussing ethics in this thread? Always easy to spot the ones who don't own their own businesses!

yes...because anyone arguing the pros v cons have multi-national corporations that use off-shore tax avoidance schemes.

Glad you could stop by and offer some input Mr Gates

 

[JAT]

Great sources. Here's more proof for my statement:

- Legal definition: http://www.law.cornell.edu/uscode/text/26/63
- In case you were confused, the difference between gross revenue and gross profit: http://en.wikipedia.org/wiki/Gross_profit

EDIT: ... I just got down-voted for providing clear, factual evidence in a discussion. Time to go.

I have a degree in accounting and am damn good at it. I don't have to look those terms up to know what they mean. (not to mention individual AGI is not the same as corporate, completely different tax structures)

And defining either of them has nothing to do with your incorrect statement that revenues, not profit, are taxed. BTW, operating profit, not gross, is taxed. It's called EBITDA in many cases, why don't you look that one up.

 

[tigress666]

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.

Do people who think like this think that even if there is a chance for anyone to become rich, that everyone can get rich?

Yeah, keep letting them fool you into complacence believing that you will be that lucky one that manages to make it amongst the many that don't and anyone who doesn't just must not have tried hard enough. Trust me, the ones wanting to abuse the system at the expense of the middle class and lower class want you believing in that half truth. Yeah, it's possible for anyone to get rich. But that doesn't mean everyone who tries hard and does all the right things and is smart will make it or even most... very few will. But, you know, there's that possibility. So let us keep cheating the tax code and making your life more miserable cause maybe, just maybe you'll be one of those lucky few who reach our ranks (But most likely you won't, but don't think about that).

Just because there is the possibility doesn't mean that everyone even if they try hard and do all the right things will make it. There still is luck and right timing (or rather luck) that comes into it. As well as having the opportunity (when you are spending so much time trying to make sure ends meet you really have the time to advance yourself. Especially when they make it harder because that would mean they might have to pay more taxes).

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I agree with your points overall, but this one comment is a fallacy. If you are truly making barely 5 figures, you will have zero income tax in the USA.

I make 15k a year. I still pay some taxes, that is complete BS.

Secondly, I got most of my taxes back this year.. you know what? I've been eating into my savings. That tax I got back helped me not eat into my savings for this month and this month alone. So I still pay taxes even though I'm not even breaking even. AT the point you don't pay taxes, you are really damned dirt poor and way more than can't afford to pay taxes.

 

[azentropy]

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

If only there was a way for the people to somehow choose who is in Congress... oh wait...

 

[KPOM]

Perfectly legal, but this is the kind of behaviour that should get alot of attention in order to bring badwill to the companies doing it.

Our tax rates in the US are higher than most other countries. I don't blame companies for trying to minimize their tax bills. Ultimately, corporate taxes get passed along to people, either in higher prices, lower wages, or lower returns on investment.