I'm not going to get into the debate about whether or not Apple or anyone should pay more in taxes. However, to those suggesting the United States would have all problems solved if Apple simply turned over more money to the government...you need to get a better grasp on how big this country's money problems are. There isn't enough money in existence (literally) to correct our problems. You could confiscate every dollar Apple makes and multiply it by ten and still not solve the problem.
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Steve Wozniak Says Apple Should Pay 50% Tax Rate
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Not a 'perfect example', just an example, - possibly the very worst you could find - and one that nobody in their right mind would cite as a recommendation for anything.
Another example - this time of a stable state, one that regularly tops whatever yardstick, or unit of measurement of wealth, stability, education, economic prosperity, accountable government, and so on, you may care to cite - (see UN-HDI, or Transparency International, or Reporters without Borders), would be Sweden - or, - any of the countries of Scandinavia, where the model of high taxation, political stability, economic prosperity, gives a stable society, functioning economy, accountable political system, free press, and what is generally independently accepted as a wealthy country.
We had higher than 50% tax rates in the US before and businesses still flourished. People still made fortunes.
I don't agree that a CORP should be allowed to hide money and pay a lower tax rate. And at the same time enjoy all the benefits in their country that are paid for by taxes of everyone else.
If everyone paid their share rather than avoiding tax, it wouldn't need to be 50%.
Food for thought..
In the United States, there's a tendency to view corporations as being unable to handle even t
Expecting citizens to work for decades with constantly rising productivity and consistently stagnant wages is not fair either, but that's the reality in the United States business world. In the mid 1970s, wages disconnected from productivity and 40+ years later that's still being treated as no big deal by most U.S. corporations. Not exactly a ringing endorsement for how capitalism is currently being operated.
Expecting citizens to work for decades with constantly rising productivity and consistently stagnant wages is not fair either, but that's the reality in the United States business world. In the mid 1970s, wages disconnected from productivity and 40+ years later that's still being treated as no big deal by most U.S. corporations. Not exactly a ringing endorsement for how capitalism is currently being operated.
With due respect to Woz, Apple has a fiduciary responsibility to minimize ANY unnecessary expenses, including taxes. All their tax practices are legal. If some people don't like it, then they need to petition their elected (or otherwise) officials to change the tax laws in their respective countries. It's that simple. Stop vilifying companies for doing what they are supposed to do.
And, 50% is insane. Not sure how Woz is paying a rate that high, unless he lives in CA or NY... In reference to the US only, if we had sane politicians who would lower the marginal corp. tax rate from the insane 39% (3rd highest in the world) to a job-creating, incentive-inducing 15% (or less), then all US companies (not just Apple) would keep and invest their profits here in the country instead of looking for (legal) ways to squirrel the money away overseas.
And, 50% is insane. Not sure how Woz is paying a rate that high, unless he lives in CA or NY... In reference to the US only, if we had sane politicians who would lower the marginal corp. tax rate from the insane 39% (3rd highest in the world) to a job-creating, incentive-inducing 15% (or less), then all US companies (not just Apple) would keep and invest their profits here in the country instead of looking for (legal) ways to squirrel the money away overseas.
Is Woz saying his income tax is >50% or that the total % of taxes he pays (sales, income, FICA, state income, local income, property, etc.) is >50% of his income?
I seriously doubt that his taxes are that high, unless he does it voluntarily (if that's the case that's his choice but there probably are better things he could do with his money). If he's talking about total tax burden then that's possible. However, if so then Apple pays even more taxes than their 36.4% (but that's a worldwide number and not just the U.S.).
In any case, the U.S. has a higher corporate tax rate than most other countries. Once you factor in tax breaks and loopholes (which are legal), the U.S.'s effective corporate tax rate drops to about the middle of the pack for developed nations. There are few people who seriously call for raising the corporate tax rate in the U.S. Generally the call is to lower it (although by how much differs) and close loopholes. A 50% tax rate would not do what Woz thinks it would do. At the least corporate headquarters would flee the U.S. to nations with lower corporate taxes. There are plenty of other countries that would love the corporations to be headquartered there.
U.S. taxes are a mess. The U.S. already has the most progressive taxes in the developed world (this includes those "socialist" countries like Sweden) [yes, I've moved away from corporate taxes now]. How about we fix what we have rather than just raising taxes. It's like Apple - they drive to do more (or the same) with less (push for thinness). I know a lot of people disagree with that but my point is that instead of just throwing more money to the government, how about we make it more efficient first, then we can work on the tax rate?
I seriously doubt that his taxes are that high, unless he does it voluntarily (if that's the case that's his choice but there probably are better things he could do with his money). If he's talking about total tax burden then that's possible. However, if so then Apple pays even more taxes than their 36.4% (but that's a worldwide number and not just the U.S.).
In any case, the U.S. has a higher corporate tax rate than most other countries. Once you factor in tax breaks and loopholes (which are legal), the U.S.'s effective corporate tax rate drops to about the middle of the pack for developed nations. There are few people who seriously call for raising the corporate tax rate in the U.S. Generally the call is to lower it (although by how much differs) and close loopholes. A 50% tax rate would not do what Woz thinks it would do. At the least corporate headquarters would flee the U.S. to nations with lower corporate taxes. There are plenty of other countries that would love the corporations to be headquartered there.
U.S. taxes are a mess. The U.S. already has the most progressive taxes in the developed world (this includes those "socialist" countries like Sweden) [yes, I've moved away from corporate taxes now]. How about we fix what we have rather than just raising taxes. It's like Apple - they drive to do more (or the same) with less (push for thinness). I know a lot of people disagree with that but my point is that instead of just throwing more money to the government, how about we make it more efficient first, then we can work on the tax rate?
The government are so fiscally irresponsible it would t matter if apple gave them all their money.
Unfortunately, the U.S. government won't do that. They'll take it, and repurpose it for kickbacks, etc. I think that's the argument of a lot of people on this thread. They don't disagree about them paying more tax, but how the money will be distributed and controlled.
"Hello, I'm from the government and I'm here to help you..." RIGHT!!!!
Apple have a fiduciary responsibility to their shareholders to minimise tax, yes. But Governments have a responsibility to their citizens to raise monies - often by taxation - to fund public goods and services.
My take is that the public good supersedes the desires of private companies.
However, re the figure of 50%, - a nice and easy figure to remember - (Mr Wozniak didn't say 39%, or 57%, he picked a number that nobody could forget) - my sense is that Steve Wozniak wants to start a debate and discussion on this matter - taxation, responsibility of multi national companies, public policy - in the US, and his contribution - which is inevitably guaranteed to garner headlines - is an excellent way of setting about to achieve this.
Education. Healthcare. Environmental standards and protection. Assistance for seniors, single parents, the mentally ill. Law enforcement. Tax incentives for businesses. Student loan forgiveness. Roads, infrastructure, and clean energy. Mass transit. Scientific research and development. Culture and the arts. Museums. National parks. Etc.
The idea behind tax is that Apple (and any other company or individual) already benefits from those things. Without roads, police, schools, government funded research, etc., Apple wouldn't exist in the United States. Everyone should be paying their fair share, rather than companies like Apple using their enormous wealth to pay for expensive tax avoidance schemes.
Yeah, corporate taxes need to be higher. From what I've read, they used to be higher in the past (starting going down big in the 80s if I remember correctly). While that worked for a time, we're probably a lot worse off for it today. If we could even get halfway back to where we used to be, we'd be doing much better IMO. It just needs to be a slow, steady increase over a number of years so we don't immediately sink our economy. And that's coming from a conservative-leaning moderate guy. Although honestly, with the crap that Trump says, I'm feeling more like a liberal-leaning moderate.
My main problem with the system is how much the same money is taxed. A company is taxed, and then a worker's paycheck is taxed, and then when they buy something they are taxed again, and if that something is considered "property" like a vehicle or home, they're continually taxed each year. And there are many other complications, odd scenarios and additional taxes that I'm sure exist to add to that. Things need to be simpler. I think the reason the tax code is so complex is because they're trying to hide how much money they're actually taking from the average person vs. how little money most businesses actually pay in taxes. It's obfuscation at its finest. Then you have small business owners like my wife who runs a rather small-time, in-home daycare and she's paying more percentage-wise than most large corporations. She doesn't get a tax break even though her work is critical for the continuation of society. She doesn't actually have equal representation because she can't pay someone to lobby for her. When you look at it that way, you begin to see how fundamentally broken our system is. We've been trying trickle-down economics for many years and the positive results just aren't there. As is often said, "The definition of insanity is trying the same thing over and over and expecting a different result." IDK if the number is 50% but even 40% would be a good place to start for crying out loud!
My main problem with the system is how much the same money is taxed. A company is taxed, and then a worker's paycheck is taxed, and then when they buy something they are taxed again, and if that something is considered "property" like a vehicle or home, they're continually taxed each year. And there are many other complications, odd scenarios and additional taxes that I'm sure exist to add to that. Things need to be simpler. I think the reason the tax code is so complex is because they're trying to hide how much money they're actually taking from the average person vs. how little money most businesses actually pay in taxes. It's obfuscation at its finest. Then you have small business owners like my wife who runs a rather small-time, in-home daycare and she's paying more percentage-wise than most large corporations. She doesn't get a tax break even though her work is critical for the continuation of society. She doesn't actually have equal representation because she can't pay someone to lobby for her. When you look at it that way, you begin to see how fundamentally broken our system is. We've been trying trickle-down economics for many years and the positive results just aren't there. As is often said, "The definition of insanity is trying the same thing over and over and expecting a different result." IDK if the number is 50% but even 40% would be a good place to start for crying out loud!
He is counting federal, state and city taxes. Actually all he probably has to do is move out of California. But it will still be close to 40% anywhere in the U.S.
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You get the issue right in that corporations are double tax structure in that the corp is taxed and then when cash is distributed to employees or the shareholders it is taxed again. So actually every dollar of profit that Apple makes in the U.S. is probably taxed more than 50% before it makes it way into the hands of a human. It is taxed first at Apple, then taxed again when Apple sends out a dividend to the shareholders. Better than raising taxes on corporations, we should just tax dividends and capital gains as ordinary income when it makes it to a person. I'd rather we did that and in fact lowered U.S. taxes on corporations.
LOL. Go read how state lottery systems have in fact not helped school funding. Every extra dollar the lotteries bring in just gets removed from the existing educational budgets.
And just what do you think would happen with the extra cash the government would receive if Apple did repatriate its money? I have zero faith that the U.S. government would spend that money wisely. It would all be squandered. Apple wouldn't have it, and the citizens certainly wouldn't see any benefit. Remember how we were promised how revenues from state lottery systems would fix our roads and improve education? Each year the lottery takes in billions, yet our roads are a mess and the educational system is in shambles.
As many others have pointed out, Apple is doing nothing illegal. They're following the letter of the law, albeit a badly-written law that was created to benefit huge corporations and wealthy individuals. Change the law and Apple -- and all the other corporations now benefitting from that law -- will have to comply. Just don't expect the country's problems to suddenly be fixed because of it.
EDIT: LOL! redscull just beat me to the punch.
As many others have pointed out, Apple is doing nothing illegal. They're following the letter of the law, albeit a badly-written law that was created to benefit huge corporations and wealthy individuals. Change the law and Apple -- and all the other corporations now benefitting from that law -- will have to comply. Just don't expect the country's problems to suddenly be fixed because of it.
EDIT: LOL! redscull just beat me to the punch.
Very astute post. I just have one quibble with it. Business very rarely make investment decisions based upon the tax rate. That is something that Republicans and other anti-tax groups make up. Basically you make an investment based on the opportunity for profit. Generally speaking if that profit is taxed at 20%, 30%, or 40%, it is going to be immaterially in comparison to all the other factors involved in the investment decision. The investment decision is based largely on expected costs and expected sales, which produces profits. Taxes are basically only paid on those profits so upon success. Now this might turn a home run investment into a "triple", but taxes aren't going to turn a successful investment into an unsuccessful investment. And largely speaking almost all investors and capital allocation is going to go into an investment which will be taxed if successful. So in deciding between one investment or another taxes don't make a difference. Maybe a few investors are at a point of deciding if they are making further investments or just hanging it up and retiring to spend their wealth. But that is very much at the margin.
Warren Buffet has pointed this out over the years and years of his investments. He pointed out that when asking an investor if they want to do an investment the investor doesn't ask what the tax rate it is, they ask what the chances of success are. If the chances of success are good, then you do the investment. If they aren't, you look for another investment. But you don't just not invest at all unless you have decided you are retired and are just going into spend mode. Even if you don't invest, what you do is store cash in bank or bonds, and that is basically still an investment of some sort and you pay taxes on the interest. But you don't make that decision because you want to avoid taxes, you make that decision because you haven't found an investment you like.
Exactly. The government will continue to spend more and more regardless of tax policy. They have a spending problem, not an income problem.
I wish everyone had to pay their annual tax in one lump sum in April instead of it being spread over each paycheck. Then maybe people will wake up and see how ridiculously high all taxes are.
It's ridiculous that anyone is paying 20% or more in combined taxes. Our government is absolutely raping its citizens. Corporations should pay the same tax rate as individuals to make up the difference. And if they can't, to hell with them – out of control government spending and growth is the problem.
But wouldn't you be better off trying to make the government work better for the people rather than depriving it of the means by which it can help people?
I mean, if you actually think government has a role and wish to see it run efficiently for such roles; I don't see how just depriving it of revenue without any political agitation is going to help.
Almost no corporations pay the same as citizens. That's part of the problem.
Should Apple pay taxes? Sure.
Do I care? Not as much. At least Apple spends a lot of money on helping the environment and also forcing companies to comply with labor laws - even if they are getting cheap labor. Other companies, well..
Personally, I rather have Apple take that extra 10% or whatever more it's supposed to pay in taxes and help the world be a better place. Giving the money to government wont do any good except make politicians wealthier.
Do I care? Not as much. At least Apple spends a lot of money on helping the environment and also forcing companies to comply with labor laws - even if they are getting cheap labor. Other companies, well..
Personally, I rather have Apple take that extra 10% or whatever more it's supposed to pay in taxes and help the world be a better place. Giving the money to government wont do any good except make politicians wealthier.