Tim Cook Calls Apple's Tax Avoidance Accusations 'Total Political Crap'

[alfonsog]

Would you rather earn $1B dollars profit and pay 40% tax or earn $600M and pay 0%? The first way everyone wins and the second way would lead to failure of all economies. Yes, there is waste in all things, but the US government has pretty much guaranteed a nearly general world peace since WW II. Without a doubt we would be on WW V by now and every economy would be in tatters and no company would be making $1B in profit if we hadn't invested in our countries economy and military (through taxation). The tax cuts since 1980 have hurt our infrastructure and education system as we are seeing everyday, but not our military as of yet although eventually the so called rich would probably cut that too if they weren't profiting on it.

The tax on profits controls the greed that every corporation succumbs to. Apple already sits on a huge cash pile, that money isn't being invested in research, factories, jobs, expansion, because it makes more money just sitting there because of tax laws on interest. It's like we need a Buffet Rule type law for corporations as well. And we make the laws for taxes and corporations by electing politicians that are running on nearly unlimited funding from those same corporations on both sides. BTW Bernie Sanders is really the only choice if you don't want someone bought by a billionaire, and his major issue is campaign finance reform so that doesn't happen anymore.

 

[numlock]

It does work like that. It works like that right now. So many corporations leaving the US to avoid taxes.



Totally separate issue, and there are tax laws on the books for this issue, although it is easy to avoid. Like never bring the money back to the US, or just say the hoard of cash is for the purchase of assets.

AET could be reformed to fix this issue. Also, making it more appealing to bring the money home by lowering the corporate tax rate could help this issue.

no it dosent work like that although it is happening (far from the same thing). companies are moving away because countries offer a route that is unsustainable on a large scale. it works great for ireland having loads of companies report all income there but thats about it.

not its very much a connected issue. if you expect taxes to be lowered and place more financial burden on the individuals directly then they need the means to do that and that is where wealth hoarding comes in. hoarding also dosent have to have anything to do with avoiding paying taxes so i have no idea what tax laws you are thinking of.

i dont get this notion of paying taxes having to be appealing. being allowed not pay them should be made particularly unappealing.

but you do realise apple and their tax issues is not just limited to repatriating overseas profit?

 

[tgara]

it dosent work like that. there is no way in competing with a delaware or an ireland or even replicating that on a larger scale especially if you want taxes to provide for something.

the problem becomes even bigger when you realise that wealth is being hoarded and dosent move through the economy.

You don't understand the economics. Lower tax rates bring in more revenue. Higher tax rates bring in less revenue. That sounds counterintuitive, I know, but that's the way it works. The reason the overseas money is being "hoarded" is because the tax of 40% is too high. That high rate is DISINCENTIVE. So the money sits and does nothing, and the government gets nothing. If the tax was lowered to a more reasonable 15% or 20%, then the money would come back, and a piece would be taxed and go into the federal treasury.

So it is very simple. 40% tax rate, money stays put and zero revenue to the US treasury. 20% tax rate, money can move back and the US treasury can get some revenue. Which do you want?

 

[MH01]

The first two paragraphs of your post made the rest of it extraneous. Once again, there is no such thing as immoral legal tax strategy. Regardless of what crazy, screwed up laws the UK has in place. One of the primary jobs of a government is to create rules that are beneficial to your citizenry, be able to enunciate those rules clearly and apply them consistently.

Taxes are a government taking. And tax laws are a contract between the government and its citizens, including corporations. Blaming a corporation (or an individual citizen) for the mess that the government has made of the tax laws in order to continue to keep coming to the trough of its citizenry to fund mis-managed government programs (and yes, this includes military spending) is completely insane. This is why revolutions happen, and it's also why people hate the U.S. Internal Revenue Service.

The hodgepodge mess of rules in place when it comes to paying taxes were not a problem for any government entity (in fact I would say that they relied on their complexity to oppress the common taxpayer) until someone was successful enough at using those complex laws against them to the tune of hundreds of billions of dollars. I, for one an cheering for Apple, or any other US citizen who uses the arcane and ridiculous tax laws of the US to their advantage.

And as far as Jobs is concerned, he had the same attitude that Cook does, and he verbalized it more than once. Including a direct conversation with the President of the United States.

Your last paragraph summarises the situation perfectly . Individuals are forced to pay their taxes and talk to the call centre staff getting no concessions or sympathy , head of Apple talks to the president

Tax avoidance is within the laws but not in the spirit of the law . Any rational person knows when they do something wrong. You can cheat in many aspects in life... You can be a complete ******* in life and abide by the laws.

 

[gnasher729]

I agree. Any good tax consulting will offer its clients any possible tax evasion options. And every business company will use all options, simply because it's legal, and because any business competitor does the the same.

No no no no no. If you are a consultant and tell people about tax evasion and it's found out then you and your client go to jail.

What you mean is tax avoidance. If it's legal it is tax avoidance. If it's illegal it is tax evasion. For example, if there are things that you can deduct from your income tax legally, you deduct it and avoid paying taxes. If you have a choice between doing A and doing B, and doing B saves you money because it allows you to pay less taxes, you do B if you are clever and avoid paying taxes. It's tax avoidance, and it is legal.

 

[Jax44]

You're right, it's not legal in California, just 27 other US states. I imagine Apple has employees in some of those locations. This is of course a derail, but the point is, we judge people and corporations not by what the US Federal Statue says, but according to our moral beliefs. Tim Cook supports taxation and the US government, just not when it applies to his company.

Apple pays billions in US taxes every year, more than any other US company.

 

[tgara]

It does work like that. It works like that right now. So many corporations leaving the US to avoid taxes.

It's not going to be long before Apple buys Blackberry and moves the headquarters from Cupertino to Ontario to avoid the US tax mess.

 

[numlock]

You don't understand the economics. Lower tax rates bring in more revenue. Higher tax rates bring in less revenue. That sounds counterintuitive, I know, but that's the way it works. The reason the overseas money is being "hoarded" is because the tax of 40% is too high. That high rate is DISINCENTIVE. So the money sits and does nothing, and the government gets nothing. If the tax was lowered to a more reasonable 15% or 20%, then the money would come back, and a piece would be taxed and go into the federal treasury.

So it is very simple. 40% tax rate, money stays put and zero revenue to the US treasury. 20% tax rate, money can move back and the US treasury can get some revenue. Which do you want?

actually its far from as simple as that and maybe you should read up on that.

i never mentioned hoarding money to avoid paying taxes.

 

[gnasher729]

I own and run a business.
I pay 43% in tax on all income. 43%. On. Every. Single. Dime.

I doubt it. You are probably confusing income with profits. And you are probably confusing "I" and "the business". _You_ don't pay any taxes, the business does. And if you didn't use any legal trick in the book to reduce the company profits and put the money into your own pocket instead (which you can as the owner), you'd be stupid.

 

[cdmoore74]

I'm going to have to side with Apple, Inc. on this one

Says the guy with multiple Apple products posting on a Apple site.

Over 50% of the people here can't see beyond the Apple logo.

 

[mikecorp]

can somebody record it and share it somewhere

 

[tgara]

actually its far from as simple as that and maybe you should read up on that.

i never mentioned hoarding money to avoid paying taxes.

Actually, it is that simple, and you might look at some history to see what happens when taxes are lowered. You can start with President Kennedy in the 1960s, Reagan in the 1980s and Clinton in the 1990s.

You said hoarding wealth, which is money among other things. Or do you like to play word games?

 

[macfacts]

What tax are they legally required to pay that they're not paying? do you report any deductions on your taxes? If you do does that mean that you are also avoiding paying taxes?

Here is a simplified summary of the scheme. Apple invents stuff in USA and gets a patent for it. Apple sells that patent for $1 to a shell company in Ireland. Apple pays tax on $1 sale in USA. The shell company then licenses the patent for market value (for example $100) to Apple in USA. The shell company pays taxes in Ireland on the money made from licensing the patent (and Apple has tons of patents), so %10 on $100 is $10. So Apple only paid 40cents of taxes in USA and $10 in Ireland. If Apple didn't use the loopholes, they would have had to pay about $40 in taxes.

People keep mentioning taxes on iphones sold in EU are collected in EU. Look at the B.O.M. estimates of how much it costs to make an iPhone. It is peanuts, compared to the cost of the patents used in the iPhone. This is about Apple using shell companies to shuffle ownership of patents around so taxes on it are minimized.

 

[gnasher729]

Let's put it this way:

You're an American citizen who works and lives in another country. You pay income tax to that country because you live there. The US government also wants to tax you on that income because you're an American citizen. That's for real and they try to apply it to corporations in the same situation. You EARNED that income from working in another country and paid their income tax so why is the US trying to tax you again???? It's just wrong.

Well, yes, that's absolutely wrong. The USA are to my knowledge quite unique in that respect.

Thank you. This is my understanding of the compliance rules. Seems many here don't understand thier tax obligations if they work outside of the US.

Many here are not US citizens. And they think that US tax law is absolutely absurd in this respect. For example, in Germany you pay income tax on the income that you make in Germany. That's it. German citizens living elsewhere don't pay taxes in Germany, don't fill out a tax return in Germany, none of that nonsense. You move away, and that's it.

Slavery is immoral. Child labor is immoral. Last time the media checked, Apple (and others, we know) freely use such labor to profiteer from. .

You're talking nonsense here.

There have been cases where companies in China working for Apple employed children under 16. However, they haven't _profiteered_ from it. Employing children under 16 is illegal in China. So the employer has to pay the same wages that they would pay to a legally employed 16 year old. They can (illegally) employ someone underage, but they can't employ them cheaply.

However, if they get caught by Apple, it gets expensive. The companies doing that have to actually send the kids back to school, while paying them their full wages. And several companies lost their contracts with Apple that way.

 

[1458279]

Just to add some perspective on this... A big pharm company was convicted of using paid speeches to doctors in order to get those doctors to prescribe their product. Rich people setup up a foundation to avoid taxes. Most think these rich people are doing something great for people, yet the people get very little benefit from the money, sometimes less than 10% of the money goes to the target people.

This is how the people in Washington work, they don't take bribes, they get insider trading, paid speeches for favors, foundation donations. While the rich setup foundations where they pay themselves tax free.

This shouldn't surprise anyone that's been around for a while, it's common and been around for all of time. They've gone from gangsters with tommy guns offering "protection" to passing laws for cash.

At least Apple is creating a few jobs and opening new business models.

 

[Dionte]

No one in their right mind would bring money they made overseas into the U.S. only to have to pay 40% in taxes.

 

[rdlink]

Your last paragraph summarises the situation perfectly . Individuals are forced to pay their taxes and talk to the call centre staff getting no concessions or sympathy , head of Apple talks to the president

Tax avoidance is within the laws but not in the spirit of the law . Any rational person knows when they do something wrong. You can cheat in many aspects in life... You can be a complete ******* in life and abide by the laws.

For the record, the President came to him, because he wanted to glob onto his celebrity.

Your rationale is insane, quite honestly. You owe no government a moral obligation to pay them more than you're legally bound to do. Apple's "moral obligation" is met when they legally pay their taxes. Frankly, they show good citizenship by publicly telling the government why it is that their laws are counterproductive.

When was the last time you paid the government more than your legally mandated tax burden, "just because it was the right thing to do?"

People who get all up in arms about this lose sight of the fact that it is not about the amount, but the principle. I utilize every advantage I can as written in the tax laws to maximize my tax savings. For me, it generally only saves me hundreds of dollars, not billions. But I do it because I have the resources to know what the laws are, and I utilize them. My resources are that I possess the diligence and cognizance necessary to find the laws that are in my favor, and use them. Just because my next door neighbor might not possess those same resources does not make me less moral.

I believe one of the issues with this debate is a total lack of universal experience. I live in a country that was founded on the principle that government should serve and be accountable to its citizenry. While it is not perfect, and we often do not achieve that goal, the basic tenants of our constitution are that the rule of law governs us. A set of rules were laid out that places our government on the same level of legal footing as its citizens. This means that they are just as prone to bear the brunt of their own stupidity and shortsightedness as any individual. The current US tax code is an example of our government paying the price for their own stupidity and shortsightedness. The beauty of our current situation is that the global economy has placed the government in a rather precarious position, in that they are being forced to compete. If they try to change the laws in order to fit their fiscal gluttony they face the potential of losing prominent corporate citizens.

Many of those in this forum who are chastising Apple for following their country's laws to their advantage live in a monarchy, where for thousands of years a constant line of inbreeds have been exalted as "higher beings" since the days when they were considered near deities. Their view of the world seems to be that the citizenry should serve the government, rather than the other way around.

 

[kazmac]

I'm getting my own little taste of Apple tax avoidance, as they have not refunded the full amount on the returned new iMac. That I had to call them on that when the web order quotes an amount above what has been returned to me is just sad. All I get is an investigation...where's the political crap in that Mr. Cook.

As far as overseas Tax Avoidance, why doesn't that surprise me.

 

[Jax44]

Says the guy with multiple Apple products posting on a Apple site.

Over 50% of the people here can't see beyond the Apple logo.

And the other 50% bash Apple at every turn.

 

[JDee]

It's also a problem created by the EU and Ireland. No matter how Cook wants to spin this, the simple fact is that Apple has a tax haven in Ireland where supposedly its research is performed. Yet, for some reason, features and updates are always introduced in the US first, and the countries of the EU have to wait.

I like Apple in most regards, but in this regard Tim Cook is really trying it on. Is Apple tax haven legal? Yes. Is it immoral? Yes.

And the country in which they have their European headquarters, Ireland, doesn't even have an Apple Store.

 

[El Hikaru]

Money is a greedy magnet. Just like roaches like wet floor, politicians gather to gold storage.

 

[numlock]

Actually, it is that simple, and you might look at some history to see what happens when taxes are lowered. You can start with President Kennedy in the 1960s, Reagan in the 1980s and Clinton in the 1990s.

You said hoarding wealth, which is money among other things. Or do you like to play word games?

why not mention george w bush or even kansas? clinton raised taxes in 93 and in 97 some taxes were lowered. but im not going to debate the intricacy of this issue. it just isnt as simple as lowering and then good things happen. there are a multitude of factors at play.

this is what i literally said i never mentioned hoarding money to avoid paying taxes emphasis on the last 4 words. my initial comment about hoarding had nothing to do with taxes.

 

[gnasher729]

People keep saying "Avoiding" taxes. I think a better term should be "deferring". I also hear the word "Scheme" being thrown around. It's not really as much a scheme as it is a means. A means that is completely legal. They can't be forced to bring the money back and they are choosing not to at this time.

"Avoiding" is absolutely correct. As long as you keep in mind that "avoiding" taxes is the legal thing while "evading" taxes is illegal.

 

[numlock]

What tax are they legally required to pay that they're not paying? do you report any deductions on your taxes? If you do does that mean that you are also avoiding paying taxes?

excellent point. deducting spousal support (as the law intended) is pretty much akin to setting up a multitude of companies in tax havens that have all income flow through them, loan sister companies in higher taxed nations or invoice them for services or patens (as the law didnt foresee).

That's not the job of a CEO of a company. Oh and by the way Tim Cook said he's giving away all his personal fortune (after he pays for his nephew's college education). How much of your fortune are you giving away?


Again, explain what Apple is doing that isn't LEGAL. If the laws are bad blame politicians, not Tim Cook. Do you pay more tax than you legally have to?

in the world you live in is big money not influencing/controlling policy making?

 

[gnasher729]

I have to hand over 40% of my earning over to the UK government.... #justsaying

If you pay 40% of your earnings to the UK government, then I'd love to make as much money as you do (over £350,000 a year).