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

[dk001]

It's also not the job of the CEO of a company to engage in public charity (such as the Red stuff), to speak out in favor of gay rights, or do many of the other moral things for which Cook deservedly is praised. He does all sorts of things that mix the personal and corporate, and this is one of them. A robot CEO would just quietly do the tax avoidance; Cook the person is the one who spoke it in favor of it and called his critics "politicized." He invited a moral discussion of the issue, and we are responding.

...

One aspect of the changing digital landscape is "social". More and more corporations are finding this out and engaging in "social" events and discussions. That said I am not sure if Tim is ahead of the times or just on a slightly divergent path. Still, not a bad thing.

I totally agree. They are not breaking any laws, as far as I know.

There are two issues at hand here. Is Apple telling the truth, and is it wrong for them. The first part, Apple is totally lying when they say they are in Ireland for anything other than a tax haven. Second, there is nothing wrong with it. That's what corporations do every day. I don't fault them for taking advantage of the rules.

All Tim has to say is that we are doing nothing different than many other corporations. And it's a non-story for me. But to say you really care about Ireland, and that of all the places in the world, that's your European hub...

Now that is just lame.
Big business, special interest, and the politicians themselves have guided this mess and take full advantage of it. So if I draft a law that favors me, push that law to be passed, then take advantage of that law, even if it is immoral , that is fine by you.
Wow.

 

[Eraserhead]

Wow! What a load of BS. Your argument that avoiding excessive taxes somehow makes someone's efforts to help better social issues is a typical liberal non-sequitur. Like somehow the government is going to suddenly start using money wisely to fix issues it hasn't fixed in over 50 years using more and more of its citizenry's money. The government "initiatives" you speak of to support issues such as "injustice and social issues" have been in place for decades, and in most cases the government's involvement has made the issues worse than they are now.

You come from the very naive place of believing that those taxes are actually being put to good use. Let me clue you in: They're not.

As far as my "local facilities" and "state of the roads" I have no major complaints. If the money were spent on that, and police, fire and garbage it would be fine. But I also know that a large percentage of my tax dollars are spent by government bureaucrats who have no clue how to use the money efficiently.

I understand the benefits of taxation, when managed correctly. And I have no problem with paying my fair share. But the fact is that over 40% of my annual income goes toward taxes in some form or another. We're talking about an amount in excess of $50,000 annually.

And the IRS, Congress and the Administrations of various president have, through political cronyism, power hungry greed and ineptitude developed a completely perverted system over the decades, in which the only way to protect yourself from never ending and ever increasing government taking is to familiarize yourself with their absurd and twisted set of rules, use them to protect yourself when possible.

And your casting some sort of moral judgment on my using my own intelligence and diligence to legally maximize my return on my money is ridiculous, if not infuriating. Do you feel the same liberal guilt about your having educated yourself and worked hard to make your lot in life better than your neighbor's, so that you can have a bigger house or better car?

If governments, all governments would be willing to toss out the giant perverted mess that our "progressive" taxing systems have become, and tax everyone at a flat rate no matter how much money they make I would gladly write my check and "do my part." But that will never happen, because there is no political motivation to do so. So until then I will use the laws as they're written to protect my interests. If you choose not to do that out of some sense of obligation to your masters, be my guest.

I'll give you credit, though. At least you're not hiding your true beliefs. At least you're clear that you are a complete, unapologetic socialist, and you're not hiding behind the cloak of lies that most socialists hypocritically put in front of themselves. There's no doubt where you stand. You would just as soon the government get to tell me what and how much I need to live on, and take the rest. "Damn the rule of law. I decree you have too much money, and you need to be more generous to those around you. So I declare you a cheat and will fine you."

Source for your positions.

 

[VulchR]

LOL. What's immoral is taking 40% of something someone else has earned to pass around to those who haven't contributed anything at all.

I take it then, you dislike the whole of the banking/financial sector, who produce sod all. if so, then I share your concern.

Business tax is not about stealing. it is about recognising that the functions of business require a social infrastructure that must be funded for the common good based on the resources of individuals and companies in a given society. I object to Apple's approach because it smacks of the trend for the rich to use up the wealth of a given area (for instancing by lobbying/bribing politicians to reduce corporate tax) and then shift the accrued resources elsewhere once the infrastructure begins to crumble from lack of investment. So, if you want to applaud Apple for being tax-savvy be my guest, but I will not. I see this as a self-defeating short-term strategy that starves the US and the EU of much needed investment in infrastructure, and I happen to care deeply about both the US and the EU.

 

[AFEPPL]

I'm surprised people are actually defending tax avoidance in any form with the exception of keeping money outside the US.
Apple are actively avoiding paying billions in taxes for their local markets. That money should be getting paid to the governments of those countries where the products were locally purchased.

 

[MH01]

Wow! What a load of BS. Your argument that avoiding excessive taxes somehow makes someone's efforts to help better social issues is a typical liberal non-sequitur. Like somehow the government is going to suddenly start using money wisely to fix issues it hasn't fixed in over 50 years using more and more of its citizenry's money. The government "initiatives" you speak of to support issues such as "injustice and social issues" have been in place for decades, and in most cases the government's involvement has made the issues worse than they are now.

You come from the very naive place of believing that those taxes are actually being put to good use. Let me clue you in: They're not.

As far as my "local facilities" and "state of the roads" I have no major complaints. If the money were spent on that, and police, fire and garbage it would be fine. But I also know that a large percentage of my tax dollars are spent by government bureaucrats who have no clue how to use the money efficiently.

I understand the benefits of taxation, when managed correctly. And I have no problem with paying my fair share. But the fact is that over 40% of my annual income goes toward taxes in some form or another. We're talking about an amount in excess of $50,000 annually.

And the IRS, Congress and the Administrations of various president have, through political cronyism, power hungry greed and ineptitude developed a completely perverted system over the decades, in which the only way to protect yourself from never ending and ever increasing government taking is to familiarize yourself with their absurd and twisted set of rules, use them to protect yourself when possible.

And your casting some sort of moral judgment on my using my own intelligence and diligence to legally maximize my return on my money is ridiculous, if not infuriating. Do you feel the same liberal guilt about your having educated yourself and worked hard to make your lot in life better than your neighbor's, so that you can have a bigger house or better car?

If governments, all governments would be willing to toss out the giant perverted mess that our "progressive" taxing systems have become, and tax everyone at a flat rate no matter how much money they make I would gladly write my check and "do my part." But that will never happen, because there is no political motivation to do so. So until then I will use the laws as they're written to protect my interests. If you choose not to do that out of some sense of obligation to your masters, be my guest.

I'll give you credit, though. At least you're not hiding your true beliefs. At least you're clear that you are a complete, unapologetic socialist, and you're not hiding behind the cloak of lies that most socialists hypocritically put in front of themselves. There's no doubt where you stand. You would just as soon the government get to tell me what and how much I need to live on, and take the rest. "Damn the rule of law. I decree you have too much money, and you need to be more generous to those around you. So I declare you a cheat and will fine you."

I'm not a socialist, what a silly conclusion to come to. If I avoid my taxes I'm not a hypocrite of my actions. Now you understand ?

 

[furi0usbee]

We need a poll here. Forget legality. Simple question.

Q: The SOLE reason Apple is in Ireland is to avoid paying higher taxes elsewhere?

A:

YES - 100%
NO - 0%

Anyone who says NO is a fanboi of immense proportions that I can't even comprehend such proportions. This thread didn't need 21 pages to figure this out.

Apple HATES to pay taxes like everyone else. Only difference, we say we hate to pay taxes, Tim Cook lies about it. Any questions?

 

[bladerunner2000]

So many Apple fanboy apologists in this thread, it's disgusting.

 

[MH01]

I'm not a socialist, what a silly conclusion to come to. If I avoid my taxes I'm not a hypocrite of my actions. Now you understand ?

You clearly don't understand what socialism is. One can come from a capitalist society and understand what thier taxes fund.

 

[MH01]

We need a poll here. Forget legality. Simple question.

Q: The SOLE reason Apple is in Ireland is to avoid paying higher taxes elsewhere?

A:

YES - 100%
NO - 0%

Anyone who says NO is a fanboi of immense proportions that I can't even comprehend such proportions. This thread didn't need 21 pages to figure this out.

Apple HATES to pay taxes like everyone else. Only difference, we say we hate to pay taxes, Tim Cook lies about it. Any questions?

That's the executive summary of 500 or so posts.

Your last paragraph is spot On. I hate to pay my taxes, and when I avoid them, I don't lie about it.

 

[Hustler1337]

I think many people are getting confused between tax avoidance and tax evasion. The distinction is very important. The former is perfectly legal and most businesses and individuals exercise tax avoidance by various means - it's a method of arranging your financial affairs so as to minimise the amount of taxes you pay. They are in compliance with the letter of the law and are not, from a legal perspective, breaking any laws.

The latter (tax evasion) is NOT legal as you are legal required to pay tax on a sum that is liable to taxation. This is not what Apple is doing.

The real question that, although Apple are avoiding paying tax by their financial and legal arrangements, is it morally wrong that they are avoiding paying taxes by their practices on a large sum of money?

I think the answer to that is, yes.

 

[jetlife2]

Actually you are wrong about people being double taxes by working overseas. The way it actually works is you pay tax in the country in which you are working and you also file a US tax return and claim credit for the tax you pay in the overseas location. Net effect is that you are paying US taxes.

The first part you are correct, but the net effect is that you pay the higher of the two. The US will either collect the difference if the local tax were lower, or if the local tax you already paid was higher, you owe nothing additional to the US. So the net effect is paying whichever is higher.

 

[nt5672]

. . . . I would object less to this tax-avoidance scam if the 'research' in Ireland actually produced better Apple hardware and software. . . .

If they are getting away with something it IS because the President, IRS, and the Attorney General let them. The laws are very specific about what qualifies as foreign research. Apple cannot just say, "oh we do that in Ireland" and make the tax go away.

There is no scam. They are too big, to be able to just avoid the law. Now they might be paying the President, IRS, and Attorney General to let them get away with it, but that is not Apple's problem that is a failure in the government. There is too much money at stake, for this to be ignored by accident by either Apple or the government.

 

[lkrupp]

I think many people are getting confused between tax avoidance and tax evasion. The distinction is very important. The former is perfectly legal and most businesses and individuals exercise tax avoidance by various means - it's a method of arranging your financial affairs so as to minimise the amount of taxes you pay. They are in compliance with the letter of the law and are not, from a legal perspective, breaking any laws.

The latter (tax evasion) is NOT legal as you are legal required to pay tax on a sum that is liable to taxation. This is not what Apple is doing.

The real question that, although Apple are avoiding paying tax by their financial and legal arrangements, is it morally wrong that they are avoiding paying taxes by their practices on a large sum of money?

I think the answer to that is, yes.

Then anyone who legally avoids taxes by taking legal deductions, putting money in a tax deferred IRA, a Roth IRA, an annuity, is also morally wrong by your definition? Oh, I see, it’s only evil corporations and the wealthy who are morally wrong by legally avoiding taxes. Apple should be happy to pay that 40% to help fund a corrupt government so it can redistribute that 40% to its cronies and political allies (because the truly needy won’t get a dime of it). And so it goes in the cockeyed universe of Socialism.

 

[dk001]

They do follow every tax law. Please explain in detail, and cite the relevant statutes, where you believe they don't.

No they don't. Let me fix that for you.
Every applicable tax law that they (Apple) feel applies and can leverage to pay the least amount possible without having the IRS and other agencies come down on them.

How do you define or determine what is expected? Expected means what? It seems to me you think what Apple is doing should be illegal. If that's the case your beef should be with politicians not Apple. Apple's responsibility is to its shareholders not public governments.

The politicians did not do this all by themselves. As they are elected (usually) and require donated funds for thier campaigns, I suspect Corporations and Special Interest had a significant amount to do with it.

 

[Popeye206]

So many Apple fanboy apologists in this thread, it's disgusting.

???? What is there to apologize for? Seems to me a bunch of uninformed people spouting off about rich Apple cheating the government when they obviously have no idea how international companies run. It's disgusting that our educational system does not teach more basic business skills.

You do realize that Apple is only part of this discussion because they have so much cash - more than most companies make in their entire existence.... but that's the only reason Apple is singled out on this issue because every international company I know of does similar things to help protect their revenue from unecessary taxation.

 

[bingeciren]

And, I'm good with that. I completely disagree with the "Friedman doctrine" that corporations should be psychopathic.



Agreed. I think it is fine to discuss it, and, it would be inconsistent of Cook to state otherwise. (I haven't parsed his words carefully enough to understand exactly how he meant his criticism.)



That is what I do, too. I don't pay more taxes than I owe. I give money to certain charities-- in that sense, I choose what my extra "taxes" are going to.



Some people would be surprised that about 60% of federal discretionary spending goes to national defense/military.

(Military+veterans benefits). I'm not saying at the moment whether that is good or bad, but, people who complain about taxes and demand more military spending are-- well, boring.

Thank you for saying "The King is naked". So many Americans are clueless about where their tax dollars go, otherwise they wouldn't naively mention things like taxes are needed to repair bridges and roads or cut down the unemployment. Also many of them think that it is perfectly okay to spend an exorbitant amount of money for the military, because they believe that US has the right to self appoint itself as the world police! 60% of Apples 40% income would be used to mess with the Middle East even more.

 

[Rogifan]

So, blame the teacher if students are cheating? Blame the refs if a football team does something behind the scenes? Got it.

If the government closed loopholes, you'd see the right rioting about "punishing success".

That being said, I can agree that 35-40% is too high for corporate tax, but I'm flabbergasted at how many people, who portray themselves as brilliant economic masters, don't understand that these companies do not get double-taxed fully by both countries. Just as state taxes I pay to another state get deducted from my home state taxes.

To me cheating is equal to doing something illegal. Where is Apple cheating? If you don't like loopholes then pressure your government to close them. If it was up to me United States would have a flat tax with no deductions for individuals and no corporate income tax. Of course that will never fly because individuals won't give up mortgage deductions, charitable deductions, medical deduction, etc. Somehow those are perfectly fine to reduce a person's tax burden but companies using legal means to pay the smallest tax possible is wrong. That's nonsense. It's also Ron that because Apple's profits are the highest they should pay more tax. Does Apple as a company consume more, use more resources than than a company with smaller profits. No. Same with individuals. When you go buy a car do they charge you more based on your income. No. So why should your tax burden be tied to your income. A CEO that makes $1M a year isn't using more government resources or public services than someone making $30K. Why should they pay more in taxes. The progressive tax system is evil IMO.

I think many people are getting confused between tax avoidance and tax evasion. The distinction is very important. The former is perfectly legal and most businesses and individuals exercise tax avoidance by various means - it's a method of arranging your financial affairs so as to minimise the amount of taxes you pay. They are in compliance with the letter of the law and are not, from a legal perspective, breaking any laws.

The latter (tax evasion) is NOT legal as you are legal required to pay tax on a sum that is liable to taxation. This is not what Apple is doing.

The real question that, although Apple are avoiding paying tax by their financial and legal arrangements, is it morally wrong that they are avoiding paying taxes by their practices on a large sum of money?

I think the answer to that is, yes.

Wether Apple is morally wrong or not is completely subjective. Personally I think corporate taxes are immoral so of course I have no problem with Apple doing whatever within the laws to minimize its tax burden.

 

[dk001]

To me cheating is equal to doing something illegal. .... The progressive tax system is evil IMO.

Would love to see a flat no deduction tax. That would really help things.
Well, except for the sudden increase in unemployment for that business sector.

 

[vladi]

All the income from iTunes purchases goes to iTunes S.à r.l. company based in Luxembourg.

There are two companies in Ireland Apple Operations International and Apple Sales International. One profits from all the patents created in California, USA. Both companies are partly owned by Baldwin Holdings Unlimited at Virgin Islands and most of the money flows from Ireland to VI.

iTunes S.a r.l and Baldwin Holdings Unlimited don't even have proper office or a telephone number.

Tax avoidance has been deeply seeded into Apple culture since their very begging and today is no different.

Whats funny is that people try to defend that and demand US to lower the tax so money can be brought into US soil like they have already paid the tax on that money which of course they did not. Every US citizen that makes more than $80,000 outside of the US needs to pay taxes on that money to US. There is no way around it otherwise its a felony. But for corporations its a lot easier to create new corporations around the world to act like separate entities while humans unfortunately cannot do that. I cant work in Germany and claim all the profits to my brother in Ireland even if I send him the money through some BS invoice he has issued.

 

[vladi]

To me cheating is equal to doing something illegal. Where is Apple cheating? If you don't like loopholes then pressure your government to close them. If it was up to me United States would have a flat tax with no deductions for individuals and no corporate income tax. Of course that will never fly because individuals won't give up mortgage deductions, charitable deductions, medical deduction, etc. Somehow those are perfectly fine to reduce a person's tax burden but companies using legal means to pay the smallest tax possible is wrong. That's nonsense. It's also Ron that because Apple's profits are the highest they should pay more tax. Does Apple as a company consume more, use more resources than than a company with smaller profits. No. Same with individuals. When you go buy a car do they charge you more based on your income. No. So why should your tax burden be tied to your income. A CEO that makes $1M a year isn't using more government resources or public services than someone making $30K. Why should they pay more in taxes. The progressive tax system is evil IMO.

Wow! Not sure if you are trolling or you are being serious here. Would like to get into a great exchange with you.

 

[Popeye206]

All the income from iTunes purchases goes to iTunes S.à r.l. company based in Luxembourg.

There are two companies in Ireland Apple Operations International and Apple Sales International. One profits from all the patents created in California, USA. Both companies are partly owned by Baldwin Holdings Unlimited at Virgin Islands and most of the money flows from Ireland to VI.

iTunes S.a r.l and Baldwin Holdings Unlimited don't even have proper office or a telephone number.

Tax avoidance has been deeply seeded into Apple culture since their very begging and today is no different.

Whats funny is that people try to defend that and demand US to lower the tax so money can be brought into US soil like they have already paid the tax on that money which of course they did not. Every US citizen that makes more than $80,000 outside of the US needs to pay taxes on that money to US. There is no way around it otherwise its a felony. But for corporations its a lot easier to create new corporations around the world to act like separate entities while humans unfortunately cannot do that. I cant work in Germany and claim all the profits to my brother in Ireland even if I send him the money through some BS invoice he has issued.

First of all... what Apple is doing with iTunes S.a.r.l and Baldwin is legal and common practice. So why is that an issue? Sorry to break your bubble but many companies do this. It is legal you know?

The other thing about the 40%... you don't feel that's too high to bring in revenue from out of the country? No one is saying that Apple shouldn't pay something, but 40% seems excessive... and... if they are bringing it back to invest in US based offices, employees or other employment generating activities... it might be okay for them to bring it in Tax free in my opinion.

People can go on and on about all the legal things Apple is doing to avoid corporate revenue tax, but Apple and their employees generate more tax revenue than most companies even make it top line revenue.

 

[Dmunjal]

Bernie would get rid of this loophole. Doubt that it would get through the Republican Congress.

http://www.americansfortaxfairness..../fact-sheet-offshore-corporate-tax-loopholes/

 

[MacHiavelli]

So, what's Tim suffering with? Hope he gets better soon.

 

[Eraserhead]

Then anyone who legally avoids taxes by taking legal deductions, putting money in a tax deferred IRA, a Roth IRA, an annuity, is also morally wrong by your definition? Oh, I see, it’s only evil corporations and the wealthy who are morally wrong by legally avoiding taxes. Apple should be happy to pay that 40% to help fund a corrupt government so it can redistribute that 40% to its cronies and political allies (because the truly needy won’t get a dime of it). And so it goes in the cockeyed universe of Socialism.

No because the government explicitly designs those things.

First of all... what Apple is doing with iTunes S.a.r.l and Baldwin is legal and common practice. So why is that an issue? Sorry to break your bubble but many companies do this. It is legal you know?

Doesn't really make it OK though. Fortunately they all pay VAT now.

Bernie would get rid of this loophole. Doubt that it would get through the Republican Congress.

http://www.americansfortaxfairness..../fact-sheet-offshore-corporate-tax-loopholes/

If the money is earned abroad they shouldn't be paying full US taxes on it.

 

[VulchR]

If they are getting away with something it IS because the President, IRS, and the Attorney General let them. The laws are very specific about what qualifies as foreign research. Apple cannot just say, "oh we do that in Ireland" and make the tax go away.

There is no scam. They are too big, to be able to just avoid the law. Now they might be paying the President, IRS, and Attorney General to let them get away with it, but that is not Apple's problem that is a failure in the government. There is too much money at stake, for this to be ignored by accident by either Apple or the government.

Yes, well, as the cover story notes, Apple is being investigated by the EU. We'll see if their actions are legal. In any case, it is exceedingly odd that research supposedly done in Ireland benefits the US first. Also, as I noted above, Apple supposedly has this cash mountain. And yet there are obvious bugs in software and hardware, as well as incomplete coverage of Apple Stores in the EU etc. While that money sits there, it does not productive for anybody, except maybe bankers.