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

[VulchR]

...
Apple HATES to pay taxes like everyone else...

I agree with most of your post but I wouldn't say I hate paying taxes. I see taxes as an investment. Unlike many (not implying you), who must think the austerity fairy waves her magic wand and creates roads, schools, hospitals, emergency services, etc.

 

[Tamagotchi]

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.

Fanboys. What did you expect?

 

[Jambalaya]

Apple is one of the worlds most profitable companies and it avoids tax on an industrial scale, US taxes, UK taxes, French taxes, German taxes etc. It flies in the face of all the social good, product Red type stuff they do.

 

[Rogifan]

Apple is one of the worlds most profitable companies and it avoids tax on an industrial scale, US taxes, UK taxes, French taxes, German taxes etc. It flies in the face of all the social good, product Red type stuff they do.

I'd rather keep my money and donate as I wish. All those complaining here...how much of your income do you give away? You go out of your way to pay the most tax possible?

 

[numlock]

Hummm.... it's the same thinking I use when I do my personal taxes? Minimizing your taxes and taking all deductions possible within the law is hardly immoral.

There's not a company out there that does not try and reduce their corporate income taxes as much as possible.

Also... yes... lower the tax rate on corporations for profit... so they can invest their profit in more business... more jobs. It's not a race to the bottom... it's a way to grow the economy. Yeah... does it shift the tax revenue to the employee? Sure... but each of those income tax paying employees are buying things, and living a productive life.

not actually it couldnt be more different. following rules and laws as intended for deductions is the farthest thing from finding out loopholes in various countries tax codes, pressuring countries to change or not change their tax laws and setting up offshore corporations there that dont actually do anything.

obviously. however we have reached a state where its unsustainable for societies.

considering wealth is getting more concentrated your theory that pandering to them will improve the situation dosent actually ring true.

it will never be low enough. what guarantee is there that the trillions of dollars would be invested in the core business of the companies that keep that money abroad? is there anything to suggest innovation is lacking because all that money is abroad?

 

[macsmurf]

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.

Why do you think that corporate taxes are immoral?

 

[Thunderbird]

WRONG is in the eyes of however somebody wants to interpret it.
Morally doesn't apply in business.

Wow....just wow.

 

[Thunderbird]

If it's legal (your admission), then it's not a 'scheme'. It's a legal tactic….. in the exact same way that when Americans donate their old things to a Charity, they are legally entitled to tax write-offs, thus minimizing the tax they are entitled to pay. When the LAW allows citizens to use strategies to have tax write-offs/deductions, they are not scheming. It's clear to me that you and the Morality Police here imply that citizens who use valid legal strategies to lower their taxes owed to the Government are "evil schemers" for using strategies that the IRS clearly allows them. That might mean people who donate their old clunker cars that they don't need any more, or make donations to their Church. I'm sure you consider them "evil schemers" because they were able to avoid paying higher taxes. Never mind that they were actually following the letter of the law.
.

A legal tactic is still a scheme, however you wish to spin it.

This has NOTHING to do with charity, even by analogy. You seem to be turning the concepts of legality and morality inside out, making legality the moral standard, and morality something to sneer at. At one time slavery was legal too. Just because something is technically legal does not make it right, fair, acceptable, or desirable.

 

[Bubba Satori]

We can all rest assured that Tim and his political friends will do what is best for America's finances.

Minority leader has a nice rack.

 

[macs4nw]

Declare a tax holiday on overseas earning and instantly add $2.1 trillion to the US economy.

Totally agree; if that money were to be repatriated, it could do a lot of good to our economy, i.e. at least some more domestic research or manufacturing facilities, both of which are currently largely done oversees.

And I still don't agree that money earned elsewhere should even be taxable here. Either way a much lower tax rate could mean an influx of capital, and not just from Apple, which could be a boon to our economy.

 

[Doctor Q]

Not contradictory. You can decide not to do something because it isn't beneficial without conceding avoidance which implies an immoral component. The pejorative connotation of avoidance in this context would only be true if apple was morally obligated to pay tax in US for money earned abroad. Tim Cook clearly doesn't feel that is the case and takes umbrage with that assertion.

The comments in this thread show a mixture of opinions about whether corporate tax avoidance (using legal techniques to minimize the taxes you pay) is proper/moral or improper/immoral. The question is what Cook thinks about it. Someone should ask him whether or not Apple practices tax avoidance and get a yes/no answer.

His first quoted statement (denying tax avoidance) implies that he thinks tax avoidance is improper. His second quoted statement (saying that they leave overseas earnings overseas to avoid taxes) implies that he thinks avoiding taxes is a proper business practice. It's a mixed message at best.

A better way to put it is... Apple chooses not to pay an unnecessary tax for the purposes of transferring money to the US.

Right, he would have been better off if in his first statement he said that Apple doesn't evade taxes, and in his second statement he explained that there's no requirement to bring money earned in Europe into the U.S.

 

[Analog Kid]

Totally agree; if that money were to be repatriated, it could do a lot of good to our economy, i.e. at least some more domestic research or manufacturing facilities, both of which are currently largely done oversees.

And I still don't agree that money earned elsewhere should even be taxable here. Either way a much lower tax rate could mean an influx of capital, and not just from Apple, which could be a boon to our economy.

The lack of investment has nothing to do with the lack funds:


https://research.stlouisfed.org/fred2/series/EXCSRESNS

There is tons of money sitting in banks looking for investment opportunities. The problem isn't lack of funds, it lack of good opportunities. Why build a manufacturing facility if there's no demand for the products it will produce?

Also, Apple has periodically taken low interest loans with its overseas holdings as collateral as a way to use the money tax free without repatriating it.

 

[groovyd]

This is all very good for apple to do, avoiding paying taxes it does not legally have to pay. I do not see the problem one bit. If they want the money they need to change the tax law. Everyone tries to benefit from the 'loopholes'. Most couples have been doing the same to manipulate social security benefits for decades now; benefits I will probably never now see because of it. If you expect a society to be strictly governed by laws you need to write them correctly. As an Apple investor I would expect no less of them.

 

[SoAnyway]

Lots of misinformation thanks to the conservative media. The effective corporate tax rate has never been lower, hell many billion dollar mega corporations get a tax rebate thanks to the loopholes in our tax code. Cook is correct, the tax code does need to be updated but for corporations to pay their fair share of this country. Pay your damn taxes corporate America, nothing can be more American.

 

[aaronvan]

Good work, Tim. Keep as much of that cash as possible out of Obama's hands. He'll just expend it on rockets and bombs and killing civilians in the Middle East.

Keep those dividend checks coming, too.

 

[lordofthereef]

The comments in this thread show a mixture of opinions about whether corporate tax avoidance (using legal techniques to minimize the taxes you pay) is proper/moral or improper/immoral. The question is what Cook thinks about it. Someone should ask him whether or not Apple practices tax avoidance and get a yes/no answer.

His first quoted statement (denying tax avoidance) implies that he thinks tax avoidance is improper. His second quoted statement (saying that they leave overseas earnings overseas to avoid taxes) implies that he thinks avoiding taxes is a proper business practice. It's a mixed message at best.

And with this I think we can officially have a /thread!

We have the same few people coming back and pointing out that what Apple does isn't illegal and that they should look into their own wallets, etc. etc. The discussion isn't, and never was, about legalities, and yet the same people keep beating the same drum every time taxes and Apple come up in the same sentence.

 

[samiwas]

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.

By definition, isn't a loophole an unintended ambiguity in the law? While it all may technically be "legal", I don't view someone who hunts out these loopholes to essentially cheat the locations they operate out of revenue as admirable.

If it was up to me United States would have a flat tax with no deductions for individuals and no corporate income tax.

So, even though corporations are extremely heavy users of a country's/locality's infrastructure (highways, air services, legal protections, etc), they shouldn't have to pay anything for it? Really?

And would your flat tax have a personal exemption, the same for every individual, or a flat amount on every dollar made? Because, if not, then your tax places a much higher burden on the poor. But, of course, you knew that...

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.

Uhh..no, it's not. One set is a deduction available to everyone for actual expenses paid. Another is available to corporations who can pay high-dollar accounting and legal teams to set up shell corporations in foreign countries in order to falsely attribute certain operations to those corporations in order to reduce their tax burden. Seriously...do you think Ireland is doing a massive amount of Apple's operations? Completely delusional, if so.

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

Absolutely, they do. You don't think Apple (and other mega corps) uses more resources than Chipotle or something?

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?

Other companies do it too is not an open excuse to do something.

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

Uhhh...plenty of people are saying Apple should pay nothing. In fact, one of them is quoted in this post.

As much as I don't buy that "Apple's doing everything right" and I'm fully on that side of the aisle, I will agree that 35-40% is probably too high. Lower the rate, and kill the loopholes.

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.

If they spend money on business expenses and operations, then it is written off and not part of future profits, thus not subjected to tax. Anyone can say "Yeah, bro...I'm bringing in the money in order to invest, so let me do it for free!" Actually doing it is another matter. The last time we gave corporations a tax holiday based on their assertions that they would do all this economic good with it, pretty much nothing happened.

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.

They also have probably even even higher percentage of revenues and profits. So, no ****, Sherlock...of course they generate more taxes. As they should.

I'd rather keep my money and donate as I wish. All those complaining here...how much of your income do you give away? You go out of your way to pay the most tax possible?

This is all very good for apple to do, avoiding paying taxes it does not legally have to pay. I do not see the problem one bit. If they want the money they need to change the tax law. Everyone tries to benefit from the 'loopholes'. Most couples have been doing the same to manipulate social security benefits for decades now; benefits I will probably never now see because of it

What manipulations have couples been doing to falsely gain Social Security benefits? And if you don't support that (I don't), you can't then support Apple doing it.

 

[SusanK]

Everyone tries to benefit from the 'loopholes'. Most couples have been doing the same to manipulate social security benefits for decades now; benefits I will probably never now see because of it.

Are you able to elaborate on this, please? Thank you!

 

[Michael Scrip]

Quick question...

If Apple could get the same tax rate and benefits in the US that they get in Ireland... would Apple start keeping all their money in the US?

Does anyone wonder why so many companies set up shop in Ireland in the first place?

 

[thekev]

They should have to pay 30% of all REVENUE (not profits)... just like the App Store.

The fanboys always say to critics of Apple - "if you don't want to play by Apple's rules, then go somewhere else."

Apple - if you don't want to pay the US tax rate - then go somewhere else! I hear India (or Syria maybe?) is great this time of year...

You're thinking of taxes assessed on gross receipts if I'm not mistaken. That method is rarely (to the best of my knowledge) employed at state or federal levels. It's sometimes used in certain municipalities, but it's still not that simple. It's usually broken down by business type using specific codes.

At the federal level, taxes always account for costs incurred by a given business. I'm not going into it further than that. It's too easy to misstate something.

I mean most other countries have double-taxation agreements so you don't pay taxes twice.

They do. The US basically credits foreign tax on the condition that they file for any relevant refunds in that country. Unfortunately it's an accounting headache, because the IRS requires you to keep track of exchange rates and deal with a significantly more complicated tax process than what you incur as a domestic resident. This is of course on top of any compliance procedures you have to deal with for your current country of residence.

Even if you owe zero taxes the paperwork and fees are significant.

 

[jnpy!$4g3cwk]

Thank you for saying "The King is naked". So many Americans are clueless about where their tax dollars go, otherwise (...)

As I said in the post, I'm not saying whether it is good or bad. Some people honestly think the U.S. should spend more on military spending. What I am saying is that the Federal Government is spending 60% of discretionary spending (FY15 1$1.1 Trillion) on military spending. Whereas when I was young, the discussion was frankly "guns or butter"-- that is, it was understood that more military spending meant less for consumers, some folks want the public to believe that military spending is somehow minimal.

 

[shinji]

They should have to pay 30% of all REVENUE (not profits)... just like the App Store.

The fanboys always say to critics of Apple - "if you don't want to play by Apple's rules, then go somewhere else."

Apple - if you don't want to pay the US tax rate - then go somewhere else! I hear India (or Syria maybe?) is great this time of year...

Taxing 30% of revenue would be a horrible solution. Under that system, if Apple lost money, they'd still be required to pay 30% of revenue in taxes. That would deter Apple and other companies from spending to grow their business, which is the last thing we want.

 

[linuxcooldude]

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?

Ahem...Apple already paid taxes for that money overseas. Bringing that money back to the U.S. would incur double taxation. I think a one time tax free transfer to American banks, then tax it as it normally applies.

 

[Four oF NINE]

If you take any deductions on your tax return, you've no grounds for complaining about Apple doing so.

Right. Because there's zero difference between individual taxes and the wealthiest corporation in the world

 

[thewitt]

Incorrect, no US citizen is double taxed. Its a Double taxation treaty, not double tax.

I am taxed by the US Feds, the state where I still own a "primary residence" and the government of Malaysia. If I sell my house in the US while living abroad, I am forced to pay a 55% capital gains tax with no option to invest the profits of the sale.

A small percentage of my foreign tax is credited on my US tax return via the so-called foreign tax credit. Any ex-pat with any significant income (including expenses incurred and reimbursed abroad) far exceeds this tax credit joke.

My company reimburses me for a portion of the tax I pay in Malaysia, which the US government sees as income, and which then gets taxed in all three jurisdictions again.

The bill for my tax accounting is more than someone flipping burgers makes in a year...

Most other countries do NOT tax you for income earned while living and working abroad. There is an active movement by relocated ex-pats to actually denounce US citizenship as a result of the US tax policies, however it's not legal to renounce your citizenship over taxation...

Corporate repatriation tax is even worst, and forces companies with significant income abroad to spend that money in a foreign country as well to a pot upwards of 60% taxation.

The US needs to come to grips with the fact it cannot tax its way to financial stability.