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

[0488568]

Who is trying to excuse corporate greed?

You want to address why you cry about paying your taxes in a thread about Apple not bringing money back to the USA due to high tax rates for such action?

This more about freedom than corporate greed.

But your type always has that feel sorry for yourselves mentality.

What's my type? If I had to feel sorry for anyone it would be you, your lack of healthcare system and the police state you live in.

You think not paying taxes is about freedom? You are out of your mind.

 

[Crazy Badger]

For me, this is one of the biggest problems with our free market economy. OK, so Apple and many others aren't breaking any laws but it's hardly acceptable that profit generated from sales in one country are tax in another.

Corporation tax should be paid in the country where the profit (excluding any genuine cost of sales) from a sale was made, at whatever the prevailing rate is in that country. Companies need to know this information in order to move money around as they do today, so it just needs a joined up approach to implementing globally.

How can it be fair that an American citizen buying an iPhone in New York sees no benefit from the corporation tax that should be payable on that transaction (for example, lets say 40% of $100 profit) where as someone in Ireland does (even if it's significantly less). Same applies for any other country who are loosing corporation tax revenues which ultimately impact on services that can be delivered by their respective governments.

 

[VulchR]

Immoral? Give me one single good reason why you or anyone else should be entitled to extort ANY money from Apple just because you want it, and they were productive enough to produce it.

I mean, if you want to talk about morality.

First, taxes pay for infrastructure that companies benefit from. If companies fail to pay the fair amount of tax, public services and infrastructure begin to fail, which damages not only the society by the company itself. Put simply, the current system is not sustainable and Apple is engaging in short-sighted selfishness. Apple is now not the only company doing this, and in the long run it will hurt the tax base in the US and EU. Second, while that money sits there in Ireland it serves no useful purpose (other than to make bankers and financiers even more rich). Third, the managers of Apple should be looking after Apple's reputation. Apple's brand image has a massive monetary value, one that the leadership in Apple are starting to squander by tax avoidance stunts like using the Irish tax haven. Amazon suffered a consumer boycott last year in the UK because they were avoiding tax. Treating one's customers like they are fools is hardly conducive to good business.

 

[mrxak]

Wrong, the goverment that answers to its electorate decides what gets done with it.

Never ceases to amaze how Americans get brainwashed into cheerleading for huge corporations, every dollar they don't pay in taxes you do, with your hard work and your lifetime. I respectfully suggest you stop bending over and start standing up for your own interests.

A lot of Americans work at, have friends or family who work at, and have their retirement money invested in those huge corporations.

I might have more sympathy for your argument if the US Government showed even a hint of being responsible with its taxes and budgets, but let's face it, if Apple did generously donate 40% of its overseas profits to the US Government (and it would be a donation, since they have no legal obligation to do so) that money would go straight into paying off the massive amounts of debt the US Government has racked up with their reckless, irresponsible management of their income, not paying for schools or bridges.

 

[sim667]

YUP - if i make that much $$ overseas, i would keep it there too. i only pay for what i make in the US.

They don't pay for what they make across most of the EU.

A number of companies are being investigated, Apple, Starbucks, Amazon, Fiat Chrysler, over sweetheart deals in Ireland.

http://uk.reuters.com/article/uk-eu-taxavoidance-amazon-apple-idUKKBN0OR26820150611

 

[Benjamin Frost]

I feel that the debate here would be much better served if it were split into two separate threads, as there are essentially two different things being debated, which is leading to confusion. Whilst together, the discussion is rather obfuscated somewhat.

Firstly the US tax issue is something – as a British person – I am not informed or clued-up enough on to discuss. From a brief overview it seems there is a worthwhile debate to be had on the whole topic, as it does seem somewhat unfair to corporations/US citizens etc.

The second issue, namely Apple funnelling off its revenue made in one country to another which operates as a tax haven, thereby avoiding paying the tax owed in the country of purchase:

For a start, can we drop the lexical semantics in regards to the word avoid, from those clutching at straws as a way of defending what Apple do? It's ridiculous, time-wasting and proves your point no better. If Apple is using legal loopholes to move money to one country – as so to pay a lower rate of tax than that of the country they moved it from – they are by matter of fact doing so to avoid the higher threshold. There's no legality issue here in using the word, it just is – objectively – avoidance; it's what the word is in the English language for.

avoid;
contrive not to

contrive;
create or bringabout (an object or a situation) by deliberate use of skill and artifice

When Apple registers to do business in a country like the UK, it does so knowing – and acknowledging – to meet the requirements stipulated by that country in regards to the taxation of its monetary income from business in that country. That loopholes are found to avoid doing this whilst staying within the parameters of the law is a side issue: It is to me in the first instance underhand, dishonest, anticompetitive (to those companies who do acknoweldge and abide by them) and ultimately to the detriment of the people who live in that country.

In the United Kingdom we have the NHS. We are wonderfully privileged and lucky to have a health service that is free of charge to treat us. Any hour of the day, any illness or emergency, any length of time to recover in a hospital needed, 99% of this taken care of completely free. It's a truly brilliant thing that far too many people take for granted. Our NHS currently faces fierce cuts which leads to an inability to meet its obligations. Waiting times to get seen, over-worked staff, budgets for drugs, new staff recruitment and training, all these things are deteriorating because the budget is either been cut or the costs of operating it outweigh the budget currently attributed to it.

The NHS is an easy one to use as an example... In the UK, if you are arrested and charged with a crime, and summoned to court to defend yourself – if you cannot afford to do so the state will provide you with legal representation for free. This isn't some Simpsons budget charlatan lawyer but the finest legal professionals in the country who will fight your case fairly and unbiased, all for free of charge. They will ensure you are given equality before the law. It's called Legal Aid, and the budgets for this have been completely slashed, meaning the ability to make sure you are represented and defended fairly deteriorates.

In the UK, when you retire, if you have or haven't saved for a pension when you retire, the state will provide you with one.

If you suddenly find yourself out of work – or owing to the recession or any other factor you can't get employment – the state will provide you with money to live off.

If you are disabled, or have child with a disability under your care or supervision, the state will provide you with services to ensure you are supported – be it monetary, transport, housing, apparatus, education and so on. The budgets for this have been drastically slashed. Vulnerable people are suffering because of the changes to funding, those who need assistance the most can't get it.

Libraries, which are free of charge to borrow books from, are closing left right and centre, especially small community libraries. Mankind's wealth of knowledge and learning is in these books, which is now less accessible to people who want to learn.

These are just a small and off the top of my head selection of services afforded to citizens of our country, paid for by the raising of funds via taxation. They are the cornerstone of a well-rounded British society, giving care to the vulnerable, education to everyone, health services to anyone. We are given these indiscriminately as citizens of the country, and in return we agree to be taxed on a certain proportion of our monetary income to pay for them. It's a glorious system that whilst by no means perfect, has been the fruits of many thousands of years of battle and struggle for, and which in my opinion makes our society better for it; a better place to live for all.

By agreeing to partake in business in this country, a company acknowledges these facets and agrees to operate in accordance with them, for as long as they operate here they will be afforded the same rights and services as anyone else. From day one they take on a moral obligation to operate in a just and fair way – the same way the rest of us do. If not self-employed and on a proper payroll system, we all automatically have a portion of our wages deducted that has been democratically agreed upon to be a fair proportional contribution in the context of our salary.

For one of the past years Apple paid £11.4m tax in the UK on what would be £billions of revenue (we all know Apple's lovely profit margins). It's widely acknowledged their taxation in this country is under 1%. I don't care if it's legal, I don't care if Tim Cook gets the best deal for the shareholders, and I don't care about the pathetic semantics of how you want to dress it up, in my eyes it is nothing short disgusting. It is shameful that they will reap the monetary benefits of operating within a country, but are unwilling to pay their dues to the country that they are stipulated to do so for being able to operate in. It is taking but not giving. They have a legal, moral, and human obligation to pay the dues required of them – they agreed to do so by doing business there – because it is these dues that help the country operate and carry out their services to their citizens.

I remember reading Johny Ive bitching about how he went to a school and they didn't draw or make anything physical when prototyping. Hey Johny, guess how those machines are funded in our free education system?

If Apple, Amazon, Starbucks, Dyson, and all the other deplorable companies paid the dues they agreed to pay as a stipulation of operating in this country, many more people wouldn't die owing to poor waiting times; go through unnecessary pain because the treatment or drugs won't be prescribed as they're outside of the current NHS budget; more young children (and old people) would have much better access to free books to educate themselves and learn more about the world, our society would be safer because our Police service wouldn't be facing cuts to it's numbers; the disabled, vulnerable and in-need of our country would be getting a much better service that we a human beings owe; the elderly would have more money to live off; and people on the whole would have a better quality of life. That is the concept of tax – to fund services that lead to a better quality of life.

It's a service that we subscribe to and reap the fruits of by the very nature of our location and residence. Unfortunately Apple et al are conning that, and that is wrong, wrong on so many levels.

This is one of the best comments I've had the good fortune to read on the internet, if not the best.

Every word you wrote is the truth, and that truth is a damning indictment of our morally-lost society. Would that you were the Prime Minister of the U.K.

Thank you for taking the time to write it, Sir.

 

[Mr D]

What's my type? If I had to feel sorry for anyone it would be you, your lack of healthcare system and the police state you live in.

You think not paying taxes is about freedom? You are out of your mind.

Why do you keep talking about not paying taxes?

 

[0488568]

Why do you keep talking about not paying taxes?

Why do you keep evading the subject?

 

[Mr D]

Why do you keep evading the subject?

Because that is not what the OP Is about?

 

[0488568]

Because that is not what the OP Is about?

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

What's tax avoidance?

 

[Mr D]

I feel that the debate here would be much better served if it were split into two separate threads, as there are essentially two different things being debated, which is leading to confusion. Whilst together, the discussion is rather obfuscated somewhat.

Firstly the US tax issue is something – as a British person – I am not informed or clued-up enough on to discuss. From a brief overview it seems there is a worthwhile debate to be had on the whole topic, as it does seem somewhat unfair to corporations/US citizens etc.

The second issue, namely Apple funnelling off its revenue made in one country to another which operates as a tax haven, thereby avoiding paying the tax owed in the country of purchase:

For a start, can we drop the lexical semantics in regards to the word avoid, from those clutching at straws as a way of defending what Apple do? It's ridiculous, time-wasting and proves your point no better. If Apple is using legal loopholes to move money to one country – as so to pay a lower rate of tax than that of the country they moved it from – they are by matter of fact doing so to avoid the higher threshold. There's no legality issue here in using the word, it just is – objectively – avoidance; it's what the word is in the English language for.

avoid;
contrive not to

contrive;
create or bringabout (an object or a situation) by deliberate use of skill and artifice

When Apple registers to do business in a country like the UK, it does so knowing – and acknowledging – to meet the requirements stipulated by that country in regards to the taxation of its monetary income from business in that country. That loopholes are found to avoid doing this whilst staying within the parameters of the law is a side issue: It is to me in the first instance underhand, dishonest, anticompetitive (to those companies who do acknoweldge and abide by them) and ultimately to the detriment of the people who live in that country.

In the United Kingdom we have the NHS. We are wonderfully privileged and lucky to have a health service that is free of charge to treat us. Any hour of the day, any illness or emergency, any length of time to recover in a hospital needed, 99% of this taken care of completely free. It's a truly brilliant thing that far too many people take for granted. Our NHS currently faces fierce cuts which leads to an inability to meet its obligations. Waiting times to get seen, over-worked staff, budgets for drugs, new staff recruitment and training, all these things are deteriorating because the budget is either been cut or the costs of operating it outweigh the budget currently attributed to it.

The NHS is an easy one to use as an example... In the UK, if you are arrested and charged with a crime, and summoned to court to defend yourself – if you cannot afford to do so the state will provide you with legal representation for free. This isn't some Simpsons budget charlatan lawyer but the finest legal professionals in the country who will fight your case fairly and unbiased, all for free of charge. They will ensure you are given equality before the law. It's called Legal Aid, and the budgets for this have been completely slashed, meaning the ability to make sure you are represented and defended fairly deteriorates.

In the UK, when you retire, if you have or haven't saved for a pension when you retire, the state will provide you with one.

If you suddenly find yourself out of work – or owing to the recession or any other factor you can't get employment – the state will provide you with money to live off.

If you are disabled, or have child with a disability under your care or supervision, the state will provide you with services to ensure you are supported – be it monetary, transport, housing, apparatus, education and so on. The budgets for this have been drastically slashed. Vulnerable people are suffering because of the changes to funding, those who need assistance the most can't get it.

Libraries, which are free of charge to borrow books from, are closing left right and centre, especially small community libraries. Mankind's wealth of knowledge and learning is in these books, which is now less accessible to people who want to learn.

These are just a small and off the top of my head selection of services afforded to citizens of our country, paid for by the raising of funds via taxation. They are the cornerstone of a well-rounded British society, giving care to the vulnerable, education to everyone, health services to anyone. We are given these indiscriminately as citizens of the country, and in return we agree to be taxed on a certain proportion of our monetary income to pay for them. It's a glorious system that whilst by no means perfect, has been the fruits of many thousands of years of battle and struggle for, and which in my opinion makes our society better for it; a better place to live for all.

By agreeing to partake in business in this country, a company acknowledges these facets and agrees to operate in accordance with them, for as long as they operate here they will be afforded the same rights and services as anyone else. From day one they take on a moral obligation to operate in a just and fair way – the same way the rest of us do. If not self-employed and on a proper payroll system, we all automatically have a portion of our wages deducted that has been democratically agreed upon to be a fair proportional contribution in the context of our salary.

For one of the past years Apple paid £11.4m tax in the UK on what would be £billions of revenue (we all know Apple's lovely profit margins). It's widely acknowledged their taxation in this country is under 1%. I don't care if it's legal, I don't care if Tim Cook gets the best deal for the shareholders, and I don't care about the pathetic semantics of how you want to dress it up, in my eyes it is nothing short disgusting. It is shameful that they will reap the monetary benefits of operating within a country, but are unwilling to pay their dues to the country that they are stipulated to do so for being able to operate in. It is taking but not giving. They have a legal, moral, and human obligation to pay the dues required of them – they agreed to do so by doing business there – because it is these dues that help the country operate and carry out their services to their citizens.

I remember reading Johny Ive bitching about how he went to a school and they didn't draw or make anything physical when prototyping. Hey Johny, guess how those machines are funded in our free education system?

If Apple, Amazon, Starbucks, Dyson, and all the other deplorable companies paid the dues they agreed to pay as a stipulation of operating in this country, many more people wouldn't die owing to poor waiting times; go through unnecessary pain because the treatment or drugs won't be prescribed as they're outside of the current NHS budget; more young children (and old people) would have much better access to free books to educate themselves and learn more about the world, our society would be safer because our Police service wouldn't be facing cuts to it's numbers; the disabled, vulnerable and in-need of our country would be getting a much better service that we a human beings owe; the elderly would have more money to live off; and people on the whole would have a better quality of life. That is the concept of tax – to fund services that lead to a better quality of life.

It's a service that we subscribe to and reap the fruits of by the very nature of our location and residence. Unfortunately Apple et al are conning that, and that is wrong, wrong on so many levels.

Great post with a lot of information. I completely agree on the level at which you are discussing - it isn't right.

However - you can only be mad at whoever allows this to happen.

Apple and every other company avoiding taxes is doing what every single business school teaches you - operate within the laws - make and save as much as you can.

No one is going to save these businesses if they fail.

 

[Mr D]

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

What's tax avoidance?

First off - the first quote from Tim Cook in the op is about Tim Cook bringing money back to US costing 40%.

They are "avoiding" paying their taxes legally.

You complaining about paying taxes in which - if you don't - you'd be breaking a law.

 

[Hustler1337]

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.

It's not my definition, it's a legal definition. Putting money in an IRA, annuity or making 'legal' deductions is perfectly legal but the reality is that you don't know the intention behind it. It's not for us to judge whether something is legitimate or a pretence to avoid taxes but in the case of Apple and many corporations you'll find that tax avoidance generally is their underlying motive. If you look at tax law cases, you'll find that it's very difficult to prove, in law, that a corporation actively avoided paying their taxes and it's the reason why various governments have started publishing guidelines and policies to deal with this growing and global problem.

Whether you believe the US Government is corrupt or not is not for me to comment, but even if they were not corrupt do you think corporations would still like paying taxes? Fact is almost nobody likes paying taxes and individuals and corporations will naturally try to minimise the amount of taxes that they pay. Apple and others will still continue to do what they do. All I said was that I think that it's morally wrong for corporations like Apple to avoid paying taxes on such a large scale while small businesses and others who cannot afford to pay for cunning or shrewd accountants and lawyers continue paying their taxes.

 

[0488568]

First off - the first quote from Tim Cook in the op is about Tim Cook bringing money back to US costing 40%.

They are "avoiding" paying their taxes legally.

You complaining about paying taxes in which - if you don't - you'd be breaking a law.

so because there is no law penalizing it's ok?

Kind of like if I would go to your house kill a family member and return to my country where there is no extradition law. That would be ok too?

 

[Mr D]

so because there is no law penalizing it's ok?

Kind of like if I would go to your house kill a family member and return to my country where there is no extradition law. That would be ok too?

What do you mean by ok?

That would mean you broke a law in my country so if you come back you're going to jail.

Mind telling me how that relates to Apple legally avoiding their taxes?

Again - don't be mad at Apple be mad at the governments for allowing this to happen.

 

[Mr D]

It's not my definition, it's a legal definition. Putting money in an IRA, annuity or making 'legal' deductions is perfectly legal but the reality is that you don't know the intention behind it. It's not for us to judge whether something is legitimate or a pretence to avoid taxes but in the case of Apple and many corporations you'll find that tax avoidance generally is their underlying motive. If you look at tax law cases, you'll find that it's very difficult to prove, in law, that a corporation actively avoided paying their taxes and it's the reason why various governments have started publishing guidelines and policies to deal with this growing and global problem.

Whether you believe the US Government is corrupt or not is not for me to comment, but even if they were not corrupt do you think corporations would still like paying taxes? Fact is almost nobody likes paying taxes and individuals and corporations will naturally try to minimise the amount of taxes that they pay. Apple and others will still continue to do what they do. All I said was that I think that it's morally wrong for corporations like Apple to avoid paying taxes on such a large scale while small businesses and others who cannot afford to pay for cunning or shrewd accountants and lawyers continue paying their taxes.

I think everyone agrees that it isn't morally right. But morals is just an opinion.

Governments do immoral things too - and whose to say that these companies tax monies will morally be used correctly?

 

[0488568]

You continue to assume that it's ok not to pay taxes because there is a loophole that allows to evade it legally.

I'm not mad at anyone. If anything I'm astonished at how blind and lacking in morals the typical user is on here.

 

[Rocketman]

The trend started in Sept 2008, about the time Lehman Brothers collapsed under the previous President. Lehman collapsed as a result of excessively high leverage and investment in bad mortgages under the previous President.

View attachment 606614

Amazing how many people take a November '08 election and use that to confuse people into thinking Obama was responsible for everything that happened in that year...

Public and financial behavior changed when it became clear Sen. Obama had a lead in the polls. You could predict his presidency with high confidence in July 2008. Behavior changed when it became clear we would have a tax and spend president again. What we didn't know was the sheer magnitude of it with a $1.5T annual deficit and a 5 year CR on the budget due to a recalcitrant D majority senate.

The reserves accumulated because the Fed added IOR (interest on reserves) so banks and investment banks with access to the discount window could invest at 0.25% risk free which was almost as high as the NIM (net interest margin) they received from the loans they did. So they only loaned to the most credit worthy borrowers. The recent change in Fed interest policy will increase NIM 0.25% or less so there will be very little change in borrowing standards. It will not be until we get to about 1.5% the NIM will increase enough for some of the traditional borrowers to regain access to the banking system.

BTW this also explains why we have had such muted GDP growth. Traditional borrowers and all savers are removed from the consumption chain, which is 70% of GDP.

The unemployment rate only dropped when the extended unemployment insurance was ended and the participation rate dropped precipitously.

 

[BoxerGT2.5]

I think it's funny people want to talk about morality when they are counting other peoples money that they did absolutely nothing to earn/build/grow as "our" money.

 

[0488568]

So you assume everyone would become immoral if they have that kind of money?

There is a saying in Spain just for this case, "El ladron piensa que todo el mundo es de su condición".
Rough translation, a thief thinks everyone is of his condition....

 

[dk001]

US citizens do not want to pay for anything that is not related to them. So they assume they will not be affected. That's why their healthcare system is so expensive. They practically live in a police state. The education system is also super expansive. Etc.etc.etc.

I live in Spain, and yes I pay more taxes then the US. But I have an excellent healthcare system which is free. School system is almost free. The police is not out there harassing people or killing people just because.

Wow - so uninformed.
Go find a US doctor in private practice and ask them what percent of their budget is insurance.
Hint: Malpractice

However I do have to chuckle. Comparing Spain to the US is like comparing Apple to Joe's Computer Emporium. There is a serious difference in scale, diversity, and global economic impact. Make the EU a single country and it would be a far closer comparison.

And that's exactly what I was proposing in my earlier post.
If government spending was more transparent - there would be much more confidence and acceptance.
But it is not.

If someone actually took (had) the time to sit down and look at the structure of the US Government, then matched up the budget financing to support this, then add the interdependencies on a domestic then international scale, then .... it will take a literal act of god to fix this. Or a whole lot of pebbles tossed into the pond.

They don't pay for what they make across most of the EU.
A number of companies are being investigated, Apple, Starbucks, Amazon, Fiat Chrysler, over sweetheart deals in Ireland.
http://uk.reuters.com/article/uk-eu-taxavoidance-amazon-apple-idUKKBN0OR26820150611

I do have to chuckle The EU came up with the model, implemented it, and some countries found a way to leverage themselves a better (in their mind) position and take advantage of it. Now the remainder of the EU complains as they either did not think of it, felt they should not do it, or failed to do it first.

 

[0488568]

Wow - so uninformed.
Go find a US doctor in private practice and ask them what percent of their budget is insurance.
Hint: Malpractice

However I do have to chuckle. Comparing Spain to the US is like comparing Apple to Joe's Computer Emporium. There is a serious difference in scale, diversity, and global economic impact. Make the EU a single country and it would be a far closer comparison.

If someone actually took (had) the time to sit down and look at the structure of the US Government, then matched up the budget financing to support this, then add the interdependencies on a domestic then international scale, then .... it will take a literal act of god to fix this. Or a whole lot of pebbles tossed into the pond.

Maybe there wouldn't be so much malpractice suits if healthcare was affordable? You charge me an arm and a leg for an operation and you screw up. You better be prepared to pay.

Fine, lets compare Canada to the US since EU is made up of different countries. Better education, free healthcare system, no police state.

 

[rdowns]

Wow - so uninformed.
Go find a US doctor in private practice and ask them what percent of their budget is insurance.
Hint: Malpractice

http://truecostofhealthcare.net/malpractice/

 

[dk001]

so because there is no law penalizing it's ok?

Kind of like if I would go to your house kill a family member and return to my country where there is no extradition law. That would be ok too?

I went back and rewatched the 60 Minutes segment on this then did a bit of digging to see what tools / methods Apple employs to minimize it's tax burden. This whole piece on the USA 40% and Ireland is actually just a small piece of the overall strategy and activities Apple executes to limit the tax impact.
Very significant and long term that started long before TC. Very interesting reading.

 

[dk001]

Maybe there wouldn't be so much malpractice suits if healthcare was affordable? You charge me an arm and a leg for an operation and you screw up. You better be prepared to pay.

Fine, lets compare Canada to the US since EU is made up of different countries. Better education, free healthcare system, no police state.

That wouldn't stop or even slow things down. Between the ease of initiating lawsuits and the driver that insurance is a profit heavy business model, free won't do much of anything. It will take a corporate and government overhaul IMO.

As for Canada, I would not in any way call it better. I would rather pay more and have easy medical access than the current plan in place in Canada. Their model looks good till you dig down.