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

[Robert.Walter]

No they don't. Don't be clueless.

The second statement refers to bringing the money they have over seas into the United States. They don't HAVE to do that. They are free to keep their money overseas right where it is. There is no Evasion going on here.

His problem with that is that it would cost him 40% of that money to bring it into the US because are tax system is such a total mess that we make companies pay taxes to bring money they made in other places into the country.

It should be FREE to do that. That money only benefits the country by being here instead of there.

The first comment regarding the tax avoidance issues are other matters and have nothing to do with the money they have in banks overseas.

I'm not sure that he would pay 40% on the money sittin in those accounts.

The US corporate tax rate is 35%.

I think Tim is counting both the small tax rate they pay in Ireland, IIRC it is <5% (and this sweetheart rate is under scrutiny by the EU as possibly being illegal under EU law. Last week the EU indicated that they were deepening their investigation on this issue and asking the Irish government for more information.)

I think Tim's quoted 40% is just the adding of these two 5 + 35% rates.

 

[gnipgnop]

Tim is playing a nasty waiting game. The bigger his overseas nest egg becomes, and the more desperate the USA government becomes to get a big chunk of tax income from repatriated profits, the more "reasonable and appropriate" the "digital age" sales pitch will seem and the leverage that multinational companies have to force a cut in rates will only grow, such that when some silly tax holiday is declared, or pointless tax cuts are enacted, every c-suite and K-street lobbyist and the congress and White House will be crowing on how there was an unprecedented bipartisan effort to solve this problem to the benefit of the American worker and taxpayer.

That's pretty much it: Congress can be relied upon to eventually come up with some sort of an excuse for another tax repatriation holiday, despite the fact that the CBO will tell them over and over that it's a very weak form of economic stimulus.

 

[tgara]

Exactly. Anyone one in the US that has an IRA or 401K is as guilty of 'tax avoidance' as Apple is. If you aren't avoiding as much tax as you can, I personally think you are a total moron. The US govt. is pretty much totally inept at doing anything productive with the money you've earned and ordered to give them.

Exactly right. I bet the people bitching the loudest about Apple's tax arrangement are people who (1) have no job so they don't pay any taxes, or (2) have a job, pay taxes, but are clueless about how tax systems work. My guess is that the majority on this board are the former, not the latter. Cook is right, the tax system in the US is a total mess. It created this situation.

The same accusations were thrown at Apple back in 2013 when the Senate did an investigation. Cook was right to challenge it then, and he's right to do it again now. In fact, what Apple should do is buy that Canadian trainwreck Blackberry, move the headquarters from Cupertino to Ontario, and reincorporate in Canada. It will save them a ton on taxes.

 

[OLDCODGER]

If there were no welfare state we would not be having this discussion - nor would the tax rate be 35%.

 

[Benjamins]

-> Cook described the tax avoidance accusations as total political crap.

-> He added that repatriating the money is not reasonable due to high corporate tax rates.

Those claims contradict each other. Apple is either avoiding tax or it isn't!

Not really. If keeping money you made overseas will result in paying less tax, and eventually you'll need to use that money overseas then why not keep that money overseas?

 

[danielwsmithee]

In my opinion the US Corporate tax code is completely backwards. We let corporations freely invest overseas, then tax them on the profits they may or may not bring back into the US. We should be taxing when the money is moved out of the US economy, not when it moves back into the US.

 

[Kar98]

They didn't PLACE or PUT any money overseas. It has always been there, it was generated there. They just haven't brought it into the US economy so they are not subject to US taxes.

Guess where a US citizen or legal permanent resident of the US has to pay taxes, even if if he earns the money abroad? That's right, children, in the US.

 

[Bubba Satori]

Queen Hilary will grab Tim's jewels and yank them off to pay for her Village,
barring a sizable 'contribution' to the Clintonista mafia, er, Foundation.
http://www.chicagotribune.com/news/...on-walgreens-perspec-1216-20151215-story.html

 

[QCassidy352]

Mod delete please. Thanks.

 

[gnipgnop]

Exactly right. I bet the people bitching the loudest about Apple's tax arrangement are people who (1) have no job so they don't pay any taxes, or (2) have a job, pay taxes, but are clueless about how tax systems work. My guess is that the majority on this board are the former, not the latter. Cook is right, the tax system in the US is a total mess. It created this situation.

Here's how the tax system works: individuals pay a far higher percentage of total revenue than corporations. The estimates for 2015 are something like 46% individual and 13.5% for corporations. The last time individual and corporate taxes were roughly equivalent in terms of total revenue was back in the 1940s.

 

[danielwsmithee]

Guess where a US citizen or legal permanent resident of the US has to pay taxes, even if if he earns the money abroad? That's right, children, in the US.

Only if they bring that money back to the US. My profits from overseas investments can be reinvested overseas and I pay no tax. That is exactly what Apple is doing, and they have every legal and moral right to do so.

 

[furi0usbee]

How? Why? Or are those forbidden questions yet?

HOW does Apple see Ireland as a burgeoning market that it needs to be there?
WHY does Apple have an office in Ireland?
WHAT exactly do they do in Ireland that they can't do elsewhere?

 

[Mr D]

Absolutely. You should see the thread at The Car Lounge about VW and their emissions cheating shenanigans. 200 pages and counting.

How is that the same to this?

 

[Karma*Police]

-> Cook described the tax avoidance accusations as total political crap.

-> He added that repatriating the money is not reasonable due to high corporate tax rates.

Those claims contradict each other. Apple is either avoiding tax or it isn't!

I don't see that. Not when you put it into context. The "political crap" is in response to the accusations that Apple is somehow breaking the law.

Not repatriating the money due to unfair/outdated tax code is something else entirely and within their legal right.

When governments get tight on money (which they are), finding rich scapegoats is far easier than fixing the busted political system and controlling their wasteful spending habits.

 

[CalWizrd]

HOW does Apple see Ireland as a burgeoning market that it needs to be there?
WHY does Apple have an office in Ireland?
WHAT exactly do they do in Ireland that they can't do elsewhere?

Are you advocating for the US government to have the right and authority to dictate where a US company may or may not locate a foreign office or facility?

What are you smoking? I would like some.

 

[Bubba Satori]

HOW does Apple see Ireland as a burgeoning market that it needs to be there?
WHY does Apple have an office in Ireland?
WHAT exactly do they do in Ireland that they can't do elsewhere?

They are researching thinner bills.

 

[Kar98]

Only if they bring that money back to the US.

Nope.

 

[drewyboy]

You need to do some research on this issue if you feel the need to comment on it. Ireland negotiated a sweetheart deal with Apple to bring jobs to the country. They already have one of the lowest corporate tax rates in Europe but the way the deal is structured Apple is even able to avoid this. When an Apple product is sold in UK, Germany, France and many other European countries the income is booked in Ireland and not in the country in which the product is sold. The end result of this is that a loss is generated in almost every country in Europe and a profit is generated only in ireland.

The fact that Apple is not paying any tax in these countries means they are using public services and not paying for them. This practice is not unique to Apple you can include Google, Starbucks and many other US companies.

So you're saying it a European Union issue. Got it. They should plug the loophole then. They made it, they have the power to fix it. Can't complain because of some loophole you made for someone who gave you a "donation". Fill hole, fixed problem.

 

[MH01]

Are you advocating for the US government to have the right and authority to dictate where a US company may or may not locate a foreign office or facility?

What are you smoking? I would like some.

I think you missed the sarcasm..... All pointing to Apple and other corporations being in Ireland , JUST for tax purposes

It's common knowledge. Google Ireland and tax avoidance.

 

[Analog Kid]

And totally legal. Unfortunately, this is a problem created by Congress (both parties), not Apple.

Not entirely. The US Congress doesn't set the tax rates in Ireland. This is a classic race to the bottom scenario.

Part of the problem is just inherent in dealing with multiple tax regimes. If you set up a subsidiary in a foreign country that owns all of your IP, and then license your own IP from that subsidiary, and that IP license accounts for a significant fraction of your product value then you are essentially converting a significant fraction of your profit into a cost. That cost rematerializes as a profit in the country where your subsidiary resides. Now you've transmuted your profits from tax regime to another purely by accounting magic.

Legal. Clever. Still problematic, and difficult to resolve without coordination among jurisdictions.

That's like saying I am avoiding taxes by not dying. As long as Apple leaves their earnings overseas, they don't owe the government anything on those earnings. Not bringing those earnings into the US economy is not tax avoidance.

It's the definition of tax avoidance. I think you're confusing the term with tax evasion.

His problem with that is that it would cost him 40% of that money to bring it into the US because are tax system is such a total mess that we make companies pay taxes to bring money they made in other places into the country.

It should be FREE to do that. That money only benefits the country by being here instead of there.

Not necessarily. If it encourages companies to incorporate in your jurisdiction and reap the benefits of your society without paying full freight for those benefits, it's kind of parasitic.

Amazing how many feel entitled to the labors of others. I dare any of you to earn a fortune and then hand over 40% to the Fed when there are tax loopholes that will help you avoid it. It's unreasonable and you'd be daft not to exploit those loopholes. Any of you would do the same.

And if you weren't able to take advantage of those same loopholes and thus were paying more for to live and work in the same society, you would be daft to not try and remedy the situation.

Immoral?

Screwing your brother's wife is immoral.
Stealing money from your child's piggybank is immoral.
Strangling your sister is immoral.

This is far from immoral.

Arguably, this falls under item 2.

 

[CalWizrd]

I think you missed the sarcasm..... All pointing to Apple and other corporations being in Ireland , JUST for tax purposes

It's common knowledge. Google Ireland and tax avoidance.

Nope. There was no sarcasm to be found in the post by furi0usbee. It was clearly a demonstration of a lack of forethought and an absence of any logical thinking.

 

[maxsix]

The faster this issue gets hidden, snatched out of the press permanently, the better.

There are no winners, Apple's spent decades crafting an image that caters to their customers.

Nothing can stop the worshippers from genuflecting, permanently siding with their "anti-establishment" company that is perfect. Plenty of posts here confirm that fact.

Those who (again) bring this topic to light have greatly underestimated the price they will pay.

Raising Tim Cook's hackles proves just how sensitive Apple is to being revealed. Oh sure, others do it, but when it's Apple, well...

 

[jetlife2]

Only if they bring that money back to the US. My profits from overseas investments can be reinvested overseas and I pay no tax

That is incorrect for individual tax. If you are a US citizen or permanent resident you pay tax on your global taxable income. It does not matter whether that income ever arrives in the US. If you have already paid overseas tax to the other country it is generally credited against your US liability up to the equivalent US amount (form 1116). If you reside overseas and have earned (generally wages and salaries) income, there is also foreign earned income exclusion for the first $100.8k. There is no exclusion for unearned passive (investment) income or gains.

In addition you must report to the IRS any foreign assets above the threshold amount, and also separately to the Treasury (different thresholds apply). Form 8938.

Following is a quote from Pub 525

If you are a U.S. citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U.S. law. This is true whether you reside inside or outside the United States and whether or not you receive a Form W2, Wage and Tax Statement, or Form 1099 from the foreign payer. This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties).

 

[captain kaos]

They may well pay what they owe, the point is after apple's tax people fudge the numbers though tax loopholes they don't owe much.

 

[MH01]

Nope. There was no sarcasm to be found in the post by furi0usbee. It was clearly a demonstration of a lack of forethought and an absence of any logical thinking.

Have a read. There is one very good reason corporations have headquarters in Ireland.

Every man and his dog knows it here is Europe.

http://www.theguardian.com/commenti...ns-dodging-tax-havens-pfizer-allergan-ireland