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Tim Cook Defends Apple's Tax Record Ahead of Senate Committee Appearance [Updated]

Bonte said:
Apple earned it offshore
Apple payed offshore taxes
Apple holds the cash offshore

I don't see the problem, Apple would be taxed double and i would be taxed again via the dividend, there are limits to taxing.
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3 only happens because of 1 and 2. No one is proposing 2 still happens despite 3.

And it's not that simple. Most industrialized nations can probably agree on a reasonable minimum. Otherwise there will be corporations that keep profits offshore without being taxed illegally despite earning it in a country that would otherwise tax it.

The international tax doesn't care where you claimed you earned it. It only cares how much you were taxed where you earned it. So now they'd have to lie and say they were taxed more in territory A than they actually were. That would add another layer of complexity to tax dodging.

Do you know that Google only pays about a 2% tax rate? They sure as hell earn more here for 35% of their US earnings to only be 2% of their total earnings (assuming they're taxed 0% elsewhere). It's obvious companies are shifting profits. Make it harder and make them pay their due.
 
AppleScruff1 said:
All American companies doing business overseas are subject to having their overseas profits taxed in the US if they bring the money home. This isn't a surprise to Apple, Google, Microsoft, etc. That's what the current tax laws state, it wasn't sprung upon anyone by surprise. It has nothing with the USA being the center of the universe. It's where you chose to base your business, you are subject to their laws. Nothing difficult about that logic at all. Apple isn't breaking any laws by keeping the money abroad. If they want to bring it home, they must abide by the current tax laws, plain and simple.
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And I know everything you just typed. The point is the USA government wants them to bring that money back. Apple isn't going to do it.
 
Ryth said:
And I know everything you just typed. The point is the USA government wants them to bring that money back. Apple isn't going to do it.
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Of course they will, under certain conditions. They've proposed, in the past, a reduced tax rate as has previously occurred. They just want to control the conditions.
 
Ryth said:
And I know everything you just typed. The point is the USA government wants them to bring that money back. Apple isn't going to do it.
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And Apple is perfectly justified in not bringing it back. They are under no obligation to do so. If the US government wants all of these major corporations to bring the money back home, they will need to do something to entice them so they feel it will be in their best interests to do so, not the governments best interest.
 
Peace said:
Pay the 13 Billion and bring that money back to the United States. Become an example for other companies.
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An example of how to give money away???

The problem is that a company like Apple is really more of a feudal kingdom of independent and code pendant vassal companies in every geographic area Apple carries its flag. Each little vassal company pays its legal taxes on its sales, but where does the BIG PILE of cash go from profits? Under current tax rules there is zero incentive for Apple USA to collect its profits YO THE USA... It just leaves them accumulate in tax-free banks having paid its share of LOCAL TAXES on the money already.

The USA expects its people and companies to pay taxes to the USA too. That's not entirely unfair as the USA dumps disproportionate amounts of money to "keep the world safe" without that safety, there would be no safe offshore banks to stash the money on the first place.

Is 35% really fair? If Apple was MAKING THINGS here most of the value would be in manufacturing so that 35% would only be after all the other manufacturing costs... But Apple USA just LICENSES stuff... So that offshore money is mostly "free money" without USA IP laws Apple wouldn't be able to collect rent for using its name and logo on stuff.

Maybe Congress needs to cut a break on profits that have already been taxed by a local country? But then that opens things up to so much corruption...and no GOVERNMENTS still get their cut of the taxes.
 
This whole thing is ridiculous. What company in the U.S. wants to pay 35% in taxes for bringing money (along with LOTS of jobs) back into America??? That percentage is absurd. Absolutely.

10 - 15%? Sure. Maybe even 20%. But at 35% it's simply unfair and serves as a HUGE obstacle with regards to bringing manufacturing back here.

Now that said... I believe in keeping INDIVIDUAL taxes high because there is a certain quality of life threshold. Once you go beyond that... yes... you should have to pay a little more back into the system that helped get you to where you're at now.

Corporations/companies, that exceed a certain revenue/profit ceiling, are not individuals.

Our tax system needs a "reboot".
 
lkrupp said:
And let's all sit around the campfire and sing Woody Guthrie songs and pretend the world is a better place. Don't they teach economics in school any more?
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Can we sing Alice's Restaurant too, even though it was Arlo's song? :D:D
 
35% minus a foreign tax credit seems perfectly fair; that's what (domestic) corporate income taxes are at their level. He doesn't mention the foreign tax credit, but (correct me if I'm wrong) there is one...
 
re original article

like the way mr cook is a straight shooter yet the same time diplomatic
though aapl is not perfect she is being everyone's punching bag undeservingly
 
mcrain said:
Easy solution is to just impose the tax on the money held offshore and collect the $13 Billion dollars whether they repatriate the money or not.
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At which point they set up a corporation outside the US and let them handle the money. Then it would totally be inaccessible.

I'm in a different position from most posters here; I'm a US citizen living outside the US. Each year we look at our income, money earned here we pay taxes on here. Money from the US we pay taxes on in the US. We don't pay both. If I bring money that I've already paid taxes on over from the states or send it to our accounts in the states we don't pay again when it crosses the border. Apple and other big companies should be able to do the same.
 
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chrmjenkins said:
The US gives a tax credit based on tax paid to foreign entities. And you're not being taxed by the US instead of that country. Both of those are nonsense talking points.
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Mr.damien said:
Read the news in europe and you will see that they pay almost no taxes "offshore" (just like all others like Google and Microsoft)
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The potential credit is only on "income" tax. And that is what Mr.damien is seeing, little "income" tax paid. However:
Ryth said:
You should read the news also and get your facts straight. VAT is big in Europe. And Apple pays a ton of that.

It has not been suggested that any of their tax avoidance schemes are illegal.

All of the companies pay considerable amounts of other taxes in the UK, such as National Insurance, and raise large sums of VAT.
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The problem is that many countries rely on sales taxes, which is what VAT is. So Apple (or anyone) will NOT get credit for paying 15-20% on their sales in those countries if they repatriate the earnings to the USA.

There are, of course, additional issues. I believe Apple has a bunch of its royalty-type sales 'located' in non-USA countries. That is how they could be considered to be hiding profits from the USA govt.
 
JAT said:
The potential credit is only on "income" tax. And that is what Mr.damien is seeing, little "income" tax paid. However:

The problem is that many countries rely on sales taxes, which is what VAT is. So Apple (or anyone) will NOT get credit for paying 15-20% on their sales in those countries if they repatriate the earnings to the USA.

There are, of course, additional issues. I believe Apple has a bunch of its royalty-type sales 'located' in non-USA countries. That is how they could be considered to be hiding profits from the USA govt.
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How does a consumer tax (VAT) count as tax a corporation paid?

I don't see how forcing a tax collected from them via hitting the consumer a second time is smarter than just taxing the corporation directly and letting them decide how to pass on the added costs to the consumer (if at all).
 
I don't think people really understand how the world works. Let me give you an example of what tech companies do:

1. they create a product
2. they sell the license to this product to an ireland subsidiary
3. This ireland subsidiary has a managerial office in the carribeans and ireland lets you funnel money overseas that way very easily.
4. Sell the license to your product overseas to, america
5. when you make profit off america, you pay licensing costs back to the irish subsidiary which then funnels money to the carribean.
6. The company and the IRS usually has an understanding of how much of the money is charged in the US

oh by the way, EVERY TECH COMPANY DOES THIS. it's called the double irish and dutch.

let me know if this practice appears to be "cool" and "moral"
 
Small White Car said:
I've seen lots of accusations that Apple is doing terrible and illegal things but I've yet to see any proof.

The big big BIG difference between Apple and some of these other companies that send profits over-seas in convoluted cheat-schemes is that Apple is actually selling products in these other countries.

When an Apple store in Italy sells an iPhone to an Italian Apple then pays a tax to Italy for that. If that money stays in Italy, well, ok. There's nothing really wrong with that. Sure it would make me happy, as an American, for Apple to bring that money home and pay more taxes on it a second time, but what reason does Apple have to do that? I can't offer them a reason.
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I agree...and yet agree that the tax system for US companies working overseas needs to be revised...35% just seems ridiculous. Apple seems to be doing things legally, as many other companies do. So in our capitalist society, what's the reason to donate to the tax system? $13 billion is a looooot of money to lose just because you transferred it over a wire from outside the USA to inside the USA. $13 billion can serve a lot of purpose to a company.

I would like, however, to see Apple pondering to itself "hmmm...I'm saving $13bill by not moving money back to the USA...maybe I can spend $1billion and kick start some USA manufacturing" Throw us a bone, please, Apple.
 
Daalseth said:
At which point they set up a corporation outside the US and let them handle the money. Then it would totally be inaccessible.

I'm in a different position from most posters here; I'm a US citizen living outside the US. Each year we look at our income, money earned here we pay taxes on here. Money from the US we pay taxes on in the US. We don't pay both. If I bring money that I've already paid taxes on over from the states or send it to our accounts in the states we don't pay again when it crosses the border. Apple and other big companies should be able to do the same.
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There is a limit to what you are saying. If the amount you are making outside of US is above a certain $ value, you have to pay taxes on that extra amount in US on top of what you have already paid in the other country.
 
ericinboston said:
I agree...and yet agree that the tax system for US companies working overseas needs to be revised...35% just seems ridiculous. Apple seems to be doing things legally, as many other companies do. So in our capitalist society, what's the reason to donate to the tax system? $13 billion is a looooot of money to lose just because you transferred it over a wire from outside the USA to inside the USA. $13 billion can serve a lot of purpose to a company.

I would like, however, to see Apple pondering to itself "hmmm...I'm saving $13bill by not moving money back to the USA...maybe I can spend $1billion and kick start some USA manufacturing" Throw us a bone, please, Apple.
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they are kick starting some usa manufacturing. they have a factory that's building the mac mini here.

Even in America though, they seek tax havens to build their factories. they even built their accouting office in nevada, no state tax!
 
2bikes said:
There is a limit to what you are saying. If the amount you are making outside of US is above a certain $ value, you have to pay taxes on that extra amount in US on top of what you have already paid in the other country.
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Exactly and as they are paying 0% taxes in Europe thanks to their legal schema, they should pay full in US.
 
Apple has an obligation to its shareholders to pay as little tax as legally permissible. Just like every other company.

The same goes for individuals. You play by the rules, as much to your own benefit as possible. It's our capitalist system. And it works.

Of course we'll hear all about Apple on the news, but not Google, Microsoft, etc., who follow the same practices (and rightfully so).

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ericinboston said:
I would like, however, to see Apple pondering to itself "hmmm...I'm saving $13bill by not moving money back to the USA...maybe I can spend $1billion and kick start some USA manufacturing" Throw us a bone, please, Apple.
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Refer to the other story also posted this afternoon:

https://www.macrumors.com/2013/05/16/tim-cook-shares-details-about-new-made-in-usa-mac-model/
 
Mr.damien said:
Exactly and as they are paying 0% taxes in Europe thanks to their legal schema, they should pay full in US.
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What is full... Seems like that is the discussion all these big corporations would like to have.

Also, above a certain amount, a US citizen pays double tax (US and the country of earnings).
 
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Kaibelf said:
If they manufacture items abroad, ship them abroad, SELL them abroad, AND pay the local sales taxes in those countries, exactly why in the world does the US have a claim on that money? You're not supposed to be taxed twice on sales anywhere, and the US's tax and revenue issues don't preclude other countries' sovereignty.

What you're asking them to do is give away money that, frankly, the US has no right to have, and you want that to set an example? No.

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Sure! As long as my phone isn't $1100 to make it happen with wages and union pressure. Or, you can have the regular, and the "Made in the USA" edition, and let people choose which one they will pay for. I personally wouldn't spend more than $50 more for a domestically-produced phone, as I already pay thousands of my dollars to an American carrier for the service anyway, and the last thing I need is to struggle financially so that someone who decided not to finish high school can get a second car and a more comfortable home than I have.
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Because citizens have to pay income tax even if earned abroad. If corporations are people then it shouldnt even be optional.
 
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