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

Ummm... Hasn't it been exactly the opposite for a fair while? I can reel off a huge list of firms that have been singled out - google, Starbucks and amazon are prime examples, apple is not (currently?).

Not sure if you honestly believe that or are playing the childish us vs them brand game, but the rest of your post is completely correct. Running a business, irrelevant of the size is exactly that, it's not about playing 'nice guys'. Abiding by the law and paying the absolute minimum amount of tax is simply good business and big business in itself. 'Charitable' tax donations aka Starbucks (and apples American based production?) is likely a marketing decision.

It's such a tricky thing and I've no idea how there could ever be a solution (until the world is run by a single bank? :)), but it's been proven time and time again that the simpleton view of taxing big business and high earning individuals has a negative impact on tax revenue. Morals don't have much sway when your legal options are either paying a government loads of money....or not.
 
Supporting the Democratic party should be more than just grinning at the SOTU speech. Suck it up and pay your fair share according to the law, Apple. I didn't get to whine about what is "reasonable" when my taxes were just raised by Cook's hero. "Pay your fair share", "share the wealth", Apple. One thing that I am told is that this country allowed me to be successful, I "didn't build that" on my own. Shouldn't that apply across the board?

As Apple's leader, Cook should be a good American and set an example for American companies that any Democrat would be proud of.
 
You are confusing the average person that makes $50,000 a year with a corporation that makes 15 BILLION a year.

;)

Well you know, according to the courts, they are the same thing.

Except of course all the additional tax breaks, shield laws, liability protections, etc that corporations get.


Wait a tick, that sounds like they aren't the same at all.....:confused:


;)
 
You are confusing the average person that makes $50,000 a year with a corporation that makes 15 BILLION a year.

;)

no I'm not. you don't have a $13 billion tax bill either.
if you cant handle your affairs in that way with your $50,000 what makes you think anyone should handle their $15 billion in that same way.. it's the principle.
 
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.

Well said.
 
Tax loopholes should be closed.

Profits gained within that country should be taxed in that country.

Any resultant cash flow should be moved around freely.

Why is this so hard to conceptualize for politicians?
 
Apple is not to blame. It's the govt that needs to modify their tax rules. Yet, any rule change will be stymied by special interest groups and opposition parties and may even backfire on the US economy overall. So just eat it.
 
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.

the government can't make up a tax code with 100,000 loopholes and dodges and then be heard to complain that taxpayers are taking advantage of those provisions which the government itself drafted and passed. Unless you think Google (and others) are not only cleverly using the law as written but actually breaking it - in which case (if you're right, which I very much doubt you are) they should be punished to the full extent of the law.
 
Article mentions $13 billion in tax if bringing back $100 billion. That seems like a very reasonable sum. Yet Tim talks about 35% tax, meaning have to pay $35 billion in tax... Do I miss something?
 
Pay the 13 Billion and bring that money back to the United States. Become an example for other companies.

Sweden has a lower corporate tax rate than the US, even though it has a much larger welfare state. Think about that. Corporations ultimately don't pay taxes. They just pass them along to people, whether in the form of lower wages, lower dividends, or lower salaries.

If we eliminated the corporate income tax, we could also eliminate a lot of personal tax breaks (e.g. different capital gains rate, "carried interest" for PE investments) with no measurable impact on the economy or total tax collections.

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Article mentions $13 billion in tax if bringing back $100 billion. That seems like a very reasonable sum. Yet Tim talks about 35% tax, meaning have to pay $35 billion in tax... Do I miss something?

It depends on where they earned the income from, and how much of the $100 billion represents "income." If Apple invested $10 billion in their subsidiary in the UK, for instance, and then they brought back $18 billion of cash since generated, the first $10 billion would simply be a return of their investment.

Once you get into the actual "income" generated, basically you take 35% of that (plus California's rate of around 9% less the fact that they can deduct that against their federal tax - netting to about a total rate of 41%) less what they already paid in taxes to the foreign country. So if they paid the UK 30% in taxes, in my example, they would pay the difference between their combined state/federal rate of 41% - 30%, or an additional 11%.

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Easy for you to say that when it's not your money. $13 billion is not chump change, not even for a company like Apple.

Exactly. $13 billion is nearly enough to buy 100% of Nokia's stock, in cash.
 
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.

True, but the US and Russia are pretty much the only countries that tax the worldwide income of their citizens and corporations. I work with a lot of expats from other countries, and while they are here, they pay only US taxes on their wages. They don't need to file a separate income tax return in their home countries.

The US does give US companies a "break" in that they don't tax foreign income that remains overseas. Otherwise a multinational would be nuts for having their headquarters here. They could incorporate in Canada or Bermuda, still have the majority of their employees here, and pay a lot less in taxes.

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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.

True. The limit is fairly low, $80,000 or something. Above that, and you indeed wind up paying US taxes on income you earned overseas.
 
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.

I thought that the consumer pays the VAT and the corporation pays it to the government. The VAT doesn't affect the company at all, just like sales tax here in the US.
 
Might as well give up...it's like trying to teach logic to a wall...they'll never get it. Some people think the USA is the center of the universe and deserve everything..even things that aren't theirs (like Apple's oversea's profits).

Actually, it's the same the other way around. All of you people banging your head against the wall talking about overseas sales are totally missing the point.

Where are IP royalties paid? In which country are they "sold"? The answer: from wherever the hell you like!

That's right: Apple is selling licenses to US patents (which are only enforceable in US courts), covering inventions that were created in the US, by a US company, a lot of the time to other US companies. It's signing those deals from shell subsidiaries based in tax havens and paying no tax on all the royalties they earn from them.

It turns out, there's a lot of stuff that can be covered by IP. In fact, you can even have your own subsidiaries (in places like the UK, Germany, and everywhere else in the world) take out licenses for essential things like branding. That's what Starbucks do in order to avoid tax in the UK (so Starbucks UK has to license the name, logo, store decoration, etc from the 'Starbucks Cayman Islands, Inc.'). Do Apple do it, too? Who knows? It's impossible to examine corporate accounts in that much detail because it gets combined with other things and stuck in to abstract accounting concepts before it makes Apple's financial statements.

A similar thing happens with iTunes - where are digital goods sold from? Also from wherever you like! Every time I buy a song from iTunes while I'm in the UK or Germany, I'm paying (a tiny amount of) tax to the Irish Government.

Now, you might think that's OK, but you can't deny that it has real negative effects on you.

iTunes has been putting music and video stores out of business, for example. Those stores did pay taxes. So now as iTunes grows, the UK and German governments lose the ability to tax music and movie purchases. That's real money they used to have which is now lost thanks to the way Apple structures its business.

Microsoft moved their patent licensing operations outside of the US in 2011. That move cost the US Government $4Bn per year. Again, those were US patents (only meaningful to US courts) invented by a US company in the USA.

That move didn't really cost the Government $4Bn per year - it cost the American people $4Bn per year, since they're ultimately going to foot the bill (with interest).

Apple also have it so that in some countries, when you buy an Apple product, you're not really buying it from that country, but from a salesperson who represents an Apple subsidiary in a tax haven. Apple's local division technically doesn't see any income from the sale, so no tax is paid is there (where's this double-taxation? Apple isn't even subject to single taxation in many countries!)

There are plenty of other extremely dodgy tax moves that other companies (including Apple) use to rob the people of their money. Apple deserves some special praise for actually inventing a lot of those practices (like the "Double Irish").

It gets ridiculously complicated, so it's too much to go in to all of them in detail here. Some of the techniques are well known, others we may never fully unravel.

Seriously - anybody who wants to reply to me, read the Wikipedia link about the Double Irish before you do. See what it involves. There's no way you can look at that and say that Apple is morally in the clear for following the law.

As somebody mentioned in another thread, Apple are not passive beneficiaries of a generous tax system. They create multiple shell companies in various countries to twist the tax laws in to complicated manoeuvres which are extremely difficult to understand, and even more difficult to fix (it relies on lots of interlocking legislation in different countries which does serve a valid purpose but was never intended for this kind of use).

They are abusing the tax law. You cannot absolve all their responsibility for that because they want to make money.

Apple has a tax rate of something like 9.8%. Companies like Wal-Mart, who despite their overseas subsidiaries, can't take advantage of much of Apple's clever accounting because of the nature of their business, pay closer to 30/35%. Why is that? Is that just?

Anybody who is more interested can read the NYT's excellent piece on this.

Again, I just want to emphasise that none of this is about overseas sales. Nobody is claiming the US should receive tax revenue for MacBooks sold in, say, Japan.This is about the more easily transferrable stuff (like IP), and how companies rearrange their businesses so that almost all of their local profits get caught up in easily transferrable internal costs. Those profits are effectively shifted across the world (e.g. Starbucks UK makes £10Bn in profit, then has to pay £12Bn in licensing costs for the Starbucks logo to the Cayman islands, which means Starbucks Cayman Islands makes a profit on which it pays no tax, and Starbucks UK makes a pre-tax loss and also pays no tax).

It doesn't just apply to Apple, of course, but they are just as much to blame as anybody else. In fact, you could argue that because they invented many of these techniques, they are historically more responsible.
 
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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.

(edit) A better solution would be to give a 1% discount on moneys repatriated and invested in the US.

So you want the US government to tax companies for money they earned outside of the US and they're holding outside of the US? wow just wow,how about we just start paying taxes in our country and pay to the US as well?:rolleyes:
 
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).

Businesses don't see it that way. It is a standard requirement, so it is built into advertised prices and they have to remit the tax out of receipts. The USA sales tax works differently.

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it's called the double irish and dutch.

let me know if this practice appears to be "cool" and "moral"
I think most individuals would say no.

But the reality of the issue, with the govt questioning CEOs like Cook is whether it is "legal".
 
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"

I'm quoting myself because it's obvious nobody actually read my post or several other posts in here and/or even try to understand the problem. Read that step to step and let me know if this is the "correct" thing for america to let their corporations do
 
It's a World Economy now. Not just the US.

Tim is exactly correct. They pay taxes on everything they SELL IN THE US.

Just like they pay taxes in other countries for whatever they SELL IN THOSE COUNTRIES.

Except that they do not pay 'correct' taxes for whatever they sell in the other Countries...

Similar to Google and Amazon, they complicate company holding 'rights' and liability whilst funneling money through countries like, Ireland, Holland and the Caribbean to do this.

It is huge news over in the UK right now, with Google going before MP's for a second time yesterday to explain the issue. Google failed to provide an appropriate response as far as I observed.
 
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Of course we'll hear all about Apple on the news, but not Google, Microsoft, etc., who follow the same practices (and rightfully so).

Do you mean on sites that follow Apple or in general?

Governments complaining about corporations taking advantage of tax laws makes no sense to me. This is like a homeowner complaining about their furnace when they have their windows wide open. Fix the problem?

I'm not sure that's possible without stifling investment at an international level.
 
Read the news in europe and you will see that they pay almost no taxes "offshore" (just like all others like Google and Microsoft)


Are you implying that Apple, Google and Microsoft are not paying taxes in accordance with European laws? I beleive they are all doing what is mandated by the laws in the countries they operate. Whether you approve of it or not is not, the local laws must be followed, and it's not your place to pass judgement on the laws in other countries.
 
Seems like many people still believe in "goog capitalism", begging Apple to bring some money back.
But that is an illusion.
 
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