U.S. Senators Claim Apple Has Avoided Paying Billions in U.S. Income Taxes Ahead of Tim Cook Testimony

[btbeme]

It sickens me that the richest corporation in the world pay no taxes to nobody while millions cannot afford basic necessities like food, and even more millions pay lots more in taxes to take up the slack.

That wealthy corporation employs tens of thousands of people, pays them good wages, and demands that their suppliers do the same. At what point does a company's obligation end and your personal obligation begin?

Apple's stance is the same as thousands of other companies in the United States, large and small - corporate taxes are far too high in the US. Therefore, they keep their profits offshore, in countries where taxes are much lower.

Do you wait for an item to go on sale, or shop around to find the best deal? Same thing.

 

[LarryC]

I am not a tax expert and what I know about economics could be engraved on the head of a safety pin. But I do recall something that I heard an economics professor say, and that was that corporations do not pay taxes. It is the consumer or consumers that purchase that company's products that pay the tax. These corporations simply figure in the price of their tax liabilities into the selling price of everything they make and/or sell. You could say (and many do) that these mean and evil oil companies such as Exxon Mobile, British Petroleum, Shell, etc. should be taxed at, oh, say 50% because we all hate paying so much for gasoline at the pump, but if these people had their way and if we were to force these companies to pay that 50% tax on their earnings, we would instantly be paying an extra 50% at the pump. And then the consumers would really be upset. I'm sure that Apple pays billions in taxes every year. It isn't wrong that Apple only pays the minimum that they are legally required to pay. That is just what corporations do. That is their job, to maximize earnings and increase the share price. Period.

 

[iGrip]

That wealthy corporation employs tens of thousands of people, pays them good wages, and demands that their suppliers do the same. At what point does a company's obligation end

I have no idea where their obligations end. But I am certain that their obligations extend at least as far as paying their fair share of taxes.

 

[dec.]

It sickens me that the richest corporation in the world pay no taxes to nobody while millions cannot afford basic necessities like food, and even more millions pay lots more in taxes to take up the slack.

Apple is scummy.

What about Microsoft or Dell? Because really nobody buys Apple computers but everyone buys a Dell... or something stupid like that....:

http://www.bloomberg.com/news/2013-01-23/yahoo-dell-swell-netherlands-13-trillion-tax-haven.html

http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-profits-offshore_n_1901398.html

 

[iGrip]

But I do recall something that I heard an economics professor say, and that was that corporations do not pay taxes. It is the consumer or consumers that purchase that company's products that pay the tax.

You are likely confused, and he likely said that the stockholders ultimately pay the taxes. Such a statement is a common shibboleth among those who argue that corporations should not pay any taxes.

 

[olegandbuster25]

HAHAHHAHAHA what greedy amateurs.

They are going to explain to American families how money that is made over seas and gets taxes less should for no reason what so ever be taxed by American government and that this hurts us?

How about you explain what would really help and makes logical sense:
The the government has the option and power to lower the rate at which people or companies bring in money into this country... And then by doing that they can take a small chunk of money that in now way is rightfully theirs, and let the rest of it to be used by the companies to further propel the US economy.

If anyone is corrupt it's the antidemocratic senators proposing this crap.

 

[iGrip]

What about Microsoft or Dell?

Likely Apple, Dell and Microsoft are exactly as scummy as Monsanto or Exxon.

 

[ckeck]

This corporate tax avoidance by the biggest FORTUNE 500 corporations has got to stop. Figure it out, Washington!

If we lowered our corporate tax rates this would not be a problem and we'd still net MORE in taxes than we do today. It doesn't have to be absurdly low because there is a cost for companies to handle their money this way and stay on top of the loopholes...it just needs to be low enough that it's not worth the effort.

Or maybe it should be absurdly low so they can keep all their money here and continue to reinvest in America per say.

There is a specific reason why companies AND individuals do this...tax rates are TOO HIGH in the US. Just because they are higher elsewhere doesn't mean ours are low.

As for corporate taxes...highest/near highest in the world...I don't blame Apple at all.

http://taxfoundation.org/article/yes-sen-sanders-we-really-do-have-highest-corporate-tax-rate-world

 

[MacDav]

I don't give a damn if a company pays taxes in China and India. That doesn't make them exempt from US taxes. If they want to do business here, they have to pay the taxes to do so.

What are you talking about? Apple has paid it's US taxes in full. They paid all their taxes completley on profits made in the US.

 

[ChrisA]

Doesn't the IRS check for these kinds of things when companies file every year? Considering how money hungry the government is, you'd expect them to pay closer attention to large international public companies such as Apple.

They DO check. Apple has done nothing wrong. Congress created the tax breaks and Apple took advantage of them. No one has suggested that Apple broke the law.

 

[vvswarup]

I have no idea where their obligations end. But I am certain that their obligations extend at least as far as paying their fair share of taxes.

What's defined as fair? 20%? 30%? 50%? 75%?

It's been stated ad nauseam that the rich need to "pay their fair share" but no one puts a number on it.

And have you taken any deductions or anything else of the sort in order to reduce your tax burden? What difference is there between what you are doing and what Apple is doing other than the magnitude of tax savings being achieved?

 

[SeattleMoose]

Meanwhile, NONE of the Wallstreet and bankster scum that engineered the RE bubble and financial collapse, are EVER even mentioned for their outright criminal activity. The reason Apple is under attack is that the rich hedge fund managers want part of Apple's cash stash for themselves and their rich clients. That would be an instant wealth transfer from Apple to non-deserving parasites. (But I digress) So until Apple capitulates there will be "findings" and lots of negative press to drive down stock price. Apple meanwhile...will continue to earn TONS more cash LEGALLY!!! The hypocrisy of those pointing the finger at Apple is almost laughable.

 

[MacDav]

Don't get me wrong, I blame the strict and unfair tax laws setup here in the States, but at the same time, if I gotta pay my fair share of taxes, it's only right that big time corporations do the same.

Apple pays it's "fair share" under the current taxs laws the same as you do. Do you think they should pay more than the legal amount due? Do you pay more than you are legally libel to pay? Just wondering....

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It sickens me that the richest corporation in the world pay no taxes to nobody while millions cannot afford basic necessities like food, and even more millions pay lots more in taxes to take up the slack.

Apple is scummy.

WTF? Apple has paid it full share of US taxes. What are you talking about?

 

[btbeme]

I have no idea where their obligations end. But I am certain that their obligations extend at least as far as paying their fair share of taxes.

Are they obligated to clothe you? Bathe you? Tuck you in at night and guard the door?

Or should they stick to building gadgets that improve the lives of billions around the world, directly providing a livelihood for tens of thousands of people, employing hundreds of thousands more in the supply chain, paying what they are legally obligated to pay in taxes, and simply let you live your life as you best see fit?

You have Apple confused with the Nanny State.

If you can't figure out where the Nanny State is, just stick out your hand and wait for someone to put something in it. Then you will have found what you are looking for.

 

[Mackan]

Seriously, there are really two major issues here: The US tax code is in need of a serious overhaul to close loopholes and align practices, and Apple's practices need to be further investigated globally for any potential illegal activities. Yes, Apple appears to have broken no laws here, while doing an excellent job of showing how greedy, unethical and dishonest a company can be and still be loved by the consumer.

This pretty much sums it up. Don't know why people continue to argue in this thread...

 

[MacDav]

They don't.
Since there are mutual tax agreements in place with these countries, Apple would not have to pay taxes twice. They would only have to pay the difference between the foreign and the US tax.

Also, the money is not really held in the countries where the products were bought. It is moved to a few specific countries (e.g. Ireland) where the corporate tax rate is lowest. With several tricks like the so-called "Double Irish With a Dutch Sandwich" they can shift around the money between foreign subsidiaries.

The problem is not just the US tax code, the tax havens would have to close their loopholes as well.

Yes, it's a Global economy and every country has a different set of tax codes and laws. The best U.S. politicians could do would be to get rid of all current tax codes and instate a "Flat Tax" on everyone with zero loopholes. This would not affect "offshore" taxes, but would eliminate tax inequality in U.S. Too bad this will never happen. It would reduce the size of the IRS by about 80% and make your annual taxes a breeze. It's a simple and elegant idea and this is why it will never happen unless the American people insist on it. Unforunatley, the American people are not paying attention as usual.

 

[MikhailT]

It sickens me that the richest corporation in the world pay no taxes to nobody while millions cannot afford basic necessities like food, and even more millions pay lots more in taxes to take up the slack.

Apple is scummy.

Did you not read Apple's filing [required by laws to be factual or they face huge fines], press reports, and etc? Apple has paid $6 billion in taxes last year and will be paying $7 billion in taxes this year. They're one of the largest tax payers in the country.

GM in 2010 paid no taxes.....

No, they haven't. That is the point.

Read the New York Times article. The have a subsidary that is incorportated in Ireland, and meets as a board in the US, and as a result doesn't pay taxes in either country. Legal? Maybe. Ethical? Questionable. Do these countries need to change their laws? Yes.

http://www.nytimes.com/2013/05/21/b...-congressional-panel-says.html?pagewanted=all

Yes, the same Congress who also said that Apple have no employees in Ireland where Apple just shared their report that they have over 4K employees in there with more building planned.

I rather trust Apple with their *facts* then I do the US congress with *facts*.

 

[MacDav]

"Apple wasn't satisfied with shifting its profits to a low-tax offshore tax haven," said Sen. Levin. "Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere. We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed."

What a load of crap...Politicians Cons&Libs alike make me want to puke. The idea that I or anyone will pay more taxes because of Apple's tax strategy is an outrageous lie. Is there an amount of taxes that we need to get to? If Apple doesn't pay as much as they want them to pay then the American people have to make up the difference? What BS. Everyone pays what the tax laws says they need to pay. Not a penny more. They make the tax laws. Just shut up and do your jobs. Try balancing the budget for once.

 

[fmaxwell]

So Obama and the U.S government are so broke, have spent all of our tax dollars, don't like the sequester, and can't wrap their heads around the idea of cutbacks rather than increased spending...

I hope you realize that Obama has cut the deficit by over half -- by about $800 billion -- since he took office. It's the fastest deficit reduction we've had since the end of WWII. All the while, protecting most of the tax cuts that the GOP insisted upon under Bush. As a nation, our tax rate is the lowest it's been in more than 60 years (source: Bruce Bartlett, former adviser to President Reagan).

Cutting spending when we are trying to come out of a recession and increase employment is retarded. You think that the government laying off more workers, and canceling contracts that American firms are performing to, is a good way to bring down unemployment? Please tell me that you don't vote in our elections.

 

[nick_elt]

if apple paid all taxes on each country that they should, where is the problem? trust me my business doesn't pay MORE taxes than it should are they crazy? The government's sets the laws

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i pay bloody 23%tax on every apple product that I buy here in Poland, why should I pay an American tax as well? Because if they had to it WIl be passed on to consumers no doubt.

 

[MuppetGate]

I chose this post, but I could have chosen many others.

Apple seems to be moving the "profits" around so that all the expenses are passed through the US (i.e. the US is very unprofitable) and all the "profitable" revenue (i.e. nearly no expenses are booked) is passed through places like Ireland.

According to the Sen. Levin's site, $104 billion of revenue has been claimed by two entities in Ireland, both of which while incorporated in Ireland are technically not Irish tax residents (because of their weird laws and special deals) or US tax residents either. One of these Irish entities booked $36B in revenue and has never paid taxes. The other only paid a fraction (5/100ths) of a percent in taxes.

As the these entities are in Ireland, the US doesn't control that loophole.

According to Senator Levin, Apple doesn't have any employees in Ireland.

http://www.irishexaminer.com/ireland/boost-for-city-as-apple-set-to-create-350-jobs-159522.html

COMPUTER giant Apple is to provide up to 350 jobs in Cork after signing a property deal to establish an office in the city centre.
The company, which already employs more than 3,000 people in Ireland, has signed a deal to lease offices in Cork’s Half Moon Street, a move that reverses recent trends of companies moving out of the city to cheaper suburban parks

And doesn't have any premises in Ireland.

So if the committee can't even get these basic facts right, why should we assume that know what Apple is or is not paying in Ireland?

 

[Yixian]

Completely unacceptable, as much as I love Apple products, this is far more important, I hope the Feds throw the book and them and rinse them of every penny they owe.

It's not like Apple won't still have vast, largely unused, cash reserves after they're done anyway.

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I hope you realize that Obama has cut the deficit by over half -- by about $800 billion -- since he took office. It's the fastest deficit reduction we've had since the end of WWII.

Deficit reduction doesn't result in growth, it's just used as an excuse for austerity and privatisation. That deficit was created partly by bailing out rich investment banks when they gambled and lost, Obama paid them off with your (the taxpayers) money, and then reduced government spending (spending on your society) in order to recoup that.

In other words he paid off Wall Street with your money, then recouped the loss of your money with even more of your money.

 

[MuppetGate]

OK, let's get this "legally" nonsense out of the way. Apple is exploiting a loophole.

It reminds me of my friend's mom who is "legally" blind. She does not have a drivers license, but she does have a handicap placard and uses it quite often just for the sole purpose of getting a more favorable parking spot. Is what she is doing legal? Yes. Is it fair to others who are handicap and now have to park further because of one less handicap spot? No!

Unfortunately, nothing you said gets the world "legally" out of the way.

And it would be a good idea if the folk who think that Apple is being unfair took the time to read Apple's statement to the committee:

http://www.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf

Here's the interesting bit:

Apple has always believed in the simple, not the complex. This is evident in the Company’s products and the way it conducts itself. In this spirit, Apple has recommended to the Obama Administration and several members of Congress – and suggests to the Subcommittee today – to pass legislation that dramatically simplifies the US corporate tax system. This comprehensive reform should:
• Be revenue neutral;
• Eliminate all corporate tax expenditures;
• Lower corporate income tax rates; and
• Implement a reasonable tax on foreign earnings that allows free movement of capital back to the US.
Apple recognizes these and other improvements in the US corporate tax system may increase the Company’s taxes. Apple is not opposed to such a result if it occurs in the context of an overall improvement in efficiency, flexibility and competitiveness. Apple believes the changes it proposes will stimulate the creation of American jobs, increase domestic investment and promote economic growth.

I added the emphasis. The interesting thing here is that while this committee's purpose is to try to use public opinion to force Apple to pay more tax than it is LEGALLY required to do so, Apple' is trying to demonstrate that it sees the much larger picture.

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Lets just cut the B.S.

It's true that Apple isn't breaking the law by taking advantage of tax loopholes to avoid paying its share. And it's also true that it's up to the legislative branch to close those loopholes... but the problem starts with Apple itself and all those corporations that lobby for those loopholes to be put there in the first place.

It's not that Apple simply stumbled on some loopholes and innocently used them. They are part of the corporate mafia that put them there. And they don't have any intention to pay anything back for all the advantages they receive for doing business in the US.

And they know this.

Can you provide evidence of Apple lobbying to put this loophole in place? Google? Microsoft?

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I have no idea where their obligations end. But I am certain that their obligations extend at least as far as paying their fair share of taxes.

Given your posting history, I'm sure you'd like to believe that.

As with any corporation, their obligations extend as far as paying the least amount of tax they can and not a penny more. Anything else would be wasteful.

If they want Apple to pay more tax then close the loopholes; it's that simple.

 

[Ryan John]

There are way too many people here trying to justify this as acceptable. Just because a loophole exists does this mean you need to exploit it? Corporate greed should not out-way ethics, especially within the current economic climate.

Add this to the Foxconn PR fiasco and you get to see the true colours of the people in the boardroom. I'd love to know what the normal hard working folks that make up Apples rank and file think of this.

 

[808?]

Apple could pack up its corporate HQ and move it to another jurisdiction, leaving a small R&D center in Silicon Valley.

Apple to not breaking the current tax laws and taxing them more is not going to fix the US economy any faster.