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

[everything-i]

Apple don't seem to be using loop holes in tax codes, or at least this does not seem to be the issue. They are not trying to off shore profits made in the US like many corporates actually do. No they are simply leaving profits in the countries that they are made and paying those countries taxes. If they repatriate the money the US taxes it again so why would they do that? After all tax has already been paid on it. If Apple UK have already paid UK corporation tax on their profits to the UK why would that company then transfer the money to Apple US so the US can tax it again. None of this makes any sense at all but I suppose 'not making any sense' is something politicians (and tax laws) do frequently.

 

[VulchR]

This is not Apple's fault, for they have done what most big companies are doing, which is looking after the interest of their stockholders. However, the problem is that the wealthiest people in the US own most of the stock, so these tax loopholes are subsidizing the very rich at the expense of public services for everybody else. The sense of injustice should be aimed squarely at our tax laws, not at any given company.

It doesn't help that the US tax code is now more than 1000 pages and that as a multinational company it is easy to find some pathetic excuse of a country to act as a tax haven. We need to simplify the tax code so that a mere mortal can understand it, leaving no wriggle room for slime-ball lawyers and accountants. Then we need to crush tax havens like overripe mangoes, negotiating an international framework for taxing multinationals.

I heard an interview in which a business person expressed the opinion that governments need to adapt to the multinationals that they cannot control. I believe what should happen is that the multinationals should be made to adapt to the fact that internationally people are on to their scams.

 

[KPOM]

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.

At the end of the day, corporate taxes get passed on to customers in the form of higher prices, shareholders in the form of lower dividends, or employees in the form of lower wages. It would be far easier to eliminate the corporate income tax altogether and raise the capital gain and dividend tax rate on individuals to match the ordinary income rate.

Also, most countries don't tax worldwide income, meaning companies based in countries other than US can move their cash back home without paying any additional tax. The US is the outlier, which is why US corporations go to great lengths not to repatriate profits. The answer isn't to tax unremitted overseas earnings. If we did that, companies would move their headquarters to other countries (e.g. Canada, Bermuda, Ireland).

 

[KPOM]

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).

That's fuzzy logic. First of all, most of his stimulus was actually in "Bush's" last budget because it was spent before October 2009 (when the government's first fiscal year under Obama started). Also, "deficit reduction" to $800 billion a year is still higher than every year under Bush except 10/1/08-9/30/09 which included almost all the emergency spending (TARP, much of the Fannie Mae, GM, Chrysler, Freddie Mac, and AIG bailouts). Most of the TARP funding was given to big banks that really didn't need it (loan guarantees would have been sufficient to "restore confidence") and so it was no surprise when virtually all of it was repaid in 2009/2010. Meanwhile, hundreds of mostly small and regional banks who could have survived with some assistance got none and had to be shut down.

 

[-hh]

The answer to jobs, taxes, etc. is to simply make it easier to do business in the US. Fewer regulations, lower taxes, and less exposure to absurd extortionist lawsuits. No highest corporate tax rate, no Obamacare, no ADA, and on and on.

The above is highly tangential to the Apple testimony, but its IMO worth pointing out because every time a dozen people die from salads with E.coli contamination ... there's an outcry as to why "we" (the Nation) didn't prevent this somehow (increased regulation on food). And to bluntly illustrate with yesterday's tragedy in OK, where a tornado hit a school ... listen today for your friends/coworkers/family who will ask why there weren't tornado shelters built into these schools (that's just more tax dollars to be spent).

As I see it, Apple doesn't want to pay taxes for bringing their money they made outside of the USA to the USA...Why should they be forced to bring their money to the US if they made that money outside the US?

Yes, that's pretty much the summary point. It only comes up a a question at all because Apple's big enough to be a multinational corporation with revenues from dozens of countries...and this question has come up often enough before such that said countries have tailored their tax laws accordingly to address (and often, accommodate) such multinationals.

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?

Some will say that because of the classical "A corporation's duty is to maximize returns for their stockholders", they're obligated to at least look.



-hh

 

[macchiato2009]

someone at Apple should simply go to jail

 

[cmwade77]

I say if Apple broke no laws in doing this, then good for them.

Bottom line is taxes are too high on everyone as it is. It is our responsibility (both corporate and personally) to avoid them (legally) as much as we can.

Also, if Apple didn't do this, then the stock holders would be up in arms. So really, if no laws were broken, what did Apple do wrong?

Now, there is a simple way to fix this, abolish the entire tax code as it stands and charge a flat sales tax on everything sold (the sales tax not to exceed 15% for state and federal tax combined, once the national debt is pad off, this drops to 10% and it would require that it be paid off within 10 years or all elected officials will receive no pay until it is). Part of the new tax code would also state that the government cannot spend more than they brought in, in other words no borrowing anymore.

 

[spazzcat]

You fry the big fish first and then the dominos will all fall in place.

I'm willing to be bet Apple isn't even the biggest fish doing it.

 

[gnasher729]

Is what they are doing against the law?

In the US case, their laws say "if you make profits outside the USA, then you have to pay US taxes when you move the profits into the USA". In that case, leaving the money where it is isn't "exploiting a loophole". It is obviously intended that you don't pay tax if you don't move the money, and you do pay tax if you move it.

(Apple does other things that could be called "exploiting a loophole", but this one isn't. )

Tax avoidance is legal and is pure polemic chosen by my mercifully retiring senator.

That's the definition - if you reduce your tax payments in a legal way, it is called tax avoidance. If you reduce your tax payments in an illegal way, it is called tax evasion.

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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.

I don't think you have any evidence for that. And I wonder why Apple is paying $6bn taxes in the USA if they are unprofitable.

 

[drorpheus]

its funny that no one here seems to realize that itunes is a swiss based operation that Apple pays zero in tax on, yet everyone who makes money through itunes pays US tax. Apple is shady, why do you think they use $2 a week chinese labor? There sob story about not enough skilled workers is a farce, considering that skilled chinese worker is a 15yr old with a soldering template working 14hr days, and to add insult to injury alot of them are working internships with no pay.

 

[Bubba Satori]

someone at Apple should simply go to jail

For breaking what law?

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its always someone else's fault. The government vastly spends more then it takes in, and somehow, greedy corporations who make a profit, employ people, and run their business efficiently are at fault. Balance your own house first, stop spending what u don't have, stop blaming everyone else. Sorry, apple has a responsibility to its shareholders... Anyone can voluntarily pay more taxes if they choose.. Get your checkbook out and start writing checks to federal, state and local governments... I am sure the money will be well spent on important things... Just ask a politician, they will tell you.
Evil corporations? Corporations are made up of people... No different then the government... Our tax code is meant to make everyone a criminal. Having had my business just audited i can tell you the tax code is a mess. It resulted in a "no change audit" meaning i had paid my taxes as i was supposed to, but the amount of time and resources it cost is inefficient and waste of time. A centralized planned economy just makes for increased opportunity for fraud and mischief. The government picking winners and losers? I wont even start on the social injustice, prejudice, and empowerment. One nation, under god, indivisible, with liberty and justice for all... Us vs them... Rich vs poor, just divides and weakens our country... We should celebrate the successes in our country, not blame them for our individual inadequacies. http://www.youtube.com/watch?v=rwsx1x8pv_a

+1

 

[Starflyer]

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!

I would love to here your opinions on the "illegal" immigration issue in the US.

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It sickens me that the richest corporation in the world pay no taxes to nobody

Source?

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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.

So you didn't take any deductions on your taxes this year?

 

[iGrip]

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?

What most people do is to take straight forward deductions based upon the clear intent of the tax code.

What Apple does is to make complex, bizarre money transfers and to employ convoluted business structures in order to skirt the clear intent of the tax code.

 

[Starflyer]

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 is their fair share if they are already paying all the taxes required by law?

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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.

I can image what their shareholders think.

 

[jaison13]

all companies should pay a fair tax. if the governments wants them to then lower the rate and eliminate all loopholes. the rate is like 30% but even the most mismanaged companies probably pay 10% at the most. make it a straight 15% the gov ail bringing tos more money and it ail be fair.

hey government!! how about this while you're at it. stop subsidizing hugely profitable oil companies, and unhealthy food!! if you're gonna give subsidies to farmers give it to ones growing fruits and veggies!! trying to eat healthy can bankrupt you.

 

[Starflyer]

its funny that no one here seems to realize that itunes is a swiss based operation that Apple pays zero in tax on, yet everyone who makes money through itunes pays US tax. Apple is shady, why do you think they use $2 a week chinese labor? There sob story about not enough skilled workers is a farce, considering that skilled chinese worker is a 15yr old with a soldering template working 14hr days, and to add insult to injury alot of them are working internships with no pay.

Source?

 

[topgunn]

The biggest, most profitable companies in the US make more money overseas than they do domestically but they choose to leave their earnings abroad and use this capital to invest in other countries because it is cost prohibitive to bring it back stateside. The government could greatly increase tax revenues by lowering corporate tax rates.

 

[Rogifan]

So if Apple doesn't employ anyone in Ireland (what the senate is claiming) how come there are 72 job openings listed on Apple's website in Cork Ireland?

https://jobs.apple.com/us/search?#location&t=1&sb=req_open_dt&so=1&lo=0*IRL&pN=0

 

[iGrip]

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.

I said only that Apple is obligated to pay their fair share of taxes. Somehow, I think that i am not the one who is confused here.

 

[Fishrrman]

"Corporations in reality do NOT pay taxes. The taxes are paid by the shareholders. Less taxes, means more dividends or capital gains....which get taxed"

Nope. It's not the shareholders that pay.
It's the CONSUMERS, because corporations will raise prices to cover the taxes they must pay. The shareholders will lose little, if anything.

I'm sure when it's time for most [American] folks in this forum to do their taxes, they take the time to learn about deductions and get everything back that they're entitled to get back. Who will post the first reply that they willingly pay MORE in taxes than they need to?

If it's ok for an individual to take all legal steps (and to use "loopholes") to minimize his/her taxes, why is it not ok for a corporation to do the same?

Indeed, it's nothing less than the _duty_ of corporate management to the stockholders to take action to maximize overall revenue, and to minimize expenses. And "taxes" are just another expense that must be deducted to realize profit from revenue.

Even the article says that Apple hasn't broken any tax laws.
They've been diligent in _applying_ existing tax law insofar as their accounting is concerned.

Apple is doing what any other corporation does.
They're just doing a better job of it...

 

[Bubba Satori]

What most people do is to take straight forward deductions based upon the clear intent of the tax code.

What Apple does is to make complex, bizarre money transfers and to employ convoluted business structures in order to skirt the clear intent of the tax code.

What is bizarre and complicated about paying the least amount of tax that is required by law?

It's is exactly what individuals do.
You know, like avoiding taxes by moving money into retirement accounts to lower taxable income.

Geez kids, it's not rocket surgery.

 

[phillipduran]

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.

IRS: You're not paying your fair share burnside. You're taking advantage of the child loophole by having 5 kids and paying nearly no taxes!!!

You're corrupt for taking advantage of tax loopholes.

Loopholes are not wrong. It's working within the system.

I choose to NOT work and that would result in me not paying taxes. Is that a loophol?e

Taxes are a drain and they suck. Why do you all insist that we should strive to pay them?

 

[Huntn]

The point of this topic is that if you let them do it via tax code they will! We have only ourselves and legislatures to blame. Corporations are on a relatively free ride. I'm not saying Democrats are not to blame, but I KNOW Republicans love this. Why, I don't know... If you want a government that functions, you need revenue and large multinational corporations are cash cows, not the poor middle class.

 

[GoldenJoe]

There is a difference between tax avoidance and tax evasion. How many of you crying foul chose not to claim any dependents, exemptions, or expenses in order to pay more of your "fair share"? Did any of you write a bonus check to the IRS last month, or are you paying the absolute minimum tax you think you can get away with?

 

[iGrip]

What is bizarre and complicated about paying the least amount of tax that is required by law?

"The California-based firm has used a web of offshore entities — including three Ireland subsidiaries it said don’t have tax residency in any country — to cut some of its tax rates to 0.05 percent,..."

"One of those Apple subsidiaries reported $30 billion in net income for 2009-2012, yet filed no corporate tax return and paid no income taxes to any government during those years, "

"Apple also transferred economic rights for some of its intellectual property to its offshore affiliates in low-tax jurisdictions, saving tens of billions of dollars in levies,"

It's is exactly what individuals do.

No, it is nothing remotely like what individuals do, unless that individual is Leona Helmsley.