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Senate investigators: Apple sheltered $44 billion from taxes

tererun said:
Without the US market Steve jobs would be steve jobless. This is why they should be paying to help upkeep the place they sell so much stuff.
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I think without the US market Steve Jobs would be dead... You know... Because he's dead.
 
ReformCollege said:
That is something that I haven't exactly thought of. But at the same time, that is exactly what we are seeing in this country anyways. Countries like Apple moving money overseas and not paying taxes on it. Also, you have to consider, that foreign capital may withdraw earnings over a period of time,but it still represents an investment in domestic companies. Also, I get the hunch that the US would have less of a problem with foreign capital overwhelming domestic capital because most of the world's largest corporations are American anyways. I suppose the easiest fix here is to just reduce the corporate tax to a level like say 20% where companies like Apple have far less incentive to move money offshore. I agree with most of the rest of your points.
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So you are saying that they would go from paying next to nothing and be willing to pay 20%? On what planet? Apple and others have the perfect scam going on and in no way will they willingly move money back to the US when they can avoid paying taxes at all.

The problem is not the % tax rate, but the ability to move money via accounting rules across borders.

What Apple does, and others do is pretty simple and only available to such companies.

Say you have sales of 1 billion and after costs there is 200 million left. What these companies then do, is to add an administrative fee, usually based on royalties, good will or franchise rights, that is equivalent or near equivalent to the 200 million profit. Now this must be paid to a company registered in Ireland or other very low tax country and wupti, a profit of 200 million is now near zero.

Now some companies actually go beyond that and demand more than the profit, so that the company goes into the red... because then you can write off the loss.. aka a handout from the government.

So it is not the tax % that is the problem, but the country of registration issue. Apple is a US registered company but its subsidiaries are all registered in Ireland where they have negotiated (in the 1980s) a tax rate of 2%, but in reality pay nothing because the papers that state where they are tax liable, basically making most of Apple a country-less company.

To fix this is also quite simple.. make profit taxable in the country of the buyer and before "administrative fees" to a parent company.
 
CJ 2.0 said:
When the earnings are dividended out to US shareholders it is taxed.

And from an industrial policy perspective, additional corporate taxes on foreign earnings is just retarded.
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From an industrial policy perspective, all taxes on manufacturing are retarded.

Second, I see no rational reason why corporations or individuals should pay taxes on income derived outside of the US using no US based assets. It's one thing to use a US patent, it's another thing to have no US connection other than being part of the same firm.
 
PeteEU said:
So you are saying that they would go from paying next to nothing and be willing to pay 20%? On what planet? Apple and others have the perfect scam going on and in no way will they willingly move money back to the US when they can avoid paying taxes at all.

The problem is not the % tax rate, but the ability to move money via accounting rules across borders.

What Apple does, and others do is pretty simple and only available to such companies.

Say you have sales of 1 billion and after costs there is 200 million left. What these companies then do, is to add an administrative fee, usually based on royalties, good will or franchise rights, that is equivalent or near equivalent to the 200 million profit. Now this must be paid to a company registered in Ireland or other very low tax country and wupti, a profit of 200 million is now near zero.

Now some companies actually go beyond that and demand more than the profit, so that the company goes into the red... because then you can write off the loss.. aka a handout from the government.

So it is not the tax % that is the problem, but the country of registration issue. Apple is a US registered company but its subsidiaries are all registered in Ireland where they have negotiated (in the 1980s) a tax rate of 2%, but in reality pay nothing because the papers that state where they are tax liable, basically making most of Apple a country-less company.

To fix this is also quite simple.. make profit taxable in the country of the buyer and before "administrative fees" to a parent company.
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They don't pay next to nothing. They pay around 12% at the moment. And yes, maybe. An 8% reduction in taxes certainly doesn't have the same appeal as a 15% reduction. Maybe it isn't worth sheltering that extra $44B overseas if they could keep $35.2B of it instead of $28.6B. Maybe Apple decides that they can make up the difference by investing it in capital. Or maybe 20% is still too much, and 15% would be better. The point is, reducing the corporate tax is necessary if we want companies like Apple to keep their money in the US instead of sending it overseas.
 
ReformCollege said:
They don't pay next to nothing. They pay around 12% at the moment.
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No they dont. Last numbers show them paying under 2% in taxes overseas.

BBC News - Apple paid only 2% corporation tax outside US

And in reality it is even worse since in Ireland the actual % was something like 0.06%

How an Apple affiliate made $30 billion and paid no taxes - The Week

All of Apple's global sales go through AOI, which was set up in 1980 in Ireland, a low-tax country that gives Apple special treatment in the form of a negotiated 2 percent tax rate. AOI accounted for 30 percent of Apple's profits from 2009 to 2011. Another Irish subsidiary, Apple Sales International, earned $38 billion and paid $21 million in taxes in the same period, giving it an effective tax rate of 0.06 percent. When the income of all of Apple's affiliates in Ireland is tallied up, the company managed to shield $74 billion in profits from taxation from 2009 through 2012.
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And yes, maybe. An 8% reduction in taxes certainly doesn't have the same appeal as a 15% reduction. Maybe it isn't worth sheltering that extra $44B overseas if they could keep $35.2B of it instead of $28.6B. Maybe Apple decides that they can make up the difference by investing it in capital. Or maybe 20% is still too much, and 15% would be better. The point is, reducing the corporate tax is necessary if we want companies like Apple to keep their money in the US instead of sending it overseas.
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Have you even been following the debate? Apple does not need to take the money back to the US, not even to pay its freaking dividend.. They issued the biggest bond sale ever for a company not long ago, to pay their dividend because the stock holders complained that they had too much money on the books. They still have that money but also a butt load of debt now and now they can actually in the US (where the bonds were issued) write off the freaking debt so next year they will maybe get money back from the US tax payer.

And on the subject of profits in the US and what they pay.. sure they pay the most in taxes but they also have the highest profits.. but it is no where near the 32% they SHOULD be paying... and that is a fact! Mom and pop corner store pays far more than Apple in % of their profits than Apple... and that is just wrong.
 
PeteEU said:
No they dont. Last numbers show them paying under 2% in taxes overseas.

BBC News - Apple paid only 2% corporation tax outside US

And in reality it is even worse since in Ireland the actual % was something like 0.06%

How an Apple affiliate made $30 billion and paid no taxes - The Week







Have you even been following the debate? Apple does not need to take the money back to the US, not even to pay its freaking dividend.. They issued the biggest bond sale ever for a company not long ago, to pay their dividend because the stock holders complained that they had too much money on the books. They still have that money but also a butt load of debt now and now they can actually in the US (where the bonds were issued) write off the freaking debt so next year they will maybe get money back from the US tax payer.

And on the subject of profits in the US and what they pay.. sure they pay the most in taxes but they also have the highest profits.. but it is no where near the 32% they SHOULD be paying... and that is a fact! Mom and pop corner store pays far more than Apple in % of their profits than Apple... and that is just wrong.
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Their effective tax rate is around 12%. I'm saying the closer the theoretical corporate tax moves to the effective tax rate, the less incentive Apple has to send their money overseas.

Also, the mom and pop corner store pay their taxes on a 1099 form. They actually do not pay anything on the store if I'm not mistaken, but rather any profit they take is treated as their income.

Apple pays a corporate tax, AND then its senior managers have to pay a rate on their own person income tax.

That said, why can't we lower taxes for both of them?
 
ReformCollege said:
Their effective tax rate is around 12%. I'm saying the closer the theoretical corporate tax moves to the effective tax rate, the less incentive Apple has to send their money overseas.
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Only way you can prevent Apple sending their money overseas is to lower the tax rate to under 2%, which is beyond ludicrous. Fact is, most of Apples sales goes through a P.O.Box in a town in California or Nevada, where there is no taxes, and then is shipped overseas. The ability to send their profits overseas is the problem, not the tax rate.

Companies like Apple, Google, Microsoft and others who use these methods should be PUNISHED not rewarded for their actions. You and I cant avoid paying taxes but they can and they should be rewarded for that? Hell no.

Also, the mom and pop corner store pay their taxes on a 1099 form. They actually do not pay anything on the store if I'm not mistaken, but rather any profit they take is treated as their income.
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Not the point. Point is, a company that is not a multinational or as big as Apple, pays what it is suppose to, but Apple because it has the accountants and lawyers can avoid paying most taxes. Fact is that you need to be a certain size to be able to use these cheats and everyone else who aint that size and dont have the ability to use the cheats are paying their fair share and burden.

This is massive corporate welfare .. pure and simple.

Apple pays a corporate tax,
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It does not pay 32% or whatever the tax rate is.. far far far form it.

AND then its senior managers have to pay a rate on their own person income tax.
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Totally irrelevant. They are employees and pay taxes on their income as they should. It is still in % 10 times more than what Apple pays.

That said, why can't we lower taxes for both of them?
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Because stuff needs to be paid for. And since Apple does not pay the taxes that they should, then for **** sake fix that part and then see how much the over all tax burden can be lowered.

Point is, if the big corporations all paid what they should be paying instead of playing hide the profits world wide, then all our tax rates would be lower.
 
PeteEU said:
Only way you can prevent Apple sending their money overseas is to lower the tax rate to under 2%, which is beyond ludicrous. Fact is, most of Apples sales goes through a P.O.Box in a town in California or Nevada, where there is no taxes, and then is shipped overseas. The ability to send their profits overseas is the problem, not the tax rate.

Companies like Apple, Google, Microsoft and others who use these methods should be PUNISHED not rewarded for their actions. You and I cant avoid paying taxes but they can and they should be rewarded for that? Hell no.



Not the point. Point is, a company that is not a multinational or as big as Apple, pays what it is suppose to, but Apple because it has the accountants and lawyers can avoid paying most taxes. Fact is that you need to be a certain size to be able to use these cheats and everyone else who aint that size and dont have the ability to use the cheats are paying their fair share and burden.

This is massive corporate welfare .. pure and simple.



It does not pay 32% or whatever the tax rate is.. far far far form it.



Totally irrelevant. They are employees and pay taxes on their income as they should. It is still in % 10 times more than what Apple pays.



Because stuff needs to be paid for. And since Apple does not pay the taxes that they should, then for **** sake fix that part and then see how much the over all tax burden can be lowered.

Point is, if the big corporations all paid what they should be paying instead of playing hide the profits world wide, then all our tax rates would be lower.
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It's not irrelevant, its double taxation. Mom and pop stores only pay taxes on the income once. The corporations pay taxes on that income twice, because they are taxed on the profit and then taxed again when that profit is distributed.

Your not seeing the forest for the trees. Apple can't use money that it sends overseas for capital investment or to pay out as dividends. If our corporate tax was only 15%, they would have less incentive for putting money overseas that could otherwise be used to benefit the company. There are other ways to collect the same taxes from Apple without slapping a 35% corporate tax on them.

Besides, what is a company like Apple "supposed" to pay? Its completely arbitrary. I think Apple is "supposed" to pay whatever rate keeps their money invested in our country. Unlike you, who thinks that a company like Apple should be writing tens of billions of dollars in checks every year for our government's reckless spending habits.
 
ReformCollege said:
It's not irrelevant, its double taxation. Mom and pop stores only pay taxes on the income once. The corporations pay taxes on that income twice, because they are taxed on the profit and then taxed again when that profit is distributed.
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That is bull****. Paying wages to people or dividend to stockholders does not incur a tax liability on Apple but on the people it pays out too... It really pisses me off when people say such things... I remember when Starbucks CEO said to the British Parliamentary committee that Starbucks paid VAT... NO THEY DONT.. ****ing American right wing ideology.. it is the CONSUMER that pays the freaking VAT..

Your not seeing the forest for the trees. Apple can't use money that it sends overseas for capital investment
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Yes it can... just not in the US and since 90+% of all Apple activity (making stuff) is overseas then well..

or to pay out as dividends.
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Nope but as we have seen, the cash is not needed as it just takes out a massive amount of debt to pay the dividend.

If our corporate tax was only 15%, they would have less incentive for putting money overseas that could otherwise be used to benefit the company. There are other ways to collect the same taxes from Apple without slapping a 35% corporate tax on them.
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Not the freaking point and you know it. YOU pay a certain amount of taxes that you can not avoid.. if you try, you go to jail. Apple (and the like) should pay a certain amount in % in taxes, but thanks to loopholes, that are not available to you or most other companies, then they can move their profits out of a country of sale and to a less tax country and pay nothing in taxes. It is immoral and wrong.

Besides, what is a company like Apple "supposed" to pay? Its completely arbitrary. I think Apple is "supposed" to pay whatever rate keeps their money invested in our country. Unlike you, who thinks that a company like Apple should be writing tens of billions of dollars in checks every year for our government's reckless spending habits.
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Hell no, Apple is suppose to pay a certain % in corporate tax ...and it does not ... not even close.
 
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PeteEU said:
That is bull****. Paying wages to people or dividend to stockholders does not incur a tax liability on Apple but on the people it pays out too... It really pisses me off when people say such things... I remember when Starbucks CEO said to the British Parliamentary committee that Starbucks paid VAT... NO THEY DONT.. ****ing American right wing ideology.. it is the CONSUMER that pays the freaking VAT..



Yes it can... just not in the US and since 90+% of all Apple activity is overseas then well..



Nope but as we have seen, the cash is not needed as it just takes out a massive amount of debt to pay the dividend.



Not the freaking point and you know it. YOU pay a certain amount of taxes that you can not avoid.. if you try, you go to jail. Apple (and the like) should pay a certain amount in % in taxes, but thanks to loopholes, that are not available to you or most other companies, then they can move their profits out of a country of sale and to a less tax country and pay nothing in taxes. It is immoral and wrong.



Hell no, Apple is suppose to pay a certain % in corporate tax ...and it does not ... not even close.
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I didn't realize we had to tax Apple the company itself. Is Apple the company some trans-human species that takes on a life and mind of its own? The company is made by the people working for it, and any tax on its workers is a tax on Apple itself.

Maybe 90% of it is overseas because of the tax code. If lowering the corporate tax rate reduces this number to 80% overseas, I consider that a victory.

It is the fricking point. And there is nothing here that Apple is doing illegally. If I do everything I can to reduce my taxes without breaking the law, I'm not breaking the law. Don't blame me for maximizing my own rational self benefit, blame the system. You cannot rationally expect Apple to send 35% of its profits over to the Federal Government, and still expect it to invest in the US. Those two things are contradictory.

Morality is not applicable to a tax code. Efficiency and incentives are. In my opinion, the most efficient tax code is also the most moral because destroying wealth is immoral. Just my :twocents:
 
ReformCollege said:
I didn't realize we had to tax Apple the company itself. Is Apple the company some trans-human species that takes on a life and mind of its own? The company is made by the people working for it, and any tax on its workers is a tax on Apple itself.
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If Apple gave all profits to its workers.. then I would agree.. else it is just another far right wing hyperhole.

But lets play this game... how about we tax all companies 100% on profits, and everyone else pays not taxes? How does that sound?

Maybe 90% of it is overseas because of the tax code. If lowering the corporate tax rate reduces this number to 80% overseas, I consider that a victory.
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You know that is not true... it is because of wages and expertise.. no one in the US is willing to live in a 200 man/women dormitory for most of the year and earn a few dollars a day.... they are in China and Apple has to maintain its insane profit margin of 40% so they moved their production to China and elsewhere. But even that is changing and Apples profit margin is falling because the Chinese want more money in wages.. and that hurts. Eventually there will be no difference between Chinese and American workers..other than expertise and education of course.

It is the fricking point. And there is nothing here that Apple is doing illegally.
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Never said it was.. but it should be and that is the point.

If I do everything I can to reduce my taxes without breaking the law, I'm not breaking the law. Don't blame me for maximizing my own rational self benefit, blame the system.
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I am blaming the system, a system that companies like Apple have written for themselves. THAT is the point. You do realize that only Apple has a 2% tax burden in Ireland right? It is specially negotiated.., something that you or I cant get.. And that there are next to no employees in Ireland... great deal, being registered in one country and living 100% in another with the sun and babes... where can I get that deal? Oh I cant... unless I am extremely wealthy and base myself in a tax haven.

You cannot rationally expect Apple to send 35% of its profits over to the Federal Government, and still expect it to invest in the US. Those two things are contradictory.
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No they are not. You pay your taxes and invest your money in goods and services in the US.. why should Apple not do the same thing? Or GE, or Google? If you really think that the 35% tax rate prevents any companies or people in investing in the US.. then you sir are deluded. Taxes have never been lower in the US, and investment has tanked... it was much higher during the high tax years gone by. Not to mention very few corporations pay anywhere near the 35% corporate tax.

Morality is not applicable to a tax code. Efficiency and incentives are. In my opinion, the most efficient tax code is also the most moral because destroying wealth is immoral. Just my :twocents:
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Efficiency and incentives are must, but when the tax code is so lopsided and creates moral issues like this.. then you have a problem.

Listen no one likes paying taxes, but the rational people in the world know that taxes are a burden that we all have to deal with so that we can have roads, military, schools, healthcare and so on. That is part of life. And when someone or some company tries to fix the system so that they and only they can avoid paying their share of taxes, then you have a serious problem. What happens to Apple and other big multinationals is corporate wealth fare .. on top of the other handouts we the people / government gives them. It shifts the burden on to you and me so we have to pay extra in taxes to make up for the lost income from these very profitable rich companies. You are paying for their profits both by buying their crappy products but also via the tax burden you get extra on you because Apple is avoiding paying what it morally should be paying.

We have seen through out history, that when the few abuse the many that revolutions are started and the few are more than often killed off. The American revolution, French revolution and the Russian revolutions were basically a mass uproar against the few wealthy and the abuses of power by these. It can happen again, but this time around it is not only the politicians that are at risk but the CEOs of big corporations and banks that are sucking the life out of the masses for their own greedy purposes.

Let me ask you this.... lets say a fictive neighbor. He is say a certain religion and skin colour, and because of that he only pays 10% on his million dollar income, where as you as another religion and skin colour have to pay 40% on your 50k a year income. Note that nothing is illegal, since the tax law states that if you are a certain religion and skin colour then your tax rate is only 10% ... so let me ask you this... it is not illegal but is it fair and morally fair?
 
PeteEU said:
If Apple gave all profits to its workers.. then I would agree.. else it is just another far right wing hyperhole.

But lets play this game... how about we tax all companies 100% on profits, and everyone else pays not taxes? How does that sound?



You know that is not true... it is because of wages and expertise.. no one in the US is willing to live in a 200 man/women dormitory for most of the year and earn a few dollars a day.... they are in China and Apple has to maintain its insane profit margin of 40% so they moved their production to China and elsewhere. But even that is changing and Apples profit margin is falling because the Chinese want more money in wages.. and that hurts. Eventually there will be no difference between Chinese and American workers..other than expertise and education of course.



Never said it was.. but it should be and that is the point.



I am blaming the system, a system that companies like Apple have written for themselves. THAT is the point. You do realize that only Apple has a 2% tax burden in Ireland right? It is specially negotiated.., something that you or I cant get.. And that there are next to no employees in Ireland... great deal, being registered in one country and living 100% in another with the sun and babes... where can I get that deal? Oh I cant... unless I am extremely wealthy and base myself in a tax haven.



No they are not. You pay your taxes and invest your money in goods and services in the US.. why should Apple not do the same thing? Or GE, or Google? If you really think that the 35% tax rate prevents any companies or people in investing in the US.. then you sir are deluded. Taxes have never been lower in the US, and investment has tanked... it was much higher during the high tax years gone by. Not to mention very few corporations pay anywhere near the 35% corporate tax.



Efficiency and incentives are must, but when the tax code is so lopsided and creates moral issues like this.. then you have a problem.

Listen no one likes paying taxes, but the rational people in the world know that taxes are a burden that we all have to deal with so that we can have roads, military, schools, healthcare and so on. That is part of life. And when someone or some company tries to fix the system so that they and only they can avoid paying their share of taxes, then you have a serious problem. What happens to Apple and other big multinationals is corporate wealth fare .. on top of the other handouts we the people / government gives them. It shifts the burden on to you and me so we have to pay extra in taxes to make up for the lost income from these very profitable rich companies. You are paying for their profits both by buying their crappy products but also via the tax burden you get extra on you because Apple is avoiding paying what it morally should be paying.

We have seen through out history, that when the few abuse the many that revolutions are started and the few are more than often killed off. The American revolution, French revolution and the Russian revolutions were basically a mass uproar against the few wealthy and the abuses of power by these. It can happen again, but this time around it is not only the politicians that are at risk but the CEOs of big corporations and banks that are sucking the life out of the masses for their own greedy purposes.

Let me ask you this.... lets say a fictive neighbor. He is say a certain religion and skin colour, and because of that he only pays 10% on his million dollar income, where as you as another religion and skin colour have to pay 40% on your 50k a year income. Note that nothing is illegal, since the tax law states that if you are a certain religion and skin colour then your tax rate is only 10% ... so let me ask you this... it is not illegal but is it fair and morally fair?
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1. Companies do something with their profits. That something is usually taxable at one point or another. And it certainly is better then the money going overseas.
2. 100% tax on profits? Good luck with unemployment.
3. Productivity growth is slow in China, and wages have been rising pretty quickly. We are already starting to see the trend that it is no longer more profitable for everyone to make products in China compared to the US. Things are not black and white. Its a cost benefit curve. The more things we can do to increase the benefits of investing the US and lowering the costs, the more attractive we will be to companies.
4. What does Apple's tax code in Ireland have to do with the U.S.'s tax code? We didn't write Ireland's tax code. But I am more then willing to bet, if our corporate tax rate was lower, we would see less aggregate outflow of capital to other countries.
5. Who is paying the most taxes in this country?
6. You're right, it is unfair that people are paying different rates in taxes based on incomes and available deductions. Which is why we should have a flat tax. Problem solved.
 
obvious Child said:
Funny, you call yourself a "Conservative" but you advocate for a very anti-free market system.

Apple got away with not paying much taxes because it hired expensive lawyers and accountants to essentially find and create no nexus tax havens. You are praising what amounts to those with money can literally buy success over those without such funds. That we should encourage a very uneven playing field that favors those who will bend and possibly break the law over those who play within the rules.

I take it you were cheering for Microsoft as it actively engaged in anti-capitalistic behaviors to stamp out competition at the expense of the consumer?
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Let's fix you up on this. Apple got away with nothing, they followed the tax laws as written, not over paying, not under paying. They have a duty to the shareholders to not over pay, they could even be sued for not doing what's in the best interests of the people that owne Apple stock.

I'm not sure what you are talking about when you say it is "very anti-free market system". As the CEO said, they paid all the taxes they owed. I wonder if you look at you tax return and decide not to take legal deductions and pay more than you owe?

That would certainly be the exception, because I don't know anyone that looks to pay more than they owe.

I think we should be concerned that our tax rates for corporations is so high that companies have to take these extreme measures to pay what they owe.
 
How can Apple be hiding their money from the US government and yet everyone knows where it is.

If they broke a law, punish them but I don't see that any laws were broken.
 
Moot said:
Do you think the government should protect your rights for free?
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I don't agree that the government protects my rights. I feel they routinely violate them.
 
So it seems we agree after all. Does it not bother you that these criminals were exempted for reasons of wealth alone?


jonny5 said:
They should be. A crimes a crime.
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TheDemSocialist said:
Yes. Since the government has the power to tax then yes.
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Using existing tax law to avoid taxes is not illegal. This is another side show to shift attention away from the many recent failings of the administration.
 
You don't agree that money laundering took place? Apparently they confessed and paid a fine (instead of going to prison like your or I would have) so are you saying they were innocent?

jonny5 said:
I dont agree that it was happened.
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