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Government The Almighty Buck Apple

How Apple Sidesteps Billions In Global Taxes 599

An anonymous reader writes "An article at the NY Times explains the how the most profitable tech company in the world becomes even more profitable by finding ways to avoid or minimize taxes. Quoting: 'Apple's headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company's profits, Apple sidesteps state income taxes on some of those gains. California's corporate tax rate is 8.84 percent. Nevada's? Zero. ... As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world. ... Without such tactics, Apple's federal tax bill in the United States most likely would have been $2.4 billion higher last year, according to a recent study (PDF) by a former Treasury Department economist, Martin A. Sullivan. As it stands, the company paid cash taxes of $3.3 billion around the world on its reported profits of $34.2 billion last year, a tax rate of 9.8 percent."
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How Apple Sidesteps Billions In Global Taxes

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  • by Anonymous Coward on Saturday April 28, 2012 @08:23PM (#39834399)

    Good citizens pay their fair share, so it must be asked: why does Apple hate America?

    • Re: (Score:3, Insightful)

      by MacDork ( 560499 )
      But my capital gains have already been taxed once!! Er...
      • by the eric conspiracy ( 20178 ) on Saturday April 28, 2012 @08:40PM (#39834533)

        No they haven't. They probably haven't been even taxed once.

        Your dividends have been, sort of....

        Personally though I don't think corps should be taxed at all. It gives them too much ammo to say things like 'taxation without representation' etc.

        If we didn't tax corps then I think it would be easier to ban political speech by corporations.

        The income to individuals from corps would then be taxable as ordinary income and we wouldn't have the whining about dividends being taxed twice, or the baloney about US taxes on corporations being high.

        We also wouldn't have the baloney regarding local jurisdictions competing for corps based on tax give backs.

        All in all it would be a nicer world....

        • Re: (Score:3, Interesting)

          by Stewie241 ( 1035724 )

          Meh. If it wasn't tax give backs it would be other incentives to encourage companies to create jobs.

          • by AngryDeuce ( 2205124 ) on Saturday April 28, 2012 @11:12PM (#39835203)

            it would be other incentives to encourage companies to create jobs.

            You mean, outside of the profit they earn on our labors? That not enough incentive anymore, now the taxpayers have to kick in a little extra, too?

            God, what I would give to have a government with the sack to tell these extortionist fucks to go pound sand. Think Apple is going to risk the boycotts and bullshit if they fired all their employees? I doubt it very fucking much...

            Steve Jobs benefited from all the things taxpayers fund growing up, just like all of us did. He wasn't raised by wolves in the fucking forest, he grew up in California, the nanny state to end all nanny states, and all those things these assholes bitch about today played a part in making him who he was, as successful as he was. Now that the company is successful, what, they have no moral obligation to pay it fucking forward?

            I mean, that's what all this shit comes down to. These guys stood on the shoulders of who knows how many giants before them, giants that were subsidized by the tax dollars of the people of this country, and now that it's their turn to give a little back, they want to cry and complain about how unfair that idea is and do everything they can to hide their profits. It's no different than knowingly hiring illegals in this fucking country. People that do that shit, and play these fucking games where they only get paid a dollar on fucking paper so they don't have to pay taxes...they're doing more harm to our country than ANY fucking terrorist or gang member or welfare queen, and we all know this, so why the fuck are we playing this game?

            • Backwards Anger (Score:4, Insightful)

              by drainbramage ( 588291 ) on Saturday April 28, 2012 @11:35PM (#39835313)

              I wanted to mod you up, I enjoyed your passion, but I so want you to look at your reasoing.
              I am not defending Apple, it is about time you all noticed that Apple is given a pass by the media for using the legal loopholes that other companise are villified for.
              Where do you git off blamming Apple or any other corporation for the disgusting acts of congress and the senate?
              Those insane loopholes were mostly created years ago and are constantly polished by your elected officials to continually encourage donations to those self same public officials.
              You want to blame the person responsible?
              Look in the mirror, then start voting like the future matters.

              • Re:Backwards Anger (Score:5, Insightful)

                by AngryDeuce ( 2205124 ) on Sunday April 29, 2012 @12:32AM (#39835567)

                Oh, believe me, I know that Congress and the Senate voted for these fucking loopholes, but that's not a valid excuse for this crap. You don't think that Steve Jobs knew that he was paying an effective tax rate well below the entry-level guys he had working 70 hour weeks? This is a guy that parked in handicapped spaces looooooong before he actually got sick we're talking about here. [edibleapple.com] He rationalized it as "Horray for me, fuck everyone else", and that's a trait you see a lot among these 'Master of the Universe' types. People all over the world metaphorically polish his knob every time the subject of Apple comes up, but rarely do people talk about what an unbelievable prick he was [politicsnotasusual.com], and I don't just mean the way he treated his employees, he treated everyone that way.

                Yes, congress passed laws allowing these companies to do this shit. Congress didn't make them move their "offices" to tax havens all over the world. They didn't make them send all that money to banks in the Caribbean to hide it from the IRS. Nobody forced them to be leeches, sucking in subsidies while raking in billions. Apple's sucking up $30 million in Texan taxpayer dollars [theatlanticwire.com] despite the fact that they are literally the most valuable corporation in the fucking world [macstories.net]. They've got $10 Billion (with a b) in cash in the bank, and they still need Texans to cough up a little extra to build that fucking plant? Come the hell on. That's the extortion bullshit I'm talking about. They're taking $30 million from who knows how many social programs, schools, infrastructure...and in exchange we get what? The privilege of working for them so they can earn more money off of our labors?

                I mean, an unemployed mother looking for food stamps, she's a fucking leech on society, but the most valuable corporation on earth gleefully taking huge transfers of wealth from public coffers into their private accounts is what? A goddamn pillar of the community? A company to admire? Please. They're the real leeches. Let these mother fuckers move their corporate offices to fucking China, or better yet, let them take their shit and go to Africa, far from these pesky taxes and everything else. I don't really much give a shit, but I'll be damned if I'm going to sit here and subsidize their goddamn profit margin while half the houses in my neighborhood are sitting fucking vacant because the families that lived in them lost their jobs and then lost their homes, and then, when they hit the lowest point and have to go get some sort of assistance to make sure their kids eat decent food, get called "parasites". Fuck that shit. You want to see the real parasites, go fucking read Forbes.

              • voting isn't enough (Score:5, Interesting)

                by bzipitidoo ( 647217 ) <bzipitidoo@yahoo.com> on Sunday April 29, 2012 @02:23AM (#39835913) Journal

                Vote? Even if there were real, viable choices, have to do more than vote. The Democrats are only slightly better than the Republicans. Democrats are merely corrupt. Republicans are corrupt and crazy. Don't think voting is enough to excuse you from being reflected in that mirror. Politicians can't afford to be honest if we won't back honest players.

                I see people still banking at Bank of America, Chase, Wells Fargo, and Citi. Still buying from Apple, Microsoft, MAFIAA members, GE, BP, AT&T, Comcast. Still gambling that health insurance won't deny and drop us the minute we need it. We could destroy these companies astonishingly fast if we'd all just quit doing business with them. They wouldn't be so stupid as to push it that far. In mere days, they'd crawl on their bellies begging us for forgiveness, and they would quickly do all those things that they claim are so difficult to do, such as paying taxes, resisting the temptation to buy legislation, reducing executive compensation, treating customers fairly, and making up for mistakes. They do appalling things, and people shrug it off, or bend over and take it.

                I'm in a little battle with a local city. They're operating one of those red light cameras programs. Naturally, they have rigged things to cause lucrative violations, rather than reduce them. They carefully chose intersections for which the yellow was already too short so they could truthfully claim they didn't shorten any yellows. How can I make them wish they hadn't done it? I went to a hearing with evidence that their yellow lights were too short, but no joy. Judge told me I could take up the matter at a later date in municipal court, as if going to a hearing scheduled at their pleasure wasn't already enough of an imposition on me. I declined. Now I don't shop in that city anymore. How many people have joined me in this boycott? Zero of course. I've tried to persuade others, but all that does is get them thinking I'm crazy for making such a big deal out of a petty traffic violation. A few concede that I've got a point, but still won't do anything. I should pay up, shut up and stop annoying others with my whining, and get on with life. Then some turn around and mutter about their cell phone contracts, or the cost of cable TV. Even the ones who also have been burned by these red light cameras still won't fight. Some even rationalize it, convincing themselves the system is fair.

                An effective approach to clean up bad neighborhoods is a zero tolerance enforcement and clean up operation. Litter, graffiti, broken windows, and burned out lights no matter how trivial are all cleaned up and repaired as fast as possible. Serves notice that petty crime is not going be overlooked. The same would work against these corporations and governments. Don't let a red light camera ticket go because it's only a little money, and too much trouble to fight. We blow off even the most insane EULAs because we feel pretty good that most of the nonsense in there can not be enforced. We should instead make software companies clean that crap up. No EULA at all. At least we fight back against DRM.

                • by boorack ( 1345877 ) on Sunday April 29, 2012 @01:21PM (#39838315)

                  I only partially agree with this. Starving big corps was possible few years ago. Then 2008 meltdown came and it became apparent that if they won't get money from you voluntarily paying for some goods/services, they'll get it anyway from you taxes (eg. bailouts), lucrative taxpayer-funded contracts (army) or by forcing bills for phony services down your throat (eg. Obama's healthcare 'reform').

                  Add ever-rising intimidation of citizens to this (TSA, so called "war on terror", militarization and brutalization of police forces, ever-rising incarcerated population), add dual-standard when it comes to law enforcement (Corzine/MF Global fiasco etc.) and what you get at the end is corporate fascist state. So much for freedoms and constitution.

                  If those corporate fucks won't get what they want from you voluntarily, they'll get it by other means. I'm not sure there is a good way to get out of this trap - peaceful civil disobedience is propably the only thing left.

            • I don't know that I disagree with anything that you said. But I think you missed the point of what I was saying.

              Apple et al are companies that are about profit and making money. One of the side effects of these companies setting up shop in a town is there is some level of job creation and economic benefit. It is all about supply and demand, really. My main point was that taking away the possibility of tax incentives will not solve this problem because if competition is large enough and regions see it as

        • by Anonymous Coward on Saturday April 28, 2012 @10:26PM (#39835013)

          Taxing corporations is important for two reasons. The first obvious reason is that it raises revenue for the state. The second is that if you tax corporate income, then it is in the corporation's best interest to minimize income - i.e. to not pile up wads of cash as Apple is currently doing. It's not money per se, but the velocity of money, that moves the economy. Fat cats getting fatter is bad economics - unless you're the fat cat or one of their apologists of course.

          • The second is that if you tax corporate income, then it is in the corporation's best interest to minimize income - i.e. to not pile up wads of cash as Apple is currently doing.

            Income. Savings. I think you might want to look up the definition of each...

        • by Anonymous Coward on Sunday April 29, 2012 @12:10AM (#39835475)

          If we didn't tax corps then I think it would be easier to ban political speech by corporations.

          Let me explain why that isn't a good idea. Corporations are given rights under the law, not as entities themselves, but as an extension of the collective rights of the individuals that it is composed of. A corporation is formed by a group of individuals agreeing to pool resources to achieve a goal. So let's take a look at how that can play out.

          You have a right to say "Screw the Government." So does your best friend. If you pool resources to say it (e.g. you make a sign, he drives you to city hall), you both still have that right. If you agree formally to do the same, you still have the same rights. 1,000,000 people signing an agreement that they have joined the "Screw Government Organization" to send 1,000 of them to DC to protest doesn't diminish the right. Forming a group to sell "Screw Government" bumper stickers doesn't reduce the group's rights to less than that of any individual. Forming a group that sells indy band bumpers stickers, and the occasional political bumper sticker, doesn't diminish the collective rights. Calling the group a corporation doesn't change things either. The name, size, profit motivation, etc do not change anything.

          An so on. The basic rule is the rights of individuals can be exercised collectively. One name for this phenomena is "Corporations are people." Not a person. Though for simplicity, it's treated like a person. Because the rights of a person and the rights of a group are the same. For example, a person can own property and so can a group.

          Ok, there are some exceptions. For instance, while a person can hold office, a group cannot. Same with a vote. Some rights do not scale and can't be collective. But most can.

          So now look at your suggestion. How much can you restrict the rights of a collection of people without restricting the rights of individuals? Pretty difficult. Not something to be done lightly.

          • by blackraven14250 ( 902843 ) on Sunday April 29, 2012 @11:16AM (#39837625)
            The problem is that a corporation, unlike a massive grassroots protest, is largely controlled by the wealthy, and will be used in most instances to further the goals of those at the top, rather than the group as a whole. This give the impression that a company's entire workforce (10,000 people) is pushing for something, when in reality it's the C-level executives and the board (30 people) who are the ones benefiting from it. There are sure to be instances where what the 30 are pushing for is a boon to the entire company, but there's also the likelihood that a significant portion of stances taken "as a corporation" will be done in the advancement of only the 30.
      • Your money has already been spent before too. Guess it is worthless.

    • These are corporate profits. Whoever actually owns the company still gets taxed on any of the value that they sell or get dividends on. So apple's rate may be 9.8%, but most people who get the remaining 90% still pay more taxes. Just not usually in the same year.

      • by Dahamma ( 304068 )

        Apple hasn't paid dividends on any of their massive profits so far (though that is changing in the future). Even when they will, it will be a TINY fraction of their net income.

        And capital gains taxes on investments has little to do with the profit of a company. Plenty of companies don't make a profit and their stock still goes up (since stock price reflects expected value, not current value). And you can make money selling a stock short when it goes down, which has even less to do with the company's pro

    • by PhunkySchtuff ( 208108 ) <kai@nOSpaM.automatica.com.au> on Saturday April 28, 2012 @08:29PM (#39834459) Homepage

      Why should anyone have to pay more tax than they're required to by law?

      Corporations have more loopholes than natural people to reduce the amount of tax that they pay, but even normal people have a number of ways that they can minimise the amount of tax that they're required to pay. If these methods are perfectly legal, then why would you not avail yourself of them?

      Would you voluntarily pay more tax than you are legally obliged to?

      Furthermore, I can absolutely guarantee you that Apple are not the only company doing this, they're just the flavour of the month and they generate page views around here. s/Apple/Microsoft/g, s/Apple/IBM/g or s/Apple/Google/g or pretty well any other large company at all and the story will read the same.

      • Re: (Score:3, Insightful)

        by MrKaos ( 858439 )

        Why should anyone have to pay more tax than they're required to by law?

        Tax avoidance is different from maximising your tax entitlements under law. This is clearly avoidance.

        Corporations have more loopholes than natural people to reduce the amount of tax that they pay, but even normal people have a number of ways that they can minimise the amount of tax that they're required to pay. If these methods are perfectly legal, then why would you not avail yourself of them?

        Minimising your tax obligation according to your entitlements is legal and expected. Tax avoidance by setting up tiny offices in places with favourable tax laws to collect revenue is a deliberate construct made to avoid paying tax to the community, not a loophole.

        Would you voluntarily pay more tax than you are legally obliged to?

        The key word here is "obliged". I meet my obligation under law. If a company want to operate with all the benefits my state provides then why is i

    • by Shoten ( 260439 ) on Saturday April 28, 2012 @08:32PM (#39834481)

      Wake up. Almost all corporations do this. HP does this. IBM does this. Dell does this. It's not called 'hating America,' it's called 'loopholes.' If you were beholden to shareholders and you were in charge of a corporation, you would do it too, I bet. And if not...you would never be in charge of a corporation for long.

      • by iamhassi ( 659463 ) on Saturday April 28, 2012 @11:09PM (#39835195) Journal

        Wake up. Almost all corporations do this. HP does this. IBM does this. Dell does this. It's not called 'hating America,' it's called 'loopholes.' If you were beholden to shareholders and you were in charge of a corporation, you would do it too, I bet. And if not...you would never be in charge of a corporation for long.

        Completely agree. Apple is actually far better than most: many companies pick up and move all their people to a cheaper part of the US or worse, move all operations overseas, bringing only the best and brightest and outsourcing the rest.

        California is still making billions in taxes off Apple, with 13,000 employees at Apple Campus [wikipedia.org] and all the property taxes and money the employees spend generates sales taxes. Just be glad Apple is in California at all because how many phone manufactures still keep 13,000 employees in the US? Apple sells phones, computers, tablets, and a online store, they could be in the middle of China employing 13,000 people if they wanted and we would still buy iPhones.

        Apple is probably the worse possible company to choose as an example of a "tax dodge". Why don't you go after Samsung, HTC, or any of the other phone manufactures that make billions in sales in the US market but have all of their operations based overseas.

        • Why don't you go after Samsung, HTC, or any of the other phone manufactures that make billions in sales in the US market but have all of their operations based overseas.

          Maybe because they actually manufacture all that stuff overseas? The products they sell in US, those have sales tax paid off them, which is fair. But if they don't really have any substantial design, development or production here, why should they pay taxes here (from a moral perspective, not legal - legal is a world of its own which doesn't mesh well with common sense)? Heck, Samsung doesn't even trade its stocks anywhere outside Korea.

    • by mcavic ( 2007672 ) on Saturday April 28, 2012 @08:34PM (#39834499)
      As long as they're doing it legally, there's nothing wrong with playing the game by the game's rules.
    • by caseih ( 160668 )

      This was rated +5, Funny, right? Oh wait... are you serious? Look, corporations don't pay income taxes of any kind. Every last penny of income tax is passed on to me and you, the customers/consumers. So in reality taxing corporations is a bizarre form of consumption tax. I think a strong case can be made for eliminating corporate income tax in general, but closing personal income tax loopholes where individuals can hide income and assets in corporations. Trying to make Apple pay their "fair share," is

  • by alen ( 225700 ) on Saturday April 28, 2012 @08:23PM (#39834407)

    Just imagine all the mandates they can fund if they had all this money

  • by DreadfulGrape ( 398188 ) on Saturday April 28, 2012 @08:27PM (#39834435)

    Good for Apple.

  • by sam_paris ( 919837 ) on Saturday April 28, 2012 @08:27PM (#39834443)
    I mean, I know it's the fashion to bag Apple now they're the biggest company in the world, but I thought it was common knowledge that virtually all big companies do everything they can to avoid taxes. In fact, I don't see how it's much different from pretty much every individual in the USA trying to pay as little tax as possible either. If an accountant said, "Oh hi there, I can help you avoid $3000 bucks in taxes and it's all legal" what would you say, no?
    • by Fjandr ( 66656 )

      People are essentially pissed off because the more money someone (or something, in the case of companies) has, the more options they have.

      Ordinary people, by-and-large, do not have the money to take advantage of loopholes designed to protect a lot of money since the upfront costs outweigh what they'd save. However, they also rarely even bother exercising the options they have in front of them to stop paying taxes almost completely (charitable donations, medical savings accounts, educational savings accounts

    • by sl149q ( 1537343 )

      In point of fact Apple would find itself sued by shareholders if they did not use any and all methods to reduce tax and increase shareholder wealth.

      Adjusting ones affairs to avoid taxes (tax avoidance) is legal.

      Evading taxes that are due (tax evasion) is not.

      Sometimes its a fine line and thats why corporations like Apple spends mega bucks on tax accountants and lawyers specializing it this.

    • by khipu ( 2511498 )

      As a US citizen, you can not reduce your income tax by moving abroad. Furthermore, individuals generally impose fewer costs on the government as they become richer, but companies impose higher costs as they get bigger.

      And just because it is legal doesn't mean it is ethical, and the point of these kinds of examples is usually not to ask an entity to voluntarily pay more, it is to talk about raising taxes on it in the future.

  • Without such tactics, Apple's federal tax bill in the United States most likely would have been $2.4 billion higher last year

    No, it would be the same as it is now, they'd just locate their facilities elsewhere. Whoever wrote this is an idiot who doesn't know anything about how businesses make decisions.

  • by sycomonkey ( 666153 ) on Saturday April 28, 2012 @08:28PM (#39834453) Homepage
    Apple has a fiduciary responsibility to avoid as much taxes as legally possible. This is more indicative that the laws are not written correctly, rather than that Apple is doing something "wrong". Of course, congresscritters might be hesitant to fix these loopholes, since a lot of their sponsors directly benefit from them. In fact, that may or may not be why they are there in the first place, but the saying "don't attribute to malice what you can attribute to incompetence" probably holds here.
    • by Ritz_Just_Ritz ( 883997 ) on Saturday April 28, 2012 @09:03PM (#39834683)

      Hate the game indeed. The whole system is rigged to favor the fat cats. Obama's "job czar"??? Jeff Immelt, as CEO of General Electric, has orchestrated a situation where one of the largest employers in the US and generator of billions in profits pays a pittance (if anything at all) in US corporate taxes.

      Republican...Democrat....they're all for sale to the highest bidder. And people just wink at that while the media waves their hands about who Kim Kardashian is blowing this week. zzzzzzzzzz.....

  • Yawn.. lets examine MS or IBM, or any major global company. about 10% tax? sounds a little high, there are business execs who pay 5%.

  • this is truly shocking news, I must warn the masses!
  • Oh Look... (Score:5, Insightful)

    by whisper_jeff ( 680366 ) on Saturday April 28, 2012 @08:37PM (#39834509)

    Oh look, another story that is actually about virtually every major company in existence but it's turned into a story by replacing "every company" with "Apple" to make it sensational and generate page views. *yawn*

  • Similar to organic food, the US Treasury could offer companies a stamp for their products indicating they pay their share of taxes. It could be a picture of people dumping te--cash into a harbor.
  • Cue the red/blue cultural war in 3...2...1...

    One thing that makes me nervous about too much concentrated wealth is that orgs and zillionaires use it to buy political influence such that we no longer are a democracy. This is one reason why a larger portion of our GDP has been gradually shifting toward the wealthy since WW2.

    If one can find a way to put a check on this, then I wouldn't be so nervous about it. The Citizen's United ruling didn't help.

  • Wait, what?!?! (Score:4, Interesting)

    by Rytr23 ( 704409 ) on Saturday April 28, 2012 @08:45PM (#39834577)
    Wait.. Apple paid ~10% in federal taxes? But I thought 'Merica had the one of the highest corporate tax rates in the world and companies were fleeing to banana republics to avoid them!!
    • Except it turns out that the number in the article is bogus. According to this article [theregister.co.uk] the reason that Apple's tax rate appears so low is because they based their quarterly estimated taxes in the U.S.2011 on their 2010 profits (as the law requires) and saw a major increase in their profits in 2011. They will pay a balancing payment in 2012 for the amount that there quarterly tax payments in 2011 fell short of meeting their tax obligation. It will be a pretty hefty payment as well, since their profits approx
  • by jejones ( 115979 ) on Saturday April 28, 2012 @09:32PM (#39834833) Journal

    "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."

    Now, you may think the law should demand more. I would disagree with you. I don't resent Apple their ability to avoid taxation, any more than I would resent a friend who managed to escape a thief or mugger with minimal damage or loss.

  • So, the story is... (Score:3, Interesting)

    by jcr ( 53032 ) <.moc.cam. .ta. .rcj.> on Saturday April 28, 2012 @10:06PM (#39834955) Journal

    Apple's legal and finance departments know their stuff, and the company is fulfilling its fiduciary duty to the shareholders (like me). I don't see why the legacy media dregs at the NYT have any issue with that, but who cares what they say?

    Every dollar that Apple can keep out of government's hands is a dollar that won't be spent on killing people I have no quarrel with, paying goons to grope old ladies, or harassing terminally ill patients who need pain relief.


    • Or building your roads. Or educating kids. Or paying people to make sure Johnson & Johnson don't leave metal shards in your tylenol. Or making sure that insurance companies pay you when they owe you money. Or employing cops to keep your neighborhood safe. Or keeping companies (such as Apple) from dumping toxic byproducts into your drinking water. Or making sure water-bottling companies sold clean water if a company DID poison your local water. Or maintaining airports and coordinating their traffic.

      But e

  • by JosephTX ( 2521572 ) on Saturday April 28, 2012 @10:06PM (#39834957)

    It's not like Apple's the only corporation guilty of evading criminal amounts of taxes. Google never pays higher than 5%, News Corp never pays more than 2% (the same guys who use Fox News to complain about taxes being too high on the rich), General Electric paid nothing and got $3 billion in tax credits, oil companies receive stupid amounts of subsidies, Amazon still ignores most sales taxes, Microsoft always pays in the single digits as well; the list goes on and on and on. Over 2/3 of major US corporations have NO tax liabilities.

    Yet these same corporations still pay MOST of the taxes they owe in other OECD countries. The difference between the US and the rest of the developed world is that we're the only country with a tax system that considers GLOBAL business activities liable to taxation (obviously there are exceptions in other countries, such as INCREASED taxes for foreign employment or pollution). Other OECD countries only tax businesses based on DOMESTIC business activities. But in order to avoid having our global taxing system cause foreign business activities from having negative net profits from piled tax rates, Congress throws in a bunch of loopholes to negate the whole thing. Only it ends up negating almost all taxes on domestic activities too. This isn't an accident.

  • by Beelzebud ( 1361137 ) on Saturday April 28, 2012 @10:16PM (#39834987)
    and have the arrogance to think you don't owe anything to anyone.

    Sums up a lot of what's wrong with things, ATM.
  • by Osgeld ( 1900440 ) on Saturday April 28, 2012 @11:45PM (#39835353)

    Really? Apple is not the only company who does this to leech every single cent it possibly can without "playing fair", but besides that this is the company who's douche in chief would buy a new car every 6 months just to avoid whee taxes, or denied claim for years on his own daughter living in pretty poor conditions even going as far as saying

    "sterile and infertile, and as a result thereof, did not have the physical capacity to procreate a child."

    partly to not pay up, partly because he had zero responsibility to anyone but himself. You think he gave a shit about federal taxes, or what corporate culture that grew into?

    Why bother changing now, nothing has been done, nothing will be done, apparently it works, and the second anyone suggest's that they pay up it gets spun into "killing American companies/jobs with the ternary of socialism"

    now get off my lawn

  • Not doing this would be a breach of fiduciary duty. As a shareholder, I would not approve them putting themselves at a competitive disadvantage by not using tax optimization permitted by law. As a citizen, I want the loopholes closed, however, so that everyone plays by the same rules.

  • by MtViewGuy ( 197597 ) on Sunday April 29, 2012 @07:53AM (#39836847)

    Here's the simple reason why corporations engage in the behavior outlined in the New York Times article: _our income tax system based on Title 26, the Internal Revenue Code, encourages such activity_.

    Thanks to all those complicated loopholes in the Internal Revenue Code and all the additional rulings that add up to around 70,000 pages of tax code, this is why you have millions of jobs, thousands of factories, hundreds of corporate headquarters, and possibly as high as US$15 TRILLION (!!!) in American-owned liquid assets out of the USA for tax avoidance reasons. Maybe it's time to gut the entire tax code and start all over again in one of two ways:

    1) A 17% flat-rate no-loophole income tax, where the only loophole is a very generous initial earned income (wages and pensions) exemption to protect lower-income taxpayers (e.g., as high as US$46,000 for a two-adult/two legal dependent family), and get rid of the alternate minimum tax, estate tax, maybe the FICA tax, gift tax, marriage penalty, self-employment tax and taxation on bank account interest, capital gains and stock dividend payments. This is what Steve Forbes proposed back in 1996.

    2) Completely phase out the income tax in favor of a 23% national consumption tax on all new goods and services sales, where business-to-business sales, used good sales, and college tuition are exempt from the tax. To help lower-income people, any legal household will get a monthly payment to cover the cost of the tax up to the Federally-defined poverty level (US$580 per month payment for the family I mentioned earlier). This is the FairTax proposal, H.R. 25/S. 13.

    Under both of these proposals, American companies have all the incentive to keep as much of their liquid assets and operations in the USA as possible, since it is tax-advantageous to do so. An it also means vastly lower yearly tax compliance costs, meaning hundreds of billions of dollars spent per year in tax compliance are now freed up for more productive activities. In short, such a change will result in the next American economic boom.

I've got a bad feeling about this.