NY Times Apple Tax Article Flawed 193
bonch writes "Forbes contributer Tim Worstall points out that the NY Times article claiming Apple pays less than 10 percent of its profit in taxes was based on a flawed assumption of the corporate tax system. The 9.8% figure came from Greenlining Institute, who compared Apple's 2011 profits to taxes calculated according to 2010 profits. In the corporate tax system, estimated quarterly tax payments are made based on the previous year's profits until actual profits are calculated at the end of the trading year, when the balance is then paid to the IRS."
So what? (Score:1, Insightful)
Saying NYT made an incorrect calculation and explaining why is fine. But what was Apple's tax rate, then?
If you can't answer that, then you can't say the figure itself is incorrect, only the means used to arrive at it.
Comment removed (Score:4, Insightful)
Re:Whatever Apple's paying (Score:4, Insightful)
Why? That just encourages them to move more and more of their operations overseas because they can't stay competitive if the US charges them 28% but their competitors pay a fraction of that elsewhere.
Furthermore, corporations just have to raise prices, so in the end consumers pay for it. And they pay for it in a regressive way.
And assuming you work for a corporation, those 28% that "you" paid was actually paid by your employer, because that's where all your money comes from.
Corporations should pay taxes proportional to the costs they impose on the community. Most of those are imposed through labor, and that's covered by the income tax. If they impose additional costs, they should pay for it. But just trying to milk them because you can makes no sense and only hurts people.
Re:Tax on Profit vs Revenue (Score:4, Insightful)
It's not unfair at all. Anyone can incorporate. Funnel your income through the corporate entity and enjoy what the Apple stockholders do - double taxation. Of course, like Apple, you can write off business expenses prior to being taxed the first time. You can also form a pass-through and only get taxed once, which is what I do as a contractor. But at no point can you deduct personal expenses... so just like Apple, you can deduct business expense rent but not your apartment. You can deduct education that is required to keep your job but not education that benefits only you. You can deduct business lunches but not food that you would have consumed anyway. You can deduct electricity used for your business, but not for your home.
Mind you, I think it is all BS and they shouldn't tax companies at all. Tax the money as it comes out - no special rates for dividends or capital gains. Not only would it make the US an attractive place to locate a corporation, it would encourage richie-riches to keep their money in their business. It might even improve politics, since it would be harder to hide corporate welfare in the tax code. Not that I have my hopes up there, since corporations have absolute free speech right now - but now we're on another topic.
Re:Found it (Score:3, Insightful)
which doesn't really answer the question of what they paid in 2012.....
You're not going to get that number for a few more months, mate
Re:Whatever Apple's paying (Score:4, Insightful)
Cause you're stupid and don't know how to shelter money (and refuse to learn). Apple - not so much!!!
When I say Apple, I mean ANY corporation and when I say you, I mean ANY of the unwashed masses that just wanna drink beer, eat cheetos, watch porn and then wonder why their wang is orange.
Yeah, the person named Apple has billions in cash, teams of accountants and lawyers. Other "people", not so much. And btw, I can tell from your post that you're part of the "unwashed masses". Self hate much?
I am not part of the "unwashed masses" however, if the supreme court wants to rule that corporations are people and have the same rights, then why not tax them like people? People can deduct interest paid on their primary residence from taxes. Why not only allow corporations to deduct interest on their primary headquarters? People are limited on most deductions to a percentage of AGI. Why not the same thing for corporations?
If I am a small business, employing 150 people, why should I pay more in income tax as a sole proprietor or a partnership, where business income flows through and is taxed as personal income, than if I run the same business but structure it as a corporation? (I know all the reasons to form a corporation, so please don't respond in that way).
Corporations in America get far more state and federal "welfare" than people get. We just don't call it that. Maybe it's about time they pay their fare share, too.
Re:Whatever Apple's paying (Score:4, Insightful)
Furthermore, corporations just have to raise prices, so in the end consumers pay for it. And they pay for it in a regressive way.
That's not true. There's no economic law or theory that says a corporation MUST make a certain amount of profit. Taxes are on profits, not on revenue, so the taxes reduce the amount of profit a company makes, but they don't make it any more expensive to produce and sell a product. Saying that companies "have to raise prices" is ridiculous. Companies set prices according to what the market will bear (notwithstanding monopolies and such), and profits follow based on how efficient the company is at producing and distributing its products.
And you need to stop and use your brain for a moment. How much in taxes do you think an employer pays on the salary for an employee? If your answer is anything other than zero, think some more. That salary is an expense to the employer (along with benefits, etc) and so is not part of the operating profit. As such, no taxes were collected on that money.
Perhaps you should pick up a copy of "Economics for Dummies".
Re:Whatever Apple's paying (Score:3, Insightful)
If you like the Wal-Mart economy approach...a shattered peasant class with little money buying cheap crap, then you're on the right track. What you prefer depends on who you are. Rich and corporations and those stupid enough to be indoctrinated by corporations (Teabaggers, Ron Paul, etc) want lower taxes on the rich and corporations or the same as everyone else pays. The rest (people who aren't living off of capital gains, educated people who aren't subject to corporate propaganda) would prefer a more progressive tax system. If people had more money...like say things were manufactured in the US again, they wouldn't mind paying $65 more for an iPhone. And since 28% is capital gains, that means you don't know if I'm getting my money from my employer and paying in that bracket or capital gains. The fact that you assume to know where my income comes from, shows that you're not a real disciplined thinker, but more the Teabagger type who makes emo assumptions based on limited information. You know, like how teabaggers seem to think they know how the global political and economic system work even though they barely got a HS diploma?
Leaving aside all the immature rhetoric and petty name calling, your comment doesn't even make sense. The current system is obviously flawed, but you don't add to your credibility by rudely portraying an ill-thought out populist idealism.
In theory everything the OP said is 100% right on the money, in practice there are too many loopholes for it to function the way it should, but don't confuse the system's current disfunction with the capitalist system that has brought more wealth and more prosperity to an enormous amount of people than any other system in human history.
Corporate taxes are in theory meant to encourage reinvestment in a company, making it cheaper to reinvest than pay yourself. The problem is that it's possible (and totally legal) to do a huge number of things which effectively allow you to "pay" yourself at the corporate rate, like loaning yourself money from the corporation or buying yourself property and then leasing it to the corporation, etc. etc. etc. The solution is to ensure that if actual people take money from a corporation (they make a financial gain), that this money is taxed at a fair rate and then be done with it. People don't have problems with companies reinvesting in themselves (it's the reason I support low corporate tax rates in theory)... people have a problem with some rich jackass rigging the system to pay way less than his fair share of taxes. Tax code reform is the key, anyone going on about tax rates for the super rich clearly doesn't understand how the system works, they don't really care if you raise their taxes as they'll find a way around them anyway.
Re:So what? (Score:4, Insightful)
I'd agree to that after we get the unproductive members of society off of the government teat. Get those welfare bitches in the ghettos and trailer parks to work or let their dead beat asses starve. Then we can talk about fair taxation.
If we want to talk about who's leeching off the federal government, let's start by looking at it on a state-by-state level. The states that are most heavily subsidized by the government- the states that receive more federal dollars than they pay in income taxes- are almost entirely Republican-leaning states. So we have Democratic-leaning states like California, New York, and Massachussetts subsidizing Republican-leaning states like Alabama, Alaska, and West Virginia.
In effect, the Republicans seem to have been able to engineer things so that there's a redistribution of wealth from high-earning Democratic states to low-earning Republican states. Sounds a lot like socialism to me. It seems like the Republicans are, when you get down to it, perfectly fine with receiving government handouts, they just don't like to see other people get any help.
Re:So what? (Score:4, Insightful)
For why socialism is bad in general, see every socialist and communist country ever.
You are, as most Fox-watchers, confusing socialism/communism with fascism. Also, note that one reason those regimes fail is the heavy-handed way the US and other countries deal with them. For example, we've been fucking Cuba up the ass for decades.
Re:So what? (Score:4, Insightful)