Tim Cook Calls Apple's Tax Questions 'Political Crap' (cbsnews.com) 456
nerdyalien writes: Apple CEO Tim Cook dismissed as "total political crap" the notion that the tech giant was avoiding taxes. Cook's remarks, made on CBS' 60 Minutes show, come amid a debate in the United States over corporations avoiding taxes through techniques such as so-called inversion deals, where a company redomiciles its tax base to another country. Apple holds $181.1 billion in offshore profits, more than any other U.S. company, and would owe an estimated $59.2 billion in taxes if it tried to bring the money back to the U.S., a recent study based on SEC filings showed. The current tax code was made for the industrial age, and not the "digital age," Cook said.
Not avoiding... DISRUPTING (Score:2)
Any day now there will be a startup which "fixes" the tax code.
Needs an Update (Score:2, Insightful)
The current tax code was made for the industrial age, and not the "digital age," Cook said.
Then we should update the tax code and close the loopholes Apple and every single other large corporation has been abusing in the process.
And then make you pay the taxes you owe, retroactively, Tim, if you're going to try and be a smartass about it.
Apple needs a new CEO. Replace Tim Cook. (Score:2)
There have been other seriously bad communications errors at Apple since Tim Cook has been in charge. Apparently, even though Tim Cook worked with Steve Jobs for years, Mr. Cook did not learn about marketing communication from Mr. Jobs.
Tim Cook: Lack of social sophistication (Score:2)
Re: Needs an Update (Score:5, Insightful)
No they do not pay taxes where they earn the profits.
They cheat by transferring the profits to countries with low taxes. It's disgusting behaviour.
Look up transfer pricing and weep,
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I read the whole Wikipedia article on transfer pricing. It is regulated far more stringently than I imagined, with much power given to the IRS if it determines that pricing is not reasonable.
I'm glad that you suggested looking it up instead of providing a biased source, because it seems like a reasonable allowance. Nothing like what "read it and weep" suggests.
I thought transfer pricing could be arbitrary and capricious, because people on the internet make it sound like that. Turns out, at least for America
Re: Needs an Update (Score:5, Interesting)
Every humongous company does this. They pay internally (using pricing mechanisms which they can set arbitrarily internally as well) between branches all over the world, and handle 'profit' where it's least taxed. IKEA, for example, have this down to an art. I forget how it works exactly, but I believe it is a non-profit in the Netherlands, which gets charged by the other branches for the distribution of saleable goods leading to an exact zero profit. You try to sell your house to a child for an arbitrary price and you'll have the taxman pulling you inside out - big companies do the same trick on a routine basis. And get rewarded for it. Tim Cook is talking out of his ass.
Re: Needs an Update (Score:5, Insightful)
No, jackass, transfer pricing is a reaction to thievery. You apparently truly believe that i should be a slave to the government for half of my life because I'm successful.
You have to be a slave to the government for half of your life because corporations are permitted to avoid taxation in this manner. If the corporations paid their tax burden and didn't manage to shift profits to other countries, then you wouldn't have to pay nearly so much to maintain the system that they're profiting from far more than you are, and then not paying to maintain.
I'm willing to pay my share, but I pay 37 people's share.
Then you should be against corporate tax avoidance, not in favor of it. The corporations are the only ones who can afford to get laws passed, and if they had to pay the taxes, then they would pursue efficiency in our government. They don't, so they don't give a shit.
Re: Needs an Update (Score:5, Interesting)
You have to be a slave to the government for half of your life because corporations are permitted to avoid taxation in this manner. If the corporations paid their tax burden and didn't manage to shift profits to other countries, then you wouldn't have to pay nearly so much to maintain the system that they're profiting from far more than you are, and then not paying to maintain.
Perhaps one of the most unsustainable concepts ever invented is corporate offshoring of profits to avoid taxation, while at the same time supply siders demanding pay levels so low as to require the average employee to require government assistance just to live.
Which always leads to the question of how much we can reduce the pay of the "Overpaid American Worker" until we get to the point that is considered proper? And will still allow the same person to buy the shit that is being produced. One of the most bitched up aspects regarding what people who call themselves Capitalists these days have is a complete lack of understanding that they make more money when they have more customers, who are more likely to buy the stuff they are selling if they have money to buy it.
It doesn't take a capitalist, socialist, libertarian, communist, Democrat or Republican, or any other ideology to figure this out. It only takes some really basic math, and not much more.
Re: Needs an Update (Score:5, Insightful)
You have it wrong. If you are saying you have to work 1/2 your life because of taxes (which you claim are being withheld by companies) and i say no its the Government. Its swelled up in size and now wastes way more money by being such a beheamoth.
Yes, that is because we have permitted corporations to dodge taxes. Make the corporations bear the tax burden, and you'll see that situation cleaned up in a hot second.
Take this BS education system. More s-ent than anywhere with terrible results. Then they suckered in whole generations with the EVERYONE MUST got to college.
I personally want to live amongst a more educated populace. You may think that's wasted money, but you can readily see what the alternative looks like in the midwest, where most of the welfare mouths are. Most of them are white, and most of them either stopped before college, or didn't even finish high school. Maybe that money isn't wasted after all. But corporations are spending money to influence education in ways that will profit them, and they don't have to pay for the results, so what do they care? So once again, you make the corporations pay the tax bill, and they will take care of the inefficiencies.
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----any bites....
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Is that supposed to mean 1T, or is it some Arabic/Roman mongrel?
Re:Needs an Update (Score:4, Informative)
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For what it's worth.. 1MM is apparently common in financial services for 1 million.
Bizarre. You only need one M to denote a million of something.
What did they expect? (Score:3)
Did anyone expect him to say "yeah, actually we feel bad about it and will be paying a few billion of what we owe next year"?
Re:What did they expect? (Score:5, Informative)
Except they don't "owe" it. They pay 100% of the taxes they owe. If you feel they should OWE more, then stop voting for people that keep giving them more ways to pay less taxes.
If you could cut your tax bill in half and didn't, you would simply be stupid, if Apple does it, they are criminals.
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Yep.
You don't owe tax when you own the people who make the tax law and they make it so you don't owe the tax.
All entirely legal. Which proves that what is legal is not necessarily the right thing.
Re:What did they expect? (Score:4, Interesting)
If you did what Apple does, you'd be paying a few hundred thousand dollars annually to manage the holding companies, trusts, and other legal entities involved, along with a team of accountants and lawyers to actually pay the taxes owed in the various locations in which you owe said taxes. Of course, it's only cost-effective if doing that kind of paperwork can save you more than a few hundred thousand dollars in taxes. That implies that you'd need to be paying the US about a million dollars in taxes already, implying an income of a few million dollars. I do know a few people who can afford to do such avoidance, but for the average middle-class American, there is not enough profit to justify such an effort.
That balance leads to some very interesting phenomena. For instance, by lowering the statutory corporate tax rate, we can lower the cost of bringing profits into the US, making it more likely that the US will receive taxes on that profit, rather than a foreign tax shelter. The exact numbers were never of interest to me, but there's a point where the US becomes a more attractive place to keep money than other countries, and that's when all of the corporate tax avoidance disappears.
There are longer-reaching effects to be considered as well. Currently, overseas profits can fund overseas expenses, never touching US financial entities and never paying US taxes. That becomes an incentive to keep expenses (such as manufacturing, labor, and assembly) overseas with the profit, contributing to the outsourcing of labor. Once an American company starts operating internationally, there's a financial benefit to moving further out of the country.
Big corporations aren't inherently evil. They just get to play by the whole world's rules, rather than just American.
Money for nothin... (Score:2, Informative)
.
"It doesn't work like that."
Taxing them more simply means higher prices for all the customers. That would be us, not them. If they keep prices th
Re: Money for nothin... (Score:5, Insightful)
Why should Apple or any other corporation get all the benefits of a developed nation including limited liability and patents when they're doing their level best to avoid paying for those benefits? If they want to play these tax avoidance games they should have those benefits withdrawn.
Because Cronyism, and we are Fuc*&#! (Score:5, Insightful)
There is a huge tax problem in the US. There is an 80,000 page tax code, where 79,500(1) are favoritism, cronyism, and the results of bribery. Yeah, Apple should probably be paying more, but given the current tax code they are working within the law. You don't have to like it, but if that was not the case people would be in jail for tax evasion (especially given the amount of money we are discussing).
Not only does all this favoritism mean that companies like Apple legally pay a fraction of what small businesses pay, but there is something worse afoot. Namely, that there is a massive economy built on top of this pile of corruption. I laugh when I hear people talk about flat tax or "fixing" the tax code because they ignore that the US has at least 50Billion dollars a year relying on our current corrupt tax system.
A flat tax, or even corrections to make the tax code fair, are going to put massive numbers of CPAs, Attorneys, and Accountants out of work. The few people leaving from the IRS that you hear about on rare occasions is quite frankly peanuts. Where does everyone employed by H&R Block, Quickbooks, Kiplingers, and thousands of Law firms work if we fix the tax code? Those are some high paying jobs too, so lots of middle class income requires them to be there or they take a massive hit as well.
While I absolutely want fairness, if shitty laws are on the books why is it wrong to follow the law exactly? We need to fix it, but it's not like waving a magic wand or voting for "that guy/gal" will fix the problems. I'll get off my soap box.
(1) Giving 500 pages for title, cover page, index, and boasting by writers
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Apple pays more in Taxes than any other corporation in America. When you consider they are no where near the largest employer in the US, their per capita tax contribution is much higher than any other company. What services are they not paying for already?
Re:Money for nothin... (Score:5, Interesting)
Tax money is your money too. So less tax for companies means more tax for you. And I'd rather have more expensive iPhones than higher taxes, because if I don't buy iPhones, why should I pay more taxes so that others can get cheaper iPhones.
Actually who pay the taxes doesn't matter much, however big companies doing tax avoidance are unfair. Smaller, local companies still get to pay full tax, effectively paying for others trickery.
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half the time their cow is a cone and they don't even know it.
Re:Money for nothin... (Score:4, Insightful)
Say Apple did pay those $60 billion in taxes. Would I see the end results of that? Would they pave some of the awful roads around here or fix some of the bridges with an "F" rating? In my daily life it would make absolutely no difference at all.
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Say Apple did pay those $60 billion in taxes. Would I see the end results of that? Would they pave some of the awful roads around here or fix some of the bridges with an "F" rating? In my daily life it would make absolutely no difference at all.
When you or I pay taxes, we have little to no say in how that money is spent, because we are too poor to lobby individually. At best, we can influence policy by contributing to a lobby which we hope will represent our interests. When a corporation like Apple pays taxes, they have substantial say in how the money is spent, because they have substantial say in how the money is spent even when they don't pay their fair share of taxes. They can afford to lobby, which is in fact how corporations got tax dodges i
A classical, and sometimes popular, fallacy (Score:5, Interesting)
Some people actually seem to believe that "Corporations run at whatever profit, period", and would like to imply that those corporations owe nothing to the society they are based in.
Of course that's total nonsense as a moment's reflection will show.
Corporations aren't islands. They are built on a solid foundation provided by society, embedded in that society, fed and protected by that society. In Apple's case that would be the US. They owe that society for all the things they cannot do or provide for themselves but are only too happy to take for granted.
An educated workforce, the ideas that they built their business on (more often than not based on government or semi-government research at some stage), a legal system that grants them all kinds of rights (contract rights, property rights, copyrights, patents) and protects them if and when those rights are infringed on (both nationally and internationally), a huge part of their market (no company can exist without clients affluent enough to purchase its products/services), a culture in which their products are valued (what's Apple's market share in India?), an ecosystem of suppliers and service-providers, a reliable currency, network and communication infrastructure, roads, ports, transport, housing for its operations and its workforce, etc. etc..
The bill that society at large presents to them for all that vital infrastructure is known as "Tax". And, companies being companies, would rather minimize that bill any way they can.
CEO's for example are paid to help their company increase its revenue and reduce expense. The issue of what's fair or reasonable never even comes up. Any anything that increases profitability (and doesn't result in said CEO being convicted and/or jailed) goes. Companies have no responsibility for anything whatsoever except their bottom line. Of course they understand that they can't do without the society they are rooted in. Only, as with any supplier, they try to talk the price down. Even if that hurts the society they are so busy benefiting from. That doesn't make them "immoral", but it does make them firmly "a-moral".
It is in that light that we should view their comments about "Tax being just political bs.". It's their job to say that; it's in their interest to say that; they're paid to say that. So that's what they say. They might even believe that (a job requirement perhaps?). They couldn't be less concerned with considerations as to whether that's true, reasonable, or fair.
The sad and risible fact is that there still are Americans (not being CEO's) who haven't spotted these simple facts and actually lend credence to rah-rah-taxes-are-a-waste sloganeering.
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"Some people actually seem to believe that "Corporations run at whatever profit, period""
That's because that's exactly what happen: as you already said, companies are strictly amoral. Another discussion should be that people are *not* amoral, so this probably means CEOs are, in fact, immoral and the fact that immoral people are praised as "successful achievers" says quite a lot more about our society than about the companies they run.
It also happens that such an assertion works both ways: corporations in f
Re:A classical, and sometimes popular, fallacy (Score:4, Insightful)
It is in that light that we should view their comments about "Tax being just political bs.". It's their job to say that; it's in their interest to say that; they're paid to say that.
Cook didn't say that TAXES are political BS. He said that the QUESTION is political BS. It's a real example of begging the question. The question assumes that Apple owes $50.2B in taxes on overseas profit. They don't owe that money, so it's a BS questions.
I hate Apple and all their works and all their empty promises, but Tim Cook is 100% right about this.
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Is that so? It appears to me that the money is in tax purgatory. Considering the sub-licensing of IP shell game, how are you 100% sure?
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Not so fast there ... the last I read about this is that Apple is suspected of tax-avoidance. I.e. deliberately setting up a network of purely administrative companies and trading in purely adminstrative "products" with no other purpose than to prevent overseas profits from showing up in Apple's accounts under a heading that would make them taxable in the US.
From a letter-of-the-law find-the-legal-loophole-
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He didn't say Taxes are political BS. He said people saying Apple doesn't pay taxes is political BS. Apple is the largest tax payer in the US.
Re:Money for nothin... (Score:5, Insightful)
"Taxing them more simply means higher prices for all the customers. That would be us, not them. If they keep prices the same, it means less investment by them in jobs, or higher prices for us, period. "
Euhhh... nope, this isn't the case, you can read it in the topic's brief: "Apple holds $181.1 billion in offshore profits". That is, Apple holds $181.1 billion that neither goes to jobs, nor R&D, nor nothing: it's just money sitting in a bank, which means you just could tax Apple $181.1 billion and they still shouldn't need to fire any employee, nor close any R&D program, nor rise its products' prices in the least.
Of course, I'm not saying we should tax any company for whatever their net profits are, nor that my "plain" explanation is quite naive, just that doing so wouldn't be the hell you are purporting. You also say "At any rate, a tax on them is simply a tax on the customers in the end" which, in fact, it isn't: any company making more than "fair" profit can indeed lower it (i.e. because of increased taxes) without touching their price tags. All they need is having competition which feels comfortable with that lower profit level.
Not us. You. Or maybe not even you. (Score:2)
Taxing them more simply means higher prices for all the customers. That would be us, not them.
Apple is already charging their costumers for literally and figuratively imaginary properties of its products.
They are charging customers for the Apple IMAGE.
To the people who are image shopping increase of price means diddly squat.
Or they are not really serious about keeping up their image of whatever Apple products mean out there.
Cool? Hip? Creative? Expensive? Better than others?
So... Making Apple pay what they owe would either have no effect on their sales - or Apple would suddenly stop being cool and o
Re: Not us. You. Or maybe not even you. (Score:5, Insightful)
tl;dr version: If the market would bear a higher price, they'd already be charging it.
Re:Money for nothin... (Score:5, Insightful)
Taxing them more simply means higher prices for all the customers. That would be us, not them.
I see this misconception bandied about freely often by people who are attempting to sell a line of bullshit, and that's precisely what this is. The first sentence is fine. Yes, taxing them more means higher prices for the customers. The second sentence is cockery. When you make the corporations pay taxes, we only pay more for those goods when we buy those goods. I can easily choose not to purchase Apple hardware — in fact, I have never bought any of it new, and haven't owned a Mac in almost a decade — and then I do not pay those taxes. Only the people who buy the products do. That is why taxing the corporations is the absolute best solution in every way; the costs of paying the taxes are baked into the corporation's products and services, and then only their customers have to pay. So in fact, your conclusion is diametrically opposed to the truth; taxing the corporations is the only way that the taxes aren't paid by "us", meaning We The People. Instead, the corporations are only paid for by "them", meaning the people who buy the products. Trying to lump all of The People together in cases where that clearly does not make sense is a logical fallacy, and you're trying to sell us a line of bullshit.
TL;DR: It's good when taxes are baked into the prices of products, because then only the people who purchase those products have to pay for the taxes, as opposed to the situation where you permit corporations to avoid taxes, and then the middle class has to bear the majority of the tax burden directly even when they are frugal.
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And when you tax energy companies? Raw material companies? Transportation companies? Builders? Consumer products are just one industry out of many. And you realize that consumption-based taxes are regressive, right?
I understand your plan: "tax everyone but me! yay! it's free!". But in addition to your plan being evil, it's also wrong.
Re:Money for nothin... (Score:5, Informative)
Taxing them more simply means higher prices for all the customers.
Well that's simply horseshit. Paying their taxes increases their costs. Apple make a lot of profit, so paying taxes would reduce that profit. Profit is used for a lot of things; salary increases (rarely), growing the business by investing in new product designs, more staff etc etc, put in the bank for a rainy day, or paid to the shareholders in dividends or via share buy-back schemes.
Apple has stupendous amounts of past profit stashed away as cash reserves in offshore banks, because it doesn't have anything else it can think of to do with it.
Increasing prices to pay their taxes, rather than take a slightly smaller profit makes no sense, because their revenues already far outstrip costs. If a higher price would be more profitable for them (vs decreasing sales), they'd already be charging it.
Apple, like Google, Vodafone, Amazon and any number of multinationals pay hardly any tax in the countries that buy their products. They make their revenue from western countries, but use complex arrangements with shell corporations, intra-company loans, licence payments etc so that those profits are then recorded in 0-tax tiny countries. Thus much higher profits - which ultimately largely end up going to the shareholders (which of course, includes the CEO and other top management). The shareholders are largely already the wealthy, because they're the only ones able to use their money to invest in large amounts of shares instead of you know, buying stuff to live on. Even if the money doesn't go directly out in dividends, it's used to increase the share prices, which has the same effect.
So instead of paying for the infrastructure they use in western countries, for the social safety nets their workers have in europe etc, for the educations their workers get, by paying the pitiful amounts of tax rates they actually should - they divert them to offshore holdings and they end up making the already rich richer.
It's incredibly regressive. In addition, smaller national companies can't pull the same tricks, have lower profits to invest in growing their business, and is a good part of the reason the big multinationals got so big in the first place and displace smaller companies from the marketplace. Who, incidentally, also pay better wages on average.
UK corporation tax rate is 18%, hardly extortionate for the amount they benefit from selling in the UK. And hardly any of the multinationals actually pay anything like that rate, many pay nothing at all - meaning us working stiffs have to pick up the difference to pay for the NHS, roads, police, firemen, social security, pensions etc etc etc, all of which have been under heavy pressure precisely because the government isn't getting enough taxes in to pay for our already thinly stretched services.
Companies in the 50's and 60's used to include social responsibility for their workforce and their communities as part of their thinking - they knew that having customers able to afford their products was a good thing for them in the long run. Now it's all about maximising share price in the shortest possible time, and screw the long term, the workforce, the customer and anyone other than the very richest.
Re:Money for nothin... (Score:4, Insightful)
Taxing them more simply means higher prices for all the customers. That would be us, not them. If they keep prices the same, it means less investment by them in jobs, or higher prices for us, period.
. Wrong. There's a third and obvious option, lower profits. Apple's profit margin isn't some fixed value and higher expenses (e.g. increased tax payments) can't arbitrarily be covered by raising prices or cutting expenses elsewhere. If Apple could raise prices as easily as you imply they would have already done so to maximize their profits. If Apple could cut their expenses somewhere (e.g. salaries) in a way that wouldn't affect their profits they would have already done so to maximize their profits.
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Taxing them more simply means higher prices for all the customers.
There is limited elasticity. Also assumes Apple products are influenced by supply/demand, which they are not.
See Veblen Goods: https://en.wikipedia.org/wiki/... [wikipedia.org]
They are not U.S. profits. (Score:2, Insightful)
They are not U.S. profits. The U.S. has no right to tax them uuntil and unless Apple does something stupid, and converts them into U.S. profits.
Is there anything Apple could spend that money on in the U.S.?
It's not like they are going to build factories in the U.S. and raise their costs of production by complying with U.S. environmental laws, or hiring more expensive U.S. workers.
Even if they did bring it back to the U.S. as profits, and offset the environmental costs by subtracting out the shipping costs
They are U.S. profits, no matter what domicile. (Score:2)
They are not U.S. profits. The U.S. has no right to tax them uuntil and unless Apple does something stupid, and converts them into U.S. profits.
Then the U.S. would have no problem assessing a tariff to offset (and possibly penalize) such re-domiciled U.S. profits.
Like Steve Jobs told Obama in Feb 2011, when Obama asked what it would take to manufacture Apple products in the U.S. ("Why can’t that work come home?") -- the answer is: “Those jobs aren’t coming back.”
Crank up the pain high enough and they will. Then again, I don't think either of them like America enough to see it prosper.
“Our economy is in deep trouble,” said billionaire and self-professed Fabulist Jeff Greene in an interview yesterday at the World Economic Forum in Davos, Switzerland. “We’ve had a realistic level of job destruction, and those jobs aren’t coming back.”
What says they cant, even under the weight of a hyperpower like the US? If anything, the Davos folks like Greene are the kind that hate Americans and would do anything to destroy the country.
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I can work outside of the U.S. for a foreign based company with not a single penny coming from U.S. sales for that company and I STILL GET TO PAY U.S. INCOME TAXES EACH AND EVERY YEAR!
Then you need to fire your accountant. The IRS [irs.gov] allows you to exclude up to $100,000 in foreign income alone. There are also deductions you can take in addition to that. Most people I know who work overseas essentially pay no income tax.
I get no say in the matter.
That is a lie. The IRS has many deductions you can take.
Yet, U.S. based corporations get to offshore their non-U.S. profits until it is advantageous for them to bring them in.
That's as asinine as saying the UK gets to tax money that British Airways makes in the US.
Re: They are not U.S. profits. (Score:3)
The bullshit there is the IRS trying to tax you on that foreign income, not that corporations aren't.
As far as I know the US is pretty much the only country that tries to double dip on its citizens' income like that.
I would say that a tax code that allows $59B to be (Score:2)
shielded from taxation simply by moving it to another country IS a tax code designed for the digital age. A tax code that wouldn't allow taxes to be avoided that way would sound more like something for an industrial age.
Not just a tax issue, but unfair competition (Score:5, Insightful)
This means that Apple can operate in most of the world's major economies without having to pay 20-40% of its profits to the governments. The local companies often do. Minimally this gives the tax avoiding companies that much more to dump into marketing, research, etc while still returning a healthy profit to their shareholders.
So when looking at the losses, the UK Germany and so on, should not just look at the lost taxes but the lost benefits of having the next Facebook, Apple, Google, etc be born in their countries. What is Google worth to the US beyond simple corporate tax revenues? I suspect that at first blush that having a Google in your country would be worth a shocking amount.
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There are a few reasons why the UK government is reluctant to tax multinational corporations. There are a few UK based multinationals that threaten to go elsewhere if forced to pay tax, and many of them are run by friends of the Tory party. Cameron and Osborne are not going to screw their old chums by making them pay tax, that's something only proles do.
Forcing multinationals to pay tax wouldn't really help small UK companies anyway. Anyone competing with Apple is either looking to be bought out or will hav
It's not Apple's fault (Score:5, Insightful)
I actually like an arguement made before the Australian Royal Commission into tax avoidances many years ago. I think it was one of the Packers who said something along the lines of, "We have a moral and legal obligation to pay the government as little tax as possible. We will always pay the minimum required. If you want us to pay more tax then change the laws." (paraphrased since I can't find the actual quote).
Which is all quite true. I myself don't donate anything to the government and I do everything within my legal power to minimise the tax I pay. Corporations are no different and if you want to tax them then you need to close the loopholes that allow a company to operate in your country without paying tax. But good luck getting anyone to do that as the business groups then complain and say you'll drive away business with your "high" tax.
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"We have a moral and legal obligation to pay the government as little tax as possible.
Which is all quite true.
Not it isn't. Simply declaring something to be true does not make it so. Do you have any evidence that anyone, ever suffered legal consequences for not minimizing their tax bill to the greatest extent possible? No? Didn't think so. That means your "legal" quote is flat-out wrong.
As for moral, that's just junk too.
The fact that closing loopholes is hard because people with a lot of money can spend a
Re:It's not Apple's fault (Score:5, Insightful)
Do you have any evidence that anyone, ever suffered legal consequences for not minimizing their tax bill to the greatest extent possible? No? Didn't think so.
Yes, see shareholder lawsuits against the board / CEO when they think the company didn't return maximum profits. This stuff happens all the time. A corporation's responsibility is not at all towards the government beyond obeying the laws. The law is where their responsibility ends. After that they are responsible for their shareholders.
The fact that closing loopholes is hard because people with a lot of money can spend almost arbitrarily large amounts trying to find loopholes. The country you set up your profitable business in only works because of the taxes paid. Trying every means to avoid them is free loading and is not morally justified.
Wrong argument. The loopholes are well known. So well that it's quite possible to calculate how much tax would be paid if the loop holes didn't exist. The government knows this, they chose not to close them. Also who's taxes built a country? The corporation who pays little, or the small business and workers? Clearly the countries are presently working and always have worked too despite the lack of corporate taxes.
On a more personal note I'd like to thank you for donating to my education. You did donate right? As in you didn't ever file a tax return, you didn't pay a tax accountant to minimise the amount of taxes you paid? You just voluntarily gave the government money which it used to fund my education and dropping bombs on other countries right? Thank you. Or if not, then please get off your moral high horse. And even if you did get off that moral high horse too. My government bombs other countries in wars it's not involved in. My government donates to a charity which I don't agree with. My government spends money on spying on citizens, tracking their movements, and infringing their rights. I morally oppose both of those things and as such morally oppose giving any more money to the government than I am required to.
Morality is not absolute. It's a distinction between right and wrong. I think I'm right and you're wrong. Let me guess, you disagree? Then maybe morality is in the eye of the beholder.
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Yes, see shareholder lawsuits against the board / CEO when they think the company didn't return maximum profits. This stuff happens all the time.
Again, you state without proof. If you can't actually provide evidence of when someone has suffered legal penalties due to not minimizing the tax bill to the greatest extent possible then you're just making up hypotheticals and presenting them as facts.
If it's true, provide a reference to one time it's happened.
The loopholes are well known. So well that it's quite
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Again, you state without proof.
I'm not going to homework for you common knowledge. Search yourself. You don't even need to look far, the right keywords on the Slashdot search box alone will find you the evidence without even needing to resort to Google. Heck we covered an article on shareholders who sued their board of directors only last week.
Closing loopholes without causing harm elsewhere and actually making sure no new loopholes exist is really hard.
No it's not. These loop holes don't cause harm elsewhere, unless you think my Government now has an obligation to the Cayman Islands now. The "harm" you describe is that someone needs to pay taxes.
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That's civil law. Things that are illegal - which was your claim - are the province of criminal law.
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Criminal law, civil law, don't split hairs. The point is the same. The corporations are doing what they are required to.
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A quick search with Google (as you suggested others do) shows that the proposition that the Board of Directors of a company has an unfettered duty to maximize profits is not true. There doesn't seem to be a decision that clearly puts forward this viewpoint. Yes, Boards owe duties to shareholders, but a singular focus on maximizing profits doesn't seem to be one of those duties.
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If you are robbed, never complain. Maybe theft is moral to some people. Who can say? Not you!
Your right to complain and your right to determine what is immoral are two different things.
If someone stole from me I would complain, and their actions would still be moral in their eyes (survival), and immoral in mine, what I wouldn't do is say that they are wrong for their argument about morality because quite frankly that's not possible.
If you have anything more to say, I won't respond. I don't communicate with known child molesters. Oh, wait. Would it be immoral to accuse someone of a horrible crime with no evidence? Too bad you've abandoned the notion of morality.
Good. As for if it is immoral or not, I don't know. I have no idea of your circumstances. You may be perfectly justified and think you're on good moral standing for doin
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If everyone obeyed the law and the government passed legislation that made sense? That really would be a wonderful world.
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US tax law is the problem (Score:5, Interesting)
Apple's tax arrangements have been in place for over 30 years, they are hardly new. It is also pays more US tax than any other company.
Essentially they have subsidiaries in low tax countries ( Ireland and Singapore) that control the buy price of the international sales in the other non-US countries their kit is sold in. This is commonly called transfer pricing.
This effectively holds international profits in low tax foreign locations.
Apple doesn't do the next logical step in financial engineering, which is to move the companies IP to a zero tax location , and license it back to the other subsidiaries , at a rate that simply transfers all profit to a zero tax location (eg Bahamas) . Many companies do take this extra step.
Part of the goal of companies in doing this is that the US is almost unique , in that it taxes the profits on foreign sales, after they have been taxed in the country of sale. Very few other countries do this. Most countries don't double tax like this.
This legal situation with US tax law encourages the kinds of thing Apple has done for over a quarter century, as well as far worse. It encourages companies to minimize tax earns in foreign countries, and minimize the fraction of profits they bring back to the US. It's an everybody loses outcome, the country stuff is sold in has its corporate income tax takings reduced, and the funds are never repatriated to the US, living in limbo offshore, reducing US government tax income as well.
If the US adopted tax law consistent with most other countries, there would not be a double taxation incentive to avoid the return of funds early on international sales to the US.
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So, why not just print the $59.2 billion? (Score:2, Interesting)
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There are two different issues (Score:2)
He's right. (Score:2)
I agree with Tim. There is "political crap" going on alright. It's our own damn government taking bribes in exchange for tax loopholes to allow this kind of shit to happen in the first place.
It's easy for our own government to make this kind of activity illegal. It's impossible for them to actually do it, which goes to show anyone and everyone who is truly in control of our government, and has been for a very long time.
And it will remain that way until someone makes lobbying our government illegal. Fat
Apple (and others) found loopholes (Score:2)
.
Calling them out on it is not political crap. Calling it political crap is a diversionary tactic used in an attempt to change the topic of conversation.
Our tax laws are the way they are (Score:2)
because of the money that is used to buy politicians/elections. When it becomes cheaper to buy a politician than to pay the tax, you buy the politician. Don't expect to see any changes that result in more tax revenues coming in from corporations or very rich people any time soon. If someone succeeds in increasing tax revenues it will come at the expense of people who work for a living, because they have no say whatsoever in what their government does.
La révolution dévore ses enfants (Score:2)
Shaming capitalism and the rich for the progressive mob's consumption is called 'Monday through Friday' for mainstream media, even the "venerable" 60 Minutes. The only difference is the target is one of their own...he probably expected a pass or kid gloves. You shouldn't trust a starving dog.
You're a political creature. Live with it. (Score:2)
Calling it "political crap" is just snark that reinforces the arrogance of Apple.
Re: Tax Inversion (Score:4, Informative)
Well, for most the dividends *are* taxed at almost 40%, also short-term stock gains. Longer term taxed at lower rate, but it's tax on non-inflation adjusted profit.
Re: Tax Inversion (Score:4, Interesting)
An investigation by the U.S. Senate showed Apple had paid just 2 percent tax on income of $74 billion over 2010-2012, largely by exploiting an unusual loophole in Ireland's tax code. In 2011 Google paid a rate of 11.9 percent, while Yahoo paid 11.6 percent and Microsoft paid 18.9 percent. Xerox paid 7.3 percent of its income in taxes, while Amazon paid only 3.5 percent.
In 1952, corporate taxes accounted for 5.9 percent of GDP, a figure that has fallen to 1.6 percent today. We need to have them start paying 5.9 percent again because if they don't pay it, then we will and we certainly don't have the cash.
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But you should pay the full income tax even if you held the stock for 3 years
The reason they do the short term rate higher than long-term is good, they're trying to slow down day trading and all the instability and insanity that model introduces. I definitely think we want to penalize short term investors for being nuisances. Sometimes even 1 year seems to short. I get tired of these quarterly reports where every financial emission of a company is scruitinized on a 3 month basis. A hardware technology com
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Re: Tax Inversion (Score:4, Insightful)
The last time I checked, dodging taxes was a criminal offense.
Time for you to look up tax avoidance vs. tax evasion.
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Legal definitions invite legal scholars to find loopholes. Even the best intentioned law will have some clever law students finding a way to be employed by finding a way to remain legal enough to survive a court case.
Following the spirit of the law is not part of capitalism, nor part of the American cultural tradition. Argue otherwise all you like, but history shows the truth.
A stockholder should not be punished if the held company is following the law. And good luck trying to word a law that does what you
Re: Tax Inversion (Score:4, Interesting)
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You don't actually understand why capital gains are taxed at the rate they're taxed, do you? The percentage can, arguably, be discussed but first you should understand the reason that the rates are as low as they are. The reason they're low is because you want me to keep my money invested and you want me to do so in the long-term area.
So, I do. I'm taxed at a very low rate (about 15% or so federally and maybe 8% at the State level) and I keep my money invested in the market instead of socked away in a bunch
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It's entirely lawful, tax avoidance is legal while tax evasion is illegal.
Hence inspiring the more enterprising among us to invent the lesser known practices of "tax evoidance", "tax avoision", "tax evaidance", etc. Never underestimate American ingenuity when it comes to skirting regulations. Some of these practices have been elevated to true art forms.
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You speak the truth. My accountant is a dear old lady who worked for the State's revenue department until retiring to open her own practice. She's, well, I'm not going to say that she's unethical or anything but she's really creative. I have no idea what witchcraft she does nor do I pretend to understand it. I'm just really grateful for her.
For my own amusement, I've done my own taxes and then brought them in for her to correct. Heh... She still bitches at me for donating anonymously. She tells me countless
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So let me get this straight:
1. Party X does stuff we don't like, so Party Y campaigns on the idea that they don't like that stuff, and they're going to do something about it.
2. Party Y wins enough elections to outright control Congress and the Presidency, based on this campaign.
3. Party Y does jack shit with their outright majorities about the stuff they said they don't like.
4. Somehow Party Y still blames Party X, even though they had every opportunity to do something about it, but didn't want to do an
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Because the money is made by an American corporation an is controlled by an American corporation so it is subject to the same tax laws as all other Americans corporate or not. However, the part about paying European tax is moot as a credit for taxes paid to other countries is given in the tax code.
What this amounts to is basically you or I making money and due to some political boundaries, are able to hide it from the IRS or whatever your home taxing authority is called yet still keep control and advantage
Re:Look, Tim, I get you do not like the law (Score:5, Informative)
But you cannot pick
Well they have been.
They take their profits in Ireland to avoid taxes. They build their products in Asia to avoid the EPA, OSHA, NLRP, EEOC, et al. They get to pick their preferred rules on both ends. Yay "free" trade.
Tim is ordinarily so smooth it's creepy; words like "crap" are outliers in his vocabularly. He messed up a little here. But no worries. They'll have him say we need to "do something" about LGBT rights or "do something" about the climate and all will be well again.
Re: Look, Tim, I get you do not like the law (Score:2)
You're smoking crack if you think Tim is doing anything illegal - the tax code is written so that big donor corporations can find favorable tax treatment strategies.
But the idea that somehow if the USG takes money from Apple that there will be more social good is laughable on its face. You want to talk about medicine? I won't give Apple credit for the idea of the smartphone revolution (the authors of "The Innovators' Solution" get credit for the free-market conceptual framework) but Jobs did execute the vi
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But the idea that somehow if the USG takes money from Apple that there will be more social good is laughable on its face.
I hate Apple, but this is an incredibly good point. Part of the reason that TAXES should be lower is how much the government squanders the money we already pay.
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I hate Apple, but this is an incredibly good point. Part of the reason that TAXES should be lower is how much the government squanders the money we already pay.
And the private market is completely honest.
Is bribe money squandered? Baksheesh? Hookers for the visiting suits? Market manipulation?
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With governments, there's just the government. It doesn't matter how much quality they deliver, you still have to pay for their hookers.
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But the idea that somehow if the USG takes money from Apple that there will be more social good is laughable on its face.
Individuals have to pay all the taxes but get no say in how the money is spent. Corporations get all the say in how the money is spent. If we make them pay the taxes, then they will demand that less money be spent. They will pursue the efficiency that they don't care about today because they're not paying for the government anyway.
People fear Google, I just hope they take over, because they are relatively efficient and competent
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It would be nice if corporations actually paid tax in the country where they actually earned the money. Apple, like other giant corporates, earns billions in Australia and pays bugger all tax, carefully moving the "profit" to other low tax countries.
If the country required taxes paid on where the profits were earned this wouldn't be a problem would it? Don't blame giant corporations for not being charitable towards your cause, they have shareholders to look after. Instead why not blame your governments, the ones who keep saying they'll close the very loop holes these large corporations use but after "consultation" decide that it's not in the best interest (reads: a mega corporation convinced them it would cost jobs and they'll make them look bad politi
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I suggest you go out an talk to some real people, and see how may of them like paying more tax so Apple doesn't have to.
In the real world you won't find many.
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I'm also posting to undo an awful mod.
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It's easy to make a lot of money if you don't pay the proper taxes.
Sounds like a great reason to lower taxes then. I'd rather make a lot of money for a lot of people, than pay "proper" taxes.
Well yes, you are right. And tax rates would go lower if it wasn't possible to offshore money to evade the taxes. Well ,at least for most of us. Obviously the 0% rate some outfits are seeing now would go up.
But whatchya think? Some of these good folk like to make certain they don't pay taxes:
http://www.world-psi.org/en/go... [world-psi.org]
While at the same time:
http://consumerist.com/2013/10... [consumerist.com]
http://money.cnn.com/2013/10/2... [cnn.com]
Giving them helpful hints about suckling at the government's teat.
It's a compl
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Entitled people want the products of taxes (law and order, et al) but believe others should pay for it.
That applies to you as well. I want to see you care about what the money is spent on, before I care whether Apple pays for it.
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Please explain why taxes shouldn't be paid unless every random joe you meet proves to you personally that they care what the taxes are spent on?
Because otherwise taxes get spent on utterly retarded stuff.
And why misspent tax doesn't mean that taxes have already been lowered, and yet the corporations and rich fuckwits (such as you wish to become, if it weren't for the niggers and liberals fucking things up for you, because they hate you for your potential success...?) still have avoided taxes, indicating that the problem isn't that the taxes are high at all, but that they don't want to pay at all.
Misspent taxes means the government has too much money.
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Except that it's not a lot of people that would make a lot of money. It's a few people are making obscene amounts of money by not paying taxes.
So what do you think of the earlier poster's claim that it's easy to make a profit, if you don't pay the proper taxes?
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So what do you think of the earlier poster's claim that it's easy to make a profit, if you don't pay the proper taxes?
Damn straight! Like my father told me in a chat about personal finances :
"Its easy to live like a rich man if you don't pay your bills."
Exactly, and no doubt about it.
But then he added:
"Of course, that's only for a little while."
And that pretty much sums it up. Our unsustainable ecosystem we have built will allow these good folk to make awesome - and defined as perfectly legal - profits. For a little while.
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"Its easy to live like a rich man if you don't pay your bills."
So you don't actually agree. And what bills really are we speaking of here? Defense contractors? The growing sums of money transferred. reverse Robin Hood-style, from the young poor to elderly rich? Interest payments from people too irresponsible to spend within their means for generations to the banks, foreign countries, and anyone else who holds US bonds and treasuries? Welp, I just specified 80% of the current US government's spending.
I'm not impressed by the bills.
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When the founders of the United States designed the system, there WAS no tax on the individual. No federal income tax. No federal property tax. Zip. Zilch.
And there was no health care, no public education system (perhaps only religious ones, not managed or funded by the government), no interstate highways, no international development, no social security, etc.
Constitution of The United States is NOT some dusty quasi-religious text, it is the design document. It's the Blue prints, and Specs.
The way you talk about it, it IS a quasi-religious text. A country "design" from 1776 is not necessarily still good today. It must evolve, democratically.
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The way you talk about it, it IS a quasi-religious text. A country "design" from 1776 is not necessarily still good today. It must evolve, democratically.
Actually, the basic design is "fine", because they left language in it that lets us change it. We can amend it, and besides, it already grants the federal government the right to make laws to permit it to manage the country, and we have amended it to make sure that the states have to fall in line. That has permitted it to evolve.
The only part of the basic design which isn't fine is that it completely ignored political parties, which prevented putting limits on them, to the detriment of democracy.