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Apple Should Pay More Tax, Says Co-Founder Wozniak (bbc.com) 240

mrspoonsi quotes a report from BCC: All companies, including Apple, should pay a 50% tax rate, Apple co-founder Steve Wozniak has told the BBC. He said he doesn't like the idea that Apple does not pay tax at the same rate he does personally. "I don't like the idea that Apple might be unfair -- not paying taxes the way I do as a person. I do a lot of work, I do a lot of travel and I pay over 50% of anything I make in taxes and I believe that's part of life and you should do it." When asked if Apple should pay that amount, he replied: "Every company in the world should." He said he was never interested in money, unlike his former partner Steve Jobs. "Steve Jobs started Apple Computers for money, that was his big thing and that was extremely important and critical and good." Three years ago the company admitted two of its Irish subsidiaries pay a rate of 2%. It has built up offshore cash reserves of around $200 billion -- beyond the reach of U.S. tax officials. In a CBS '60 Minutes' episode, Apple CEO Steve Cook dismissed as "total political crap" the notion that the tech giant was avoiding taxes. And on a semi-related note, presidential candidate Donald Trump said in January he'd like to make Apple "start building their damn computers and things in this country instead of other countries." He said he would impose a 35% business tax on American business manufacturing outside of the U.S if elected president.
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Apple Should Pay More Tax, Says Co-Founder Wozniak

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  • Selective taxes are why we are in the hole we are in. If Waz want's to donate, there is an easy way for him to do just that.

    Always easy to give away other people's money...

    • by zlives ( 2009072 )

      if by fair you mean legally obligated, then I am sure they do, just like i fairly maybe mentioned in the panama papers.

    • Re: (Score:3, Informative)

      by Locke2005 ( 849178 )
      What Woz is trying to say is that taxes should be more progressive; a lot of rich people agree with him on this. Probably the first step would be to go to flatter and lower tax rates, but eliminate ANY deductions (even for mortgage interest). For personal income, any income up to the poverty line should be tax free, you only get taxed on the amount your income exceeds the poverty level by. Both conservatives and liberals are right about some things, but conservatives seem to have a better grasp of basic eco
      • Re: (Score:2, Insightful)

        by s.petry ( 762400 )

        Your summary does not come close to what Woz said. What he said was that Company and Personal taxes should be the same rate or favor personal tax, which I vehemently disagree with. I have yet to read a good economic argument as to why a company should pay the same rate, or a higher rate than people. People are subject to the Socrates's story of the Artisan, a company is not.

        Apple is paying what the current system says is required. I agree that it's not a fair system, because their percentage is much l

        • by guises ( 2423402 )
          All right, you're giving Socrates' story of the Artisan as the basis for your disagreement, but this is one that I'm not familiar with. A quick search is turning up nothing - I don't suppose you could give a link? Or the Clif Notes version, maybe?
          • by J053 ( 673094 )

            It's literally the first hit in a Google search for "socrates artisan".

            • by guises ( 2423402 )
              This? [roangelo.net] If that's the case, what the GP seems to be suggesting above is that companies are smarter than people - they have the wisdom of artisans without the foolishness. ... How does that apply to taxes?
              • by dryeo ( 100693 )

                Well companies are smart enough to use their power to get lower taxes and also to push the line, a very fuzzy line, between legal tax avoidance and illegal tax cheating and to hire good enough lawyers that they can drag out legal battles for close to forever which discourages government from going after them.

            • by s.petry ( 762400 )
              No, it's unfortunately not. The versions of the book I have are pay for books, the better being the linguistic and historical translations. The Cambridge Texts version is very good, but you should also have some history books handy to reference.
          • by s.petry ( 762400 )

            Sure, but it will have to be the Cliff notes version. The story is out of Plato's "The Republic" and pretty early in the defining of a Republic. I'd recommend you buy and read the linguistic translation of the book instead of the various philosophical interpretations of fragments.

            The story of the Artisan is Socrates proposing that the Republic must protect against an artisan making huge sum of money for a single project. Not only does that act dissuade further work from the person, but even worse, the pe

            • by guises ( 2423402 )
              Okay, I appreciate the follow-up. In that case I can see how perhaps that applied to people and companies in the past, but part of the fallout from the Citizen's United decision is that companies are now free to make campaign donations to political action committees. In other words, they are now meddling in other people's affairs, in fact are the largest of those meddlers, and are well equipped for that.

              My take on this whole thing: I don't see that the rate at which companies are taxed and the rate at wh
        • In a way having a lower corporate tax rate may promote some form of tax dodging. If the corporation pays less taxes what can easily happen is wealthy individuals will move their property goods including cars, houses, etc to the company in order to evade personal taxes.

          • This is already common. Do it wrong and you are open for audit, but as long as any incorporated business has a legitimate business purpose (rather than tax efficiency) the IRS is pretty flexible.

            My Buddha-- did I just say that last part?!

      • by rsborg ( 111459 )

        What Woz is trying to say is that taxes should be more progressive; a lot of rich people agree with him on this. Probably the first step would be to go to flatter and lower tax rates, but eliminate ANY deductions (even for mortgage interest). For personal income, any income up to the poverty line should be tax free, you only get taxed on the amount your income exceeds the poverty level by. Both conservatives and liberals are right about some things, but conservatives seem to have a better grasp of basic economics, hence flat tax proposals come from the conservative side. "Fair" is a pretty arbitrary standard; what is fair or not tends to get decided by those in a position to finance elections.

        Flat taxes are not "more progressive". Removing loopholes (especially corporate ones) would help, but I'd bet millions (ie, how much the FIRE economy [1] lobbyists will spend) that the mortgage interest will never go away.

        [1] Finance, Insurance, Real Estate https://en.wikipedia.org/wiki/... [wikipedia.org]

      • by dryeo ( 100693 )

        Alberta (think Canada's Texas, traditionally very conservative) tried the flat tax thing and went way in the hole, about $10 billion for a Province with only a couple of million people.
        Conservatives seem to have a terrible grasp of basic economics as while they'll cut spending, they'll cut income even faster and have no concept of a rainy day fund and also over simplify like Alberta's 10% flat tax along with the believe that oil would never drop much below a hundred dollars a barrel.
        The center seems to actu

      • eliminate ANY deductions (even for mortgage interest)

        Eliminating deductions for mortgage interest would likely be regressive. People with more money will set up a company to own their house and then have mortgage interest (and any maintenance) be a tax-deductable loss, just like any other business expense. If you want to make things fairer, then you should ensure that individuals get all of the same tax advantages as companies.

        • In comparison to the costs of a mortgage, the cost of spinning up a LLC are negligible. Anyone can do this already...

  • by supernova87a ( 532540 ) <kepler1@@@hotmail...com> on Friday April 22, 2016 @05:55PM (#51967849)
    Congress, collectively, should get off its ass (which is being incentivized to do nothing by corporate money), and reform the tax codes with a renewed and vigorous sense of public duty. Public duty to the country, people, and public good -- not their select few lobbied corporations who don't represent the majority of companies and people who are willing to pay their taxes fairly and fully if they can see that others are doing the same.

    And stop picking on Apple. Though I'm no fanboy, Apple is just one symptom of the problem. Punishing Apple isn't going to fix the 10,000 other companies that do what they do. Reform the system in general, not prune/pluck at 1-2 examples.

    I would bet that in closed doors, CEOs of many companies would tell Congress to fix the damn system and make us pay more tax, if everyone were forced to follow the same rules. Stop the leakage and loopholes that are benefitting only those who are rich enough to afford the lawyers and accountants who are smart at shifting money around...
    • by AmiMoJo ( 196126 )

      People look at Apple because they were the first to develop the Irish tax dodging scam, and the "Dutch sandwich" to go with it. So if you can figure out how to make Apple pay more tax, you have figured out how to make most companies using similar loopholes pay more tax too. That's why there is a focus on them, they were the first and by being successful have also become the one of worst offenders (Google has overtaken them in some areas now).

      The EU has the right idea. Tax companies based on global revenue r

  • by __aaclcg7560 ( 824291 ) on Friday April 22, 2016 @05:56PM (#51967851)
    If the Woz is paying 50% in taxes, he's doing his finances wrong. Earned income is taxed at the highest rate. Portfolio and passive income is taxed a lower rate. He needs to convert his earned income into portfolio and/or passive income. The less earned income he has, the less in taxes he will pay.
    • If the Woz is paying 50% in taxes, he's doing his finances wrong

      It depends on how he's calculating the 50% claim. There's state and local income taxes. Local property taxes. State and local sales taxes. All that could easily add up to 50%, especially if his primary residence is in a high tax locality like California or New York.
      Also, he may be aware of how corporate income taxes are baked into the prices of all good and services; that pushes pretty much everyone's income to well over 50% going towards taxes.

    • Maybe Woz is just honest enough to do his taxes at face value rather than run around and find every loophole that he can.
      • by schnell ( 163007 )

        Maybe Woz is just honest enough to do his taxes at face value rather than run around and find every loophole that he can.

        The headline should more accurately read, "Man Who Makes Lots of Money and 'Was Never Interested In Money' Says Giving More Money To Government Is Not a Big Deal."

        I love Woz, both as a technologist and an interesting (if sometimes slightly loopy) thinker. But for the rest of us who don't make more money than we know what to do with, yes we are going to try to minimize the amount we have to hand over to the government. I have money but not nearly so much that I would ever forgo taking my entitled tax exempti

        • It seems that a person needs to be an accountant, know an accountant, or have enough to pay for an account in order to take advantage of these progressive tax laws which are supposed to help us all.
    • Obviously Woz can afford a whizbang accountant. Maybe he pays 50 percent because he wants to...
  • by reboot246 ( 623534 ) on Friday April 22, 2016 @05:58PM (#51967885) Homepage
    All they do is pass along the cost of the taxes they're paying to the consumer. In the end, all taxes are paid by individuals, whether directly or hidden in the cost of the products and services they buy.

    Do you actually think that Apple wouldn't simply raise their prices so that their profit margin stayed the same? In what world?
    • by zlives ( 2009072 )

      and this is a perfectly legitimate practice. Business is run for profit, tax shell game is to maximize profit. if the shell game is ended and prices rise, the market (consumer) will decide what is fair price/profit for a product and if they are willing to pay it.

      if apple(whatever else) continues to be profitable despite being taxed, then that defines them as a successful business that has a great product... just like it should be.

    • by frnic ( 98517 )

      Well, actually no, this is the theory, the fact is that the companies charge what the market will bear, and then pay taxes, this is why so many companies migrate to locations with tax shelters or tax deferments etc.

    • by careysub ( 976506 ) on Friday April 22, 2016 @06:23PM (#51968069)

      All they do is pass along the cost of the taxes they're paying to the consumer. In the end, all taxes are paid by individuals, whether directly or hidden in the cost of the products and services they buy.

      Not so. Here is what Conservative economist Bruce Bartlett [nytimes.com] (senior policy roles under Reagan and GHW Bush, and served on the staffs of Reps. Jack Kemp and Ron Paul) has to say about corporate income taxes, and who pays them, ultimately:

      For many years, economists assumed that the corporate tax is paid almost entirely by shareholders. This is unquestionably true when a corporate income tax is first introduced. But over time, corporations adjust their affairs so as to minimize the tax, causing the burden to be shifted. For example, companies may try to raise prices to compensate for the corporate income tax, thus shifting some of the burden onto consumers.

      Most economists don’t believe that much, if any, of the corporate tax is shifted onto consumers this way, because corporations face competition from noncorporate businesses, such as sole proprietorships and partnerships, and from businesses based in countries with higher or lower corporate taxes. Competition sets prices for goods and services without regard to the corporate tax rate.

      Now it is true individuals eventually pay the tax, but it is not consumers, it is owners of capital - the investors, or perhaps management if their compensation packages are pinched.

      Do you actually think that Apple wouldn't simply raise their prices so that their profit margin stayed the same? In what world?

      Do you believe that Apple is not already charging what they think the market will bear? In what world? Even Apple products cannot become arbitrarily expensive.

      • You can debate what portion of corporate taxes are paid by customers, what part by shareholders, what part by employees and what part by suppliers, but you cannot argue that it all doesn't get shared out, nor that it doesn't ultimately fall on individuals.

        The fact that it's so hard to figure out exactly where the corporate tax burden lands is precisely the reason that corporate taxes are evil. Taxes are necessary, but it's important that taxpayers have visibility into how much tax they're paying, so they

    • Do you actually think that Apple wouldn't simply raise their prices so that their profit margin stayed the same? In what world?

      This world.

      You can live with lower profits. But to survive you must have sales. That sets a limit to how high you can raise prices.

  • by frnic ( 98517 ) on Friday April 22, 2016 @05:59PM (#51967893)

    But, that is the problem - 34,000 pages of tax code specifically lead to all the issues. We need a tax code that has no social engineering and no exemptions.

    If the government wants to encourage development of Solar Cells, they should grant money to that industry as a separate bill - all by itself.

    The Tax system should not be polluted with all the 34,000 pages of BS.

    We can debate all you want about progressive vs flat vs whatever, but if it can't be describe on one 8 1/2 x 11 hand written paper, then it is too complex.

    • Makes you wonder why the Affordable Care Act is close to that length.
    • In the real world law is complicated. You have to use very, very precise language and lots of it or you have a lot of unintended consequences. You're legal system then goes one of two ways: Either no law is enforced because everyone is afraid of applying the vague language harmfully or law becomes a psychotic crapshoot as laws are applied willy-nilly however a person feels at that point in time.

      You might get away with a flat tax in a few hundred pages, but it's a very, very regressive tax. That means it
    • by Sky Cry ( 872584 )
      Or, instead, there could be negative exceptions only. Government shouldn't be in the business of encouraging development of Solar Cells, it should be in the business of discouraging use of, for example, coal and oil, basically imposing additional taxes on everything that threatens our environment in some way. Let the private sector figure out the best solution, government should just be saying what is a no-go. And that way the worst case scenario is that environment-threatening companies find loopholes to p
  • Bullshit (Score:3, Insightful)

    by acoustix ( 123925 ) on Friday April 22, 2016 @06:04PM (#51967921)

    Nobody should be required to pay half or more of their income to a government. If a person/company wants to do that on their own, then that is their choice. But there's no way anyone can convince me that someone else deserves half or more of the fruits of my labor. And in fact, I think the top rate should be close to 25% with no deductions.

    And surely Woz is smart enough to know that if tax rates are increased for companies that it will only raise the prices of their goods and services. Companies can't and won't absorb that cost of doing business.

    This is not in defense of Apple. I don't care for them.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Large, privately-held business owner here. Business taxes aren't a "cost of doing business". They are levied on profits, and are supposed to raise revenue and encourage companies to invest (spend) their money rather than horde it, which is actively harmful to the economy.

      As an owner or shareholder, you can extract revenue in various ways, and for most of us it makes sense to extract some through income (which is a business expense, so only income taxes are payable) and some through dividends (which are effe

  • The problem with forcing multinationals to pay more taxes on the profits they make in the US is they will simply sell all their products to a division in the country with the lowest tax rates at cost, do all the mark-up there, then sell them back at cost to the US division. No profits on the books in the US means they still pay zero in US taxes. With digital media, it's even easier, since bits can be shipped anywhere in the world instantaneously. Before you raise the tax rates, you need to fix the tax laws.
  • Is this a 50% tax on profits, or gross revenues?

    In either case, I think a 50% tax makes many businesses not viable. Across the US we have huge unemployment issues, and many young people are unemployed. This is a negative situation, and is putting the social safety net at risk. Companies move where the taxes are lowest.

    It appears that many small businesses pay much more in taxes than do the large multinationals employing the double irish with a dutch sandwich [investopedia.com]

    Furthermore, the US already has wor
    • Re:Hmm, a 50% tax (Score:4, Interesting)

      by guises ( 2423402 ) on Friday April 22, 2016 @07:28PM (#51968485)
      Obviously it's a tax on profits and, as such, has no influence on the solvency of the company. The only negative impacts are on cash reserves and on dividends to shareholders.

      For your other stuff: "The tax rate" (total tax revenue) in the US is not high [wikipedia.org], it is 59th among countries worldwide and almost at the bottom among first world countries - only South Korea and Australia are lower and neither are much lower. There's a big difference in how that tax burden is distributed though, with the middle class in the US taking most of it. This leads to a perception of high taxes.

      It is true that companies which have the ability (large companies) will exploit tax loopholes wherever they can, at the expense of smaller companies and other tax payers (the aforementioned middle class). Numerous efforts have been made to close those loopholes but they, like everything else, do not get past congress. This suggestion of a 50% tax is basically just another one of those - like many of the other such suggestions, it could be crafted in a way which would prevent companies from dodging it but the real challenge would be in getting congress to pass it.
    • In either case, I think a 50% tax makes many businesses not viable

      In true capitalism, businesses are supposed to fail all the time. There is supposed to be a regular churn of businesses failing and others taking their place. On the surface this seems bad for people working for these companies, but if the economy is healthy it is actually good because there is always another company that needs that employee and the employee probably makes more at the new company because they are ultimately leaner and better thought out.

      Besides, if a company will fail from making an ade

  • Apple doesn't make the rules, but they have a fiduciary responsibility to their shareholders to use the rules to maximum net profits. If you don't think Apple is paying enough, change the rules to make all companies pay more, e.g. by eliminating R&D expense deductions.
  • Typo in editorial addendum. Apple's CEO is *Tim* Cook, as it says right in the URL immediately following.

    Measure twice, cut once.

  • I'm not an accountant but I've been paying taxes now twice as long as I didn't. Federal I ncome tax is a marginal tax system. Anything above certain levels of income is taxed at the next higher rate. Therefore Woz's Max rate may be 28% for example but only on a portion of his income above whatever the cutoff is for that rate. I pay that rate on some of my income but my EFFECTIVE tax rate, that is the total percentage of my income that I pay, is much lower than that. Of course add in sales tax and state inco

    • by MikeKD ( 549924 )
      Woz said "taxes", not "Federal income tax". "Taxes" can include state income tax, federal capital gains tax, sales taxes, excise taxes, property taxes, etc.
    • Yea, I'm pretty confused how Woz '"pay[s] over 50% of anything [he] make in taxes". Who is paying over 50% in the US? Even combining income tax with sales tax and property tax I still can't see how it happens. (and including property tax is hardly fair when the statement was "anything I make")

      Is he voluntarily donating 50% of his income to the government and calling that his fair tax? Maybe?

  • ...purchasers of apple products should pay more tax.

    I mean, if you run a business, and your costs go up, don't you have to start charging more? Or are they suggesting apple employees should be paid less?

  • I don't see any particular good uses of the tax money being collected by the federal US Government.
    Having once been a US tax payer I used to look at NASA and the US military and think to myself "yep, that's what you are now funding".
    So Apple, Google and all the big earners are forced to pay USG 50% of profit.
    Who exactly benefits from that?
    I own none of those shares but I'd rather see the shareholders get the lot.

  • Tariffs built this country, and paid for most of this country’s expenses for the first 73 years, without having to institute an income tax.

    Apple is hardly the worst offender. In fact, Apple pays more in taxes every year than any other U.S. corporation. Why not question companies like Google or Cisco, who also minimize taxes by keeping IP overseas.

    Or why not focus on FedEx, GE, Honeywell, or the many other corporations who get tax credits every year, so rather than paying taxes, actually get money back

    • by garote ( 682822 )

      That's what really burns me about this scapegoating of Apple. Say what you will about the money staying overseas - it was at least earned overseas by selling physical products overseas. Google has actually signed large chunks of their intellectual property over to offshore subsidiaries in order to dodge taxation of it. That is straight-up smoke and mirrors.

  • Corporations don't pay taxes, they only collect them. That 50% you're calling for comes out of the shareholders' pockets.

    -jcr

  • Seriously, corporate taxes are too easy to hide.
    It is time to cut the tax breaks, cut the not paying taxes when offshore, and at the same time, cut the taxes. By having corporations pay increasing tax up to 20%, we would see more money.
    At the same time, we need to change the dividend tax to 30%. IOW, it should be at similar level as what is paid for wages.
    Ideally, we would ALSO prohibit all executives from owning publicly traded stock in their industry. By doing that, they can properly manage the comp
  • Companies should pay income tax, OR their shareholders should, But NOT both, otherwise the shareholders are paying tax TWICE for the same profits (Once when the company makes them, And again when the shareholder is paid their dividends, Or they sell their units to realize the value increased by the company's profit).

    Also, it is probably preferable that only the shareholders should pay the tax, Because making the company pay the tax is unfair to Low-income shareholders who would be in a lower in

    • Your idea would have merit if corporations could not have cash reserves. They have to in order to function, but it has to be accounted somehow, and they also have to be motivated to reinvest a healthy portion, in which case they won't have to part taxes on it. They can pay those profits out to the share holders and let them pay taxes on their dividends, or they can sit on it and pay taxes accordingly. It is up to them.

      • by mysidia ( 191772 )

        they also have to be motivated to reinvest a healthy portion, in which case they won't have to part taxes on it.

        Why? What's wrong with them holding cash which they might require at any moment, that it should be penalized?

        It would also be satisfactory if they give shareholders a refundable tax credit against dividends for taxes paid by the company, step up in cost basis for their share of taxes paid not credited by dividends.

  • And why are we listening to this loser chump? If he wants to give 50% of his money to the government that is fine. It is perfectly legal for you to pay more taxes than required by law. Go ahead, Woz. Pay my day. But wait, no, he isn't wanting to give up his money! He wants to force other people to do it his way! Ah...! How totalitarian of the Woz of Id.

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