Cupertino's Mayor: Apple 'Abuses Us' By Not Paying Taxes (theguardian.com) 284
An anonymous reader shares a report on The Guardian: Apple pays a 2.3% effective tax rate on its $181bn in cash held offshore, according to Citizens for Tax Justice, a not-for-profit research group focusing on tax policy. Citizens for Tax Justice estimates that Apple would owe $59.2bn in U.S. taxes if the money weren't funneled into offshore shell accounts. Criticism over the company's offshore tax schemes has become more pointed in recent months, both locally in Cupertino and from Apple's own staff. At a recent Cupertino city council meeting, some residents protested about a lack of funding for public projects, Barry Chang, Mayor of Cupertino said: "They ball up the paper and throw it, and they say 'You're making all the wrong decisions'," Chang said. "In the meantime, Apple is not willing to pay a dime. They're making profit, and they should share the responsibility for our city, but they won't. They abuse us."
Not funneled into (Score:3, Insightful)
All of that money is money earned overseas. So it's not "funneled" anywhere, it's just not brought back
Why? Because the government makes it absurdly expensive to bring money back to the U.S. - money Apple has already been taxed on overseas.
Apple has said repeatedly it would be happy to bring that cash back if it had a much more reasonable percentage to pay in taxes on it. So if the government really wants it, it can have that money any time simply by making the tax rates for corporations something more in line with what the rest of the world has.
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really!!! business must be booming in Ireland to account for such profits.
Re:Not funneled into (Score:5, Insightful)
There shouldn't be a negotiation and they shouldn't be asking Apple (or anyone else) to volunteer. There should be a law, the amount owed should be definite, failure to pay would be a crime. That law should apply to everyone, equally.
Until the government, at all levels, fixes their shit, their shit is going to be broken. I am tired of hearing about Apple or Google or Facebook doing NOTHING wrong, but accused of something that sounds like (but is not) a crime.
We have set up a system where there is a game, and good players are going to game the system. So fix the system or fix the game.
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There should be a law that says "if you have any presence at all in our country, all the money you earn in other countries, and that is taxed in those other countries, should be taxed here too?
Sounds like a stupid law.
Re:Not funneled into (Score:5, Informative)
There should be a law that says "if you have any presence at all in our country, all the money you earn in other countries, and that is taxed in those other countries, should be taxed here too?
Sounds like a stupid law.
It is not stupid. As the law stands you deduct taxes already paid to other governments from the tax you own USA. Lets say 100 million dollars in USA. Then Apple sets up a post box in Banana Republic, and parks all the profits there and pays a generous 1 million dollars to the government of Banana Republic. Then it owes only 99 million to USA. The law is intended to prevent a race to the bottom. Competing governments reduce their tax rates to woe the companies and the corporations play one jurisdiction against another.
That is the current law. All taxes paid to all other governments count as though they have been paid to the US government. But, if they tax you less than USA, you pay the difference to the USA. The only glitch is, current law taxes the profits only when they are brought into the USA. So they keep the profits indefinitely off shore to dodge the tax. Hoping for an amnesty and bring it home with a lower rate to wipe the slate clean.
We should change the law to make these corporations that are keeping profits abroad from being listed in US Regulated stock exchanges. That will bring the profits home and they will pay the taxes. Or we could list them as foreign businesses with severe restrictions in lobbying and campaign contributions. That would also create a penalty for gaming our tax code.
Already the corporations have shifted most of their tax burden to the individuals. If the corporations paid the same effective rate as they paid under Ronald Reagan individual tax payers will get an immense tax relief. We can take our personal income tax rates from 36.3% top rate down to 20% top rate or even a flat tax of 15%.
All of them will shout tax cuts. Individuals and middle class gets a few bones thrown to us. The bulk of it goes to these corporations.
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Already the corporations have shifted all of their tax burden to the individuals.
FTFY. Who do you think really pays the taxes on corporate profits? The customers, of course, Taxes are a cost of doing business, and they get passed on just like the cost of electricity or labor.
The only glitch is, current law taxes the profits only when they are brought into the USA.
Why should the US get a tax bite out of profits made outside the US?
Re:Not funneled into (Score:4, Interesting)
In the case of many corporations, a good deal (~40%) of their profits come from overseas. So yes, if heavier taxes were levied on them, foreign nations who purchase goods designed/made by United States companies would contribute to the U.S. tax system. That seems perfectly legit.
Taxes are levied, in theory, on agents who benefit from protections and perks offered by the United States. If a corporation is based in the United States and especially if it's publicly trade in the United States, it enjoys immense benefits and protections offered by the laws of the United States both domestically and abroad. From legal protection of its various properties to the infrastructure built to allow it to operate its design and research centers to the American talent it can draw upon to invent.
The later especially applies to tech companies. Their competitive edge is gained by hiring the talent available to them in the United States. Why shouldn't their profits -- no matter where they earn it -- that is derived from the inventive and productive power the US offer be taxed to benefit the system they've benefited so much from?
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I think a big part of the problem is how people and companies define "earn". Microsoft for instance produces most of its products out of offices in Redmond. Those products are then licensed to customers through a relatively tiny office in Nevada or somewhere that has a much lower tax rate. By doing this Microsoft can claim all of their profit in a State that minimizes their tax rates, and they get to claim the Redmond offices as a loss because they don't bring in any profits, even though it is the Redmond o
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Already the corporations have shifted most of their tax burden to the individuals. If the corporations paid the same effective rate as they paid under Ronald Reagan individual tax payers will get an immense tax relief. We can take our personal income tax rates from 36.3% top rate down to 20% top rate or even a flat tax of 15%.
Nonsense corporations don't pay taxes, not really. If you close the loop holes and make them really pay the 35% rate it will only hurt the middle class. Prices of goods and services will rise wherever the costs can be passed on. In certain highly competitive markets that won't happen but in most it will. What is certain to happen in more wage stagnation while inflation marches on.
What we need to do is kill the idea of income and profit taxes! Taxation should occur on the consumptive side.
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We should change the law to make these corporations that are keeping profits abroad from being listed in US Regulated stock exchanges. That will bring the profits home and they will pay the taxes.
I don't see much of a relationship between having off-shore profits and the stock exchanges, so I'm not really fond of this plan. Plenty of companies are privately owned and they would not be affected.
Or we could list them as foreign businesses with severe restrictions in lobbying and campaign contributions. That would also create a penalty for gaming our tax code.
Now you're talking. I'm not entirely sure how to implement the cutoff. Keeping $1 out of $100B offshore shouldn't qualify them as foreign, but keeping $1 out of $100B in the US shouldn't exempt them from such a law. Should it be based on a dollar amount, a percentage, or some other criteria? It's importan
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It is still stupid.
If corporations are allowed to pay tax on "profit" then they will continue to game the system. Make them pay tax on income - in the territory that they earned the income. Then there is no game to play.
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That is the current law. All taxes paid to all other governments count as though they have been paid to the US government. But, if they tax you less than USA, you pay the difference to the USA. The only glitch is, current law taxes the profits only when they are brought into the USA. So they keep the profits indefinitely off shore to dodge the tax. Hoping for an amnesty and bring it home with a lower rate to wipe the slate clean.
As I understand it, the law also restricts your tax obligation to profits, and by using financial tricks like the 'double Irish with a Dutch sandwich' method, companies can shift revenues that would have been counted as profits and taxed in the US overseas through a country that levies a much lower tax rate, and then ultimately into a tax haven, so that a company that would otherwise be paying $10bn in US taxes might take 90% of their putative profit, send it to an overseas corporation in a low-tax country
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It may not be stupid, but it makes American companies less competitive compared to their foreign competitors. A British company will pay 20% tax on its profits from the UK, 35% tax on its profits from the US, and 15% on its profits from Germany. However, if this company was headquartered in the US instead, it will simply pay 35% tax on all profits worldwide, making the US company less competitive.
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It is not stupid. As the law stands you deduct taxes already paid to other governments from the tax you own USA.
This only applies to countries that have tax treaties with the US.
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They pay in each country according to the transactions in that country. What you say is pure rhetoric any politician can use anywhere in any country.
Now every fucking country is taxing all income or profits because They Are So Damned Special to the global success.
Re: Not funneled into (Score:3, Insightful)
Re: Not funneled into (Score:5, Informative)
Apple is already the top taxpayer in [...] the whole fucking country!
Then why does Forbes list Exxon and Chevron as paying more tax? http://www.forbes.com/pictures... [forbes.com]
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The politicians who have the power to fix these issues have negative incentives for fixing this issue. The flow of money from corporate campaign donations would magically funnel to candidates who completely coincidentally oppose fixing the tax code.
This is why campaign finance reform is such an important issue. The corruptive nature of all that money from corporations and rich folks is skewing our public policy.
Re:Not funneled into (Score:5, Insightful)
> We have set up a system where there is a game, and good players
> are going to game the system. So fix the system or fix the game.
Any time you establish rules, people will figure out how to use those rules to their advantage. Money is a self-feeding machine -- the more money you make, the more you can spend on accountants and lawyers to help you figure out how to make and keep more money. (And no sense mentioning that once you have enough money, you can start buying the laws you want anyway.)
Tax based on profits? OK, we'll figure out a way to keep our books to show no profit. Tax based on sales? OK, we don't sell things, we lease or rent them. Tax based on cash hoard? OK, we'll figure out a way to spend every penny we make. Number of employees? Sorry, we only have contractors. Executive pay? Our executives make $1/year, and then we give them stock and benefits. Etc etc etc.
Every rule, by definition, will give SOMEONE an advantage. Any entity with money *will* figure out a way to make sure that "someone" is always THEM.
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Just have a body that enforces the spirit of the law. If anyone is in any doubt, they can just ask and if necessary argue it in court up front.
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There should be a law, the amount owed should be definite, failure to pay would be a crime.
There is, and the tax code does. Its just that its a very complex set of rules. You and I can play chess, who wins depends on who leverages the same set of rules better. You and I can play tick-tack-toe and unless one of us isn't paying any attention at all, whoever goes first will always be the winner.
You can argue the tax code should be more like tick-tack-toe, clear and offering predictable outcomes. I agree it should be that. Because the tax code we have to day leaves all kinds of room for 'avoidan
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You and I can play tick-tack-toe and unless one of us isn't paying any attention at all, whoever goes first will always be the winner.
I hope that tick-tack-toe is a different game involving ticks and tacks, and not the tic-tac-toe I know. Because if both players are over 5 years old and have an IQ over 50, the game I know is always drawn.
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We tax corporations heavily while taxing the populace (comparatively) lightly [taxfoundation.org]. To add some perspective, one thing taught to me early on is "you work one week a month for uncle sam" implyi
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Seriously???
I pay easily in the 33% tax range...not including all the sales tax, gas tax and other essentially double taxation bit of money the city, parish, sta
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Re:Not funneled into (Score:5, Informative)
Don't know why this is marked as being a Troll, it's factual information. The US is the only developed nation in the world that taxes companies based on worldwide profits, not just profits earned in the US. Yes, you get a tax credit for income tax you pay to other countries, but the end result is you end up paying the high US corporate income tax rate on income earned everywhere in the world, whereas foreign companies only pay the high US tax rate on income earned in the US, and the lower tax rates of income earned in other countries. This makes foreign companies a competitive advantage over US companies. Not a great policy in my opinion.
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Re:Not funneled into (Score:5, Informative)
All of that money is money earned overseas. So it's not "funneled" anywhere, it's just not brought back
US profits are funneled through a Nevada subsidiary because Nevada doesn't have a corporate tax.
http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html [nytimes.com]
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All of that money is money earned overseas. So it's not "funneled" anywhere,
It's funneled to Ireland to not funnel it to the US.
the government makes it absurdly expensive to bring money back to the U.S.
That's why arbitrage should be illegal. I don't care if you don't want to bring money back to the US, but if that's your stance, then move your offices to Ireland. Having a PO box in Ireland (and maybe some accounting contractors) isn't a nexus. Apple is so proud of "designed in Cupertino" until the sale is made, then it's "based in Ireland".
That is a fraud, and should be punished as such.
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Fuck off ass-hole.
Re: Not funneled into (Score:2)
They create a foreign shell corp and give it IP. The shell collects royalties on worldwide sales which just happen to equal profts.
Result is that there are no profits for the US or CA.
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A lowering in currency rates, could also mean a big windfall, if they invest a lot into it, and the Euro improves.
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Is this the world's worst haiku, or were you just really out of breath?
Apple saves 4.5% even with Euro devaluation (Score:5, Interesting)
But with the crash of the Euro, it would be have been less expensive to bring it back and pay the taxes. Only a fool keeps cash in the Eurozone.
No, its less expensive to take the 18% loss in EURO/USD exchange, 1.35'ish to 1.1'ish in the last 10 years.
http://www.xe.com/currencychar... [xe.com]
So with a US tax rate of 35% and an Irish tax rate of 12.5%, Apple would owe the US government the difference, 22.5%.
http://www.cbsnews.com/news/ap... [cbsnews.com]
So they save about 4.5% even with the Euro's devaluation relative to the US dollar.
Consider that Apple has expenses in the Eurozone so that local cash can be used to pay those. Plus any new expenses, new stores, new R&D facilities, any acquired EU based companies, licensing any EU based tech, etc. The point (or problem from the US perspective) is that with all that cash "stuck" in the EU Apple will naturally look at ways to spend that cash in the EU. US tax policy encourages US corporations to expand overseas rather than bring those profits home to the US.
Now consider a 15% tax rate on overseas earnings. Apple would only owe 2.5% to the US government. Fear of currency devaluation would matter. The barrier to bringing those profits home would be negligible. But its not just the money collected by the US government through taxes, now that money can spur economic activity in the US rather then the EU. More R&D in the US, more acquisitions in the US, etc. Those robotic factories that are going to disassemble devices for recycling? Maybe those robots could be used for assembly too and we could have more manufacturing in the US, some low volume Macs are assembled in the US. Money is flowing in the correct (US perspective) direction with respect to foreign trade deficits.
Maybe make that 15% tax rate conditional on re-investment in US based plants, equipment, research, etc?
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Vote accordingly.
Vote for whom? Everybody knows that America's system of corporate tax is totally dysfunctional. We have the highest corporate taxes in the world, yet collect very little because of all the loopholes. We give companies a huge incentive to create jobs anywhere but in America. Both parties recognize this problem, and there are plenty of proposals to fix it. But they all get caught up in the political gridlock, so nothing changes.
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they all get caught up in the political gridlock
No, you meant to say "They all get caught up in campaign financing"
Vote for Bernie!!!
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Vote for a person who is not your current congressperson. Get others to do likewise if possible.
Last election cycle: 94% re-election rate; 14% satisfaction with congress.
As long as these elected officials continue to work to convince their constituents that it's always the other congress-critter's fault, there will be no change. There's no reason for them to change their behavior as things stand right now. Tell the new guy that if he doesn't knock off the corporate "donations", he'll lose his
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Hey, it makes sense.I don't know if 15% is the magic number, but I'm thinking it is likely in that ballpark....
However, if nothing else...you can NOT blame a company or a person, for taking advantage of every legal tax law to save as much of their hard earned money from the tax man.
I mean, do everyone one of ya'll, take every deduction you possibly can, or do
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Google "Hollywood Accounting"
The solution to "Hollywood Accounting" was for performers (starting with Jimmy Stewart) to demand a percentage of gross revenue rather than net profit.
The solution for taxes should be the same. Gross revenue is way harder to manipulate than profit. Taxing revenue is also more fair: If two companies have similar revenues, then they likely use a similar amount of public resources and infrastructure, although one may be much more profitable than the other. Taxing profits just punishes success while subsidi
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Well, it *does* have to be profit I think in some manner with companies.
Otherwise you'd penalize business that might indeed be quite import
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Pretty erroneous reasoning there Bufford.....
Rape physically harms people...hence it is against the law and no "loopholes" are there if you are found guilty of it.
I'm talking about tax law, where the laws say you CAN legally do xyz, and pay less taxes.
It was legally put into the code and law, and there is nothing wrong with you taking advantage of this to keep more of your hard earned money.
Thanks for playing, please try again.
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Yes, your reasoning is sick. Let me know if you actually want to make a comment on my reasoning.
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Well, good for you. However, that's not the law. If you wish to change things, you need to have your congress critters change the "technically" to be the same as the "right and proper". Until then, you cannot fault most people for following the law as written. It isn't up to you or the govt to legislate morality on what is right and proper, in terms of money
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This is not Apple's fault. This is congress's fault. Period.
Vote accordingly.
Exactly.
And keep in mind that EVERY ONE of those Tax Loopholes was HAND-CRAFTED to benefit some sycophant Congresscritter's personal Master. And guess what? I would be willing to bet that Apple's "name" is not tattooed on even ONE of those sycophant's backsides.
Apple's just following the rules as written, like every other multinational corporation. They have absolutely NO legal, moral, nor fiduciary duty to pay one more dime in taxes than they have to.
Just like you and me. The only difference is, most
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Bingo. Apple expects a big return on all that lobbying money they've been spending in DC.
Actually, especially considering their net worth, Apple doesn't really give all that much [opensecrets.org] to lobbyists.
Dealing with the devil (Score:5, Informative)
Hmmm .. from Apple's new headquarters gains approval of Cupertino City Council [mercurynews.com] back in 2013
The Cupertino City Council voted unanimously Tuesday to reduce the annual tax break it gives Apple (AAPL) -- America's most valuable company by market capitalization, with a net income last year of $41.7 billion -- by 15 percent. Having wrung that concession from its richest corporate resident, the council then voted unanimously to give its final blessing to Apple's proposed new headquarters. The spaceship-shaped building has now officially landed.
Back in 1997, when Apple was on the verge of collapse, the city agreed to return 50 percent of the taxes generated each year from Apple's business-to-business sales as a way to help maintain the company's health and, more importantly, its Cupertino address.
Sounds like someone made a deal with the devil and now has a bit of buyers remorse.
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Seems pretty reasonable to drop that exemption now that apple is doing find and has invested in a new headquarters in your town. I can understand why they gave the exemption in the first place, apple being there meant rich engineers and managers living in the town paying taxes and you didnt want to lose them, but now, they are strong and aren't going anywhere.
Also, how can Cupertino be broke, I would imagine property taxes there would be through the roof, housing prices certainly are.
Comment removed (Score:5, Insightful)
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They can't even afford to build new public schools.
So, first off - the school district isn't "owned" by the city council. As far as I know - the city doesn't pay a dime for the schools here, it is all funded by a block of money from the state from property taxes that is used to pay for the school system.
Second off - the Cupertino schools consistently rank as the top high schools in California. To say that there is a lack of funding would be a travesty. The schools appear to be adequately funded and staffed with a superior outcome.
Third - if the schoo
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> Also, how can Cupertino be broke, I would imagine
> property taxes there would be through the roof,
> housing prices certainly are.
Prop 13.
The baby boomers decided a long time ago that they would rather take a few extra vacations every year than fund the schools and infrastructure that would enable the following generations to enjoy the same level of wealth that they were handed by the WW2 generation.
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> Also, how can Cupertino be broke, I would imagine > property taxes there would be through the roof, > housing prices certainly are.
Prop 13.
The baby boomers decided a long time ago that they would rather take a few extra vacations every year than fund the schools and infrastructure that would enable the following generations to enjoy the same level of wealth that they were handed by the WW2 generation.
Oh please. Prop 13 encourages people to stay in the same place a long time. You don't get to transfer your prop 13 tax rate unless you qualify for social security. How many people stay in the same house for 30+ years? If you want to upgrade, your property tax goes up just like everyone else. Prop 13 keeps people who have lived in California (and especially the Bay Area) a long time from having to relocate because people seem to think they've got money to burn in the bay area these days. I don't think
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Reagan had zero to do with Prop 13. Prop 13 passed in '78. Jerry Brown was Governor and had been since '73. Reagan was not holding any office at the time.
Prop 13 came about because of Howard Jarvis and Paul Gann.
And yes, people WERE being forced out of their homes at the time because property taxes kept getting jacked. That's why there was a competing proposal (Prop 8) on the same ballot.
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Same happens all over.
Here in Oregon we recently saw Intel flex there muscle to get special tax breaks for a major fab expansion. Nike is surrounded by the city of Beaverton, but uses threats to leave to prevent annexation that would make them pay the same property taxes that all their neighbors do.
Major employers can use blackmail to get major concessions. Hell, Boeing got concessions a few years back up in Washington and moved much of the operation anyway.
Basically once a business gets big enough it can
Just a matter of time (Score:3)
Companies like Apple or Facebook that are basically IP and IT driven will soon anyway found their own "countries" on floating islands.
Tax their products ... not their money/earnings, that is much easier.
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You crazy kids...
Not islands... (Score:2)
Don't be evil (Score:2)
An open letter to Mayor Chang of Cupertino (Score:5, Insightful)
Dear Mayor Chang,
What part of "building permit" and "property taxes" don't you understand? If you folks let Apple build a giant doughnut in Cupertino [dailymail.co.uk] without the city collecting adequate local taxes on it, you can hardly blame us, can you...?
your friend,
Tim Cook
Re:An open letter to Mayor Chang of Cupertino (Score:4, Interesting)
I know San Jose was licking its chops at that idea since they have been trying to get Apple to move its corporate headquarters for years.
Fast forward several years later, Apple is bringing 4.15-million square feet of office space to North San Jose over the next 15 years. In comparison, the Apple HQ in Cupertino is only 2.8-million square feet.
http://www.sfgate.com/business/article/Apple-gets-green-light-for-massive-San-Jose-6786465.php [sfgate.com]
big wheel keep on turnin (Score:5, Insightful)
City Government: Please come to our city, Big Business! We'll give you incredible tax breaks! We'll practically pay you just for existing here!
Big Business: I don't know. That "practically" sounds kind of hesitant. Besides, there's a bunch of other towns down the road that might offer us a better deal.
City Government: Fine, we will literally pay to just to keep your corporate headquarters here. We'll give you the land for a pittance. We'll fast-track the permitting process. We'll give you a zoning variance. None of the city ordinances will apply to you. And no direct taxes on you, we promise. We'll make it up by taxing our citizens, who will probably mostly be working for you from here on out.
Citizen: Hold on. I was busy with my life just then, but it sounds like you're going to let some huge company move in and take over, and use my taxes to build a new thirty-story corporate headquarters in my front yard, and then crank up my taxes even more to make up for the taxes you spent on them?
City Government: Yes, but you'll be able to afford it, because you can get a good job at the company!
Citizen: I like my job now. I don't want to fucking work for those fuckers. I don't want a bunch of douches coming in and putting in 17 Starbuckses on the same street and making us all have to sort our garbage into eight separate bins and raising the rents to ridiculous levels so we have to all move out.
City Government: We hear your concerns. But we really want more tax money to play with. So, fuck you. Leave town if you want. Don't let the screen door hit you on the way out.
[Decades later.]
City Government: Hey, Big Business, uh, while our tax revenue has been growing continuously for decades now, it turns out that our expenditures have been growing even faster, because it turns out that a lot of money is not infinite money. We need infinite money. All our planning is based on infinite money. You need to give us more money. That'll get us closer to infinite money.
Big Business: Fuck you. Learn to do math, assholes.
City Government: I'm afraid we really must insist. We're going to raise your taxes.
Big Business: Then I guess we'll just move down the road to the next city. See you later.
City Government: But... but... you can't!
[But it turns out they can. Return to top and start again.]
Close the roads and utilities (Score:2)
Where do local city revenues come from? (Score:4, Insightful)
So all those high paid Apple employees don't pay property taxes on their homes in the area? They don't pay sales taxes on the stuff they buy around town?
How does a local city government think it is entitled to tax revenue earned on sales in (other country) after the company already paid (other country) income taxes?
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Maybe the local city government thinks it works for the federal government so why not give it a go?
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So all those high paid Apple employees don't pay property taxes on their homes in the area?
"In the area" doesn't necessarily mean the City of Cupertino. Lots of Apple employees live in San Francisco, for example, which is in an entirely different county than Cupertino. And in fact, Apple employs more people in the US than the entire population of Cupertino.
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The only shopping mall that they have in Cupertino has no stores, unable to compete with other shopping malls in the region. No stores = no sales tax. The newest proposal is to convert the shopping mall into a mix development of shops and housing. With the new Apple HQ down the street, it makes sense to throw in more housing. However, less sales tax.
http://www.mercurynews.com/cupertino/ci_29822286/vallco-mall-empties-out-tenants-begin-settle-elsewhere [mercurynews.com]
Thou will take what Father Steve giveth (Score:2)
And thou will not complain!
Silly Mayor (Score:2, Insightful)
No local taxes, no civil services (Score:2, Redundant)
If a corporation pays zero local taxes, then why is it entitled to these civil services for free? That's corporate welfare.
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Apple pays 18-20% of Cupertino's tax revenue + any thing contributed by local employees. Does that mean they should have 20% of the services dedicated to them.
They're throwing money away (Score:2)
Most of Apple's value isn't in those foreign banks, or in domestic ones. It's quite invisible to bankers if not to marketers. It's Apple's rather remarkable reputation and the willingness of so very many people to believe that it's worth paying Apple $500 for functionality others will sell you for $300.
Getting people pissed at Apple to save a few tax dollars is like throwing out the car money to save the milk money. But it's the kind of incredibly, obviously stupid shit that megabuck CEOs do all the time,
Mayor Should Do His Job (Score:2)
Cool how TFS is just the red herring from the article and nothing from the actual premise. It is all crap anyway.
I agree (Score:3)
"They're making profit, and they should share the responsibility for our city, but they won't. They abuse us."
Frankly, I agree.
Stashing your money offshore is done for one reason: to avoid taxes.
Big companies like Apple can get away with it but you and I can't. If you or I tried to do this we'd be prosecuted for "tax avoidance".
What about GE? (Score:3)
Apple seems to be front and center in this debate but what about General Electric? http://www.sanders.senate.gov/... [senate.gov]
"From 2008 to 2013, while GE made over $33.9 billion in United States profits, it received a total tax refund of more than $2.9 billion from the Internal Revenue Service.".
Not only did GE not pay any corporate tax they got a $2.9 billion dollar REFUND from Uncle Sam (i.e. you and I).
I'm not blaming GE, or Apple for that matter, for trying to minimize their tax burden. But when politicians start jumping up and down about it - about a tax system that THEY crafted - it seems to me the blame is misplaced.
The whole system is rotten to the core and both Republicans and Democrats are to blame for this. It seems to me there are one of two ways to fix it. Either go to a flat tax system for both individuals and corporation or just outlaw lobbyists entirely and get the dirty money out of the system.
Humanity needs a Wealth Tax (Score:4, Insightful)
Middle-class doesn't stockpile money anymore, much like the poor.
Only wealthy individuals and corporations do, and it's a huge detriment to society.
Assets stockpiled (held in excess) anywhere should be taxed to prevent an economy from drying up when a handful of The Rich have everything.
It's called a Wealth Tax. France has it. America needs it.
Without it, humanity cannot survive a fully-automated economy. Since 2008 America experienced a "Jobless Economic Recovery" via automation. This isn't Science Fiction, it's today. Humanity needs wealth taxed.
Re:Where Earned (Score:4, Insightful)
Agreed, except this isn't how US corporate income taxes work. The reason Apple has all that cash parked overseas is that the US wants to tax Apple profits on products sold everywhere, not just in the US.
Even if we made the change to the US tax system that you suggest (move to a where earned from a HQ model), corporate taxation would still be a complex topic. If Apple sells an iPhone in Germany, it should pay taxes in Germany on that profit. But how much profit was really generated there? What's the "right" cost of that iPhone to Apple's German subsidiary?
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If Apple sells an iPhone in Germany, it should pay taxes in Germany on that profit. But how much profit was really generated there? What's the "right" cost of that iPhone to Apple's German subsidiary?
I think the general agreement is that there is no easy answer to that, but that the current answer is "Not Fucking Ireland".
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Originally, the tax location for a corporation was where the offices of the CEO were (not explicitly, but in practice). A large English trading company was treated like all sales were made at the corporate HQ. Of course, back then, the taxes were also structured differently.
Yes, but that was back when the sun never set on the British Empire and England controlled 1/4 of the planet.
They could get away with that back then.
Today, it is America trying to do it (worldwide taxes), but America is trying to do it without... Empire...
It is a crappy half-assed solution that needs to go away.
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The US kinda sorta wants an Empire, without the emotional baggage that comes along with it...
Either do it all the way, or don't... this half-way solution is stupid...
Note: I'm not supporting either position, I'm simply saying that in this case, the middle isn't the place to be.
Either go full-on British Empire and control 1/4 of the planet, or don't. But don't try and run the place without owning it.
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Where does a sale occur? (Score:2)
If I walk into a store and buy a product off a shelf, there's little controversy over where the sale takes place*.
However, if order a book from Amazon and it is sent from California to Oregon, in which state has the sale occurred? From Oregon to California? How about if I order from Amazon.co.uk and it ships from Manchester? Is it the same answer or different if I buy an ebook and download to the US? What if I download form Amazon.co.uk to a machine in the UK then move it from there to the USA?
If I purchase
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Flip side (Score:2)
the government's inability to live within its means.
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Not that I disagree -- especially the bay area city governments. But one could totally see the argument that Apple uses up huge, vast swaths of infrastructure in the city of Cupertino and thus, should rightfully be asked to pay a proportional share for it.
I could see a progressive scale where corporations based in cities that make above a certain amount of money should be made to pay taxes proportional to its number of employees, square footage of land owned/leased and resources used (sewers, electricity as
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Well maybe if we prioritized our citizens over overseas military adventures and more toy boards for the admiralty to play with we would.
In short, our political system has largely been captured. The military industrial complex has huge sway, as do the top 0.1 percent who largely fund our elections. These powerful entities have undue influence to make sure their taxes are low (or negative), while getting their geopolitical will imposed (Joe Sixpack never asked for the TPP or any of the complex taxation loop
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They seem to forget that corporate taxes are tiny.
Apple's money winds up funneled to Chinese workers, support reps, Apple Store retail employees, shipping companies, advertisers, and the like. All of the things involved in Apple's product sales are costs representing human labor time; each individual business supplying said product or service has its own price, higher than the cost. You aggregate them and you get a gap between cost and price, with an aggregate cost paid out as wages on labor and an agg
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If you were not trying to destroy companies with overbearing tax rates they wouldn't need to use LEGAL routes to reduce the burden.
Never mind that corporations paid a 90% tax rate in the 1950's.
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Huh? The top individual tax rate in the 50's was 91%, not corporate. The top corporate rate was around 50%.
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The top individual tax rate in the 50's was 91%, not corporate. The top corporate rate was around 50%.
You're correct. I get the two confused sometimes.
http://federal-tax-rates.insidegov.com/l/35/1950 [insidegov.com]
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and notice how development skyrocketed in the 80s as taxes fell???
See how the middle class shrunk, real wages stayed stagnant and infrastructure fell apart?
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[...] some praise this system... then you complain [...]
It's the American Way.
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The 180+ billion dollars we are talking about are corporate profits that have basically never been taxed. Some of this represents profits generated in other countries, but much of it was profits from the US that was moved off shore. Apple sells intellectual property to subsidiaries in tax havens for a low price, then leases the technology back to its US based divisions at high prices. The books for the US based entities therefore show low profit and are barely taxed, even though Apple, as a whole, is rak
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From TFA Apple is directly responsible for 18-20% of Cupertino tax revenue.