Ask Slashdot: Could Apple Survive If It Had To Pay a 30% 'Apple Tax'? 148
theodp writes: With Apple threatening to remove crowdfunding app Patreon from the App Store unless they use Apple's own in-app purchasing system (and make the required 'protection' payments), it's interesting to consider whether Apple could survive if it was subject to a 30% 'Apple Tax' on its own revenue.
In its 2023 fiscal year, Apple reported a net income of $97 billion on total revenues of $383 billion. Which is very impressive, but what if Apple had to pay 30% of its revenue -- $115 billion -- to a third party? Could even the most profitable company in the U.S. survive a 30% 'Apple Tax'?
In its 2023 fiscal year, Apple reported a net income of $97 billion on total revenues of $383 billion. Which is very impressive, but what if Apple had to pay 30% of its revenue -- $115 billion -- to a third party? Could even the most profitable company in the U.S. survive a 30% 'Apple Tax'?
Apple tax? (Score:5, Funny)
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They couldn't even survive if they paid regular tax.
Apple is the largest income tax payer in the US. Apple paid a little over 17.4 billion in income taxes to the feds last year. Of course, that doesn't even scratch the surface of all the sales tax, licenses, property taxes, etc. that they had to pay.
But you just keep spreading fud, because we know your comment was about "the feels" and not reality.
Re:Apple tax? (Score:4, Insightful)
Re: Apple tax? (Score:2)
That's the company FICA contribution. 6.2% of wages. The witheld income tax comes out of your paycheck. In other words, the company actually pays nothing.
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We found the guy who doesn't understand how corporate income taxes work.
Corporate income tax? Ow! My sides!
Re: Apple tax? (Score:2)
You mean corporate profit taxes?
Re:Apple tax? (Score:4, Interesting)
The share of tax your employer pays on your income is higher than the share you pay yourself, unless you filled out your W-4 really weird.
Nope. They pay only the employer portion of Social Security and Medicare, which is exactly the same amount as what you pay. But on top of that, you also pay federal income tax. The only way you could pay less than your employer pays would be if you somehow had so many tax credits that you got money back from the federal government beyond everything that you paid for the year. For example, if somebody earned $2000 and somehow still was able to get a tax credit for installing a $12,000 solar generation system on their house, this might theoretically occur. But of course, this is so unlikely that it has probably never occurred.
If you are talking about corporate income tax, companies don't pay taxes on any money that the corporation pays out, so by definition, they did not pay any corporate income tax on your salary.
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Self-employed people generally find this out the hard way (they're responsible for 100% of their FICA taxes) and try to spin it as the 'Guvmint taxing success or some such.
Your post is completely wrong.
Re:Apple tax? (Score:5, Insightful)
Is a 17% tax rate expected? Net income is $97bn as per the summary, that feels low. Federal alone is 21%, and they're HQ'd in California aren't they (8.8%)?
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Well done, spreading deliberate misinformation in order to accuse someone else of "spreading fud". Love it when people tell us they are bad faith liars.
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Re: Apple tax? (Score:3)
Yep it's the same shit with taxes on the rich. They cry that they're paying 70% of the taxes, which is not only not true (it counts only federal income tax) but they are also running off with 90% of the money, so even if it were true it would be less than their share.
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They couldn't even survive if they paid regular tax.
Apple is the largest income tax payer in the US. Apple paid a little over 17.4 billion in income taxes to the feds last year. Of course, that doesn't even scratch the surface of all the sales tax, licenses, property taxes, etc. that they had to pay.
But you just keep spreading fud, because we know your comment was about "the feels" and not reality.
The power of Microspft compels him - What he doesn't realize is his deep seated need to have an enemy to hate. His joy would be fleeting if Apple was eliminated - then the ennui would set in as he has to find a different company to hate with a deep abiding passion.
Thew whole subject here is a non-sequitur anyhow. Why in the name of the hot steaming taint of Beelzebub would Apple have to pay themselves a tax?
The answer then is yes, they would survive, because they are sending that 30 percent tax - to
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Apple is the largest tax payer because it earns a LOT of money, it doesn't address the statement that apple doesn't pay regular tax at all it just deflects it.
From the net income of 97 billion 17.4 billion that is 18% tax if they where a person they would should be paying 37% tax from here https://www.irs.gov/filing/fed... [irs.gov].
That being said of course they would survive. You pay tax on profit, although regular people can't deduct cost necessary for work like travel, clothing that is required for work, I am not
No, Apple doesn't pay enough tax (Score:2)
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Re:Apple tax? (Score:4)
If you are buying movies from Apple, then the 30% commission makes sense to cover their hosting and bandwidth costs. But you have to pay 30% commission even when you are providing your own hosting and bandwidth, and Apple are only providing payment processing services. 2-3% would be more reasonable in that situation.
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You're paying for Apple to put your app on a store that their entire iOS user base can access, ie global distribution to a very large group of customers with a high propensity to spend (not least because Apple consumers feel comfortable to make payments via the App Store because they trust Apple to look after their credit card details). You're also paying for Apple to build funky APIs and hardware capability that enable your app to do funky things. All of that is not accounted for in your 2 to 3%.
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You're paying for Apple to put your app on a store that their entire iOS user base can access
Then allow people to use alternative app stores. Problem solved. Charge developers for reviews if you want. Our telemetry shows that typical Apple reviewers spend less than a minute "reviewing" the application.
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Its a hypothetical question, could apple survive if they had to pay 30% of the revenue (not profit) as tax, its imposing a 30% tax on everything a software company sells through their store, if that was extended to them what would their financial situation be.
Its like saying if company 30% the price of every sale of orange, then posing the question what if that company sales where taxed at 30% as well, then saying oh no that doesn't count that company also sells apples.
Point 3, if apple allowed people to pr
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POINT 2. Not all digital goods pay 30%, about half pay 15%, which makes the net average 22.5%.
But that is not all profit. For that money, Apple has to pay for datacenter space to manage the distribution of digital goods. It also has to maintain the team that qualifies the digital goods for acceptance into the App Store etc. That means checking for copyright infringement, code quality, geographic regulations, terms of use violations, spyware, malware, data exfiltration, and user monitoring, use of unsupported APIs, bitcoin mining, etc.. That is not free.
Apple already charges a developer access fee just to be allowed to use the store. The only reason to charge 15-30% on top of that is because of greed, useless engineers, and retarded executives. Apple doesn't have any people of any kind of worth working for them. The world wouldn't be any different if Apple and everyone working for them sudden and spontaneously combusted, and no one would be missed.
What you say is so asinine, you can't possibly even believe it yourself.
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The overcharge for their hardware. They overcharge for development while not actually providing much of anything useful back to the developers. The only people worth anything in the company is their marketing department and it's the only reason Apple survives. The app store, and everything related, doesn't cost anywhere near as much as they rake in from the developers, nor does the app store itself even need to operate on a profit (and, no, I'm not suggesting it runs on a loss either).
Sez you.
Now what?
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Says facts.
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They all are.
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Lmao, I wouldn't even want my shit to go near Apple let alone willing subject myself to their terrible products. I wouldn't even work for a company that uses Apple products.
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If they can't survive paying taxes like the rest of us, then they should die.
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They got some tax wizardry deal with Cupertino where Cupertino surrenders 35% of sales tax generated by apple back to apple.
https://appleinsider.com/artic... [appleinsider.com]
Re:Apple tax? [Why not corporate cancer tax?] (Score:2)
Good FP, though I'm surprised the Fanbois didn't mod you a troll. You even got the appropriate Funny mod for it.
However, I think this is actually a troll AskSlashdot: "Look not at the mirror." (Especially important warning for certain fake Republican politicians these years?)
However, I also think you raise an important question. I'm not saying that corporate cancers should be taxed to death, but just taxed to the point of being less cancerous. So here's the idea: How about a progressive profits tax mostly l
It's made everybody else pay (Score:2)
the 30% Apple tax [9to5mac.com]. Time to experience what it feels like, Apple.
Um, it already does? (Score:4, Interesting)
Cost of goods sold isn't paying part of revenue to "third parties"? Salaries aren't "third parties"? Payments to utilities aren't to "third parties"?
I think the complaint here is that it's a fixed percentage, rather than a fixed price. I would tend to support that argument - instead of a percent, if Apple just charged $1 per install or whatever, that would be more like "this bolt costs $1 each."
Folks don't like this though, see how Spotify and Epic are screaming about the Core Tech Fee which is a fixed price... so basically this is just people screaming because it's Apple.
Re:Um, it already does? (Score:4, Insightful)
Critical difference here. All the other entities pay those costs too. They're paying for their own salaries, utilities, taxes, etc. In addition to all those, they are also giving a 30% cut of the revenue to Apple, because reasons.
The contracts with the various distribution gatekeepers also have a "favored nation" style clause so people can't charge less elsewhere, or otherwise take steps to mitigate the damage done by that extra 30%. If they sell on multiple app stores the rate on various platforms (Apple, Amazon, Steam) all must be the same as the lowest price offered anywhere, under penalties of having the prices automatically lowered with a penalty paid to the platform gatekeeper, or delisted from the platform.
The question is valid, and the point remains. The various gatekeeper platforms that today are charging 30% likely would not have survived themselves if they were forced to pay a similar gatekeeping rent back in the day. Much of their early days were just barely scraping by, and later once they established themselves as gatekeepers it was the enormous revenues from the monopoly role of platform gatekeeper that brought in the riches.
Re: Um, it already does? (Score:4, Insightful)
Cost of goods sold isn't paying part of revenue to "third parties"? Salaries aren't "third parties"? Payments to utilities aren't to "third parties"?
Uh, just a handful of postal addresses in The Netherlands host 1000s of large corporation's IP rights holders. A good share of every Apple product or service sold is forwarded by Apple Inc to Apple BV in the Netherlands which owns all Apple IP. Zero tax in the Netherlands for income on IP.
The same goes for their data centers, storage, stores, you name it. The monolithic Big Brand you think you know isn't a single entity like your local no-brand grocery store (if that still exists), it's a ton of subsidiaries hosted in and letting it flow in most hideous places as to 'optimize tax'.
Sure, taxes are paid on salaries for sales folk in Apple stores. I wouldn't be shocked, however, that that Apple BV in .nl charges tons for the Apple logo on their shirts so these stores run at loss.
That being said, there is no way for sales in apps on an Apple device to escape the tax imposed by Apple. And it's just not Apple. The same goes for any self-respecting international corporation.
So. Imagine for a minute a globe where such tax optimisation schemes did not exist. Would Apple survive the actual 30% Apple tax?
Re: Um, it already does? (Score:2)
Patreon app? (Score:5, Insightful)
Why does Patreon need an app? Don't they have a web site?
Just make a good mobile website and give Apple the finger.
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App vs website - usability.
The web interface sucks compared to the app in most cases, particularly on mobile.
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And clearly that's Apple's fault for taxing Patreon's app, removing funds that could go towards paying web developers. Right?
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I'm not sure if you threw the best web developers against the problem, you'd result in a web app that was pleasant to use in comparison to a native one.
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"pleasant to use" is in the eye of the user. But one major advantage of a web based interface is I can use all the tools/add-ons on the web browser to control data mining. TOO MANY APPS come with all kinds of 'built-in shitware', often inadvertently, with the frameworks and reusable code.
Now I admit to being an old fart. But I generally DISlike Apps, and much prefer to do stuff from my computer, with its full-size keyboard, large monitor, and much greater visibility over what's going on. The proliferati
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Web browsers on your phone aren't equivalent to web browsers on your PC. Phone browsers can't make use of all the hardware, whether Patreon needs access or not is irrelevant.
Apps that were literally just the website wrapped in an app-like package were very popular for a time. They were also the shittiest things in the world. They looked bad. They performed bad. Most desktop versions of sites don't like to work on phones in one way or another. And most mobile versions of a website, look even worse. Hence nat
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Uh... I bought my first computer in October 1978, and have owned one continuously since. How old are you? How old are your parents?
So fine, use apps if you want. Don't complain when those apps steal information. Don't complain about Apple or Google extracting fees to support their infrastructure used to run those apps, both the operating system and the operations of the store. TNSTAAFL
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They are required to use the latest and greatest software to create the most wicked looking web site possible. Usability has no place in that regard.
Re: Patreon app? (Score:3)
It feels like 90% of apps are just a website anyways.
Re: Patreon app? (Score:2)
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They need an app so they can get paid through Apple.
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So don't get paid through Apple. The only way things will get better is if everyone takes a stand against Apple. But sadly, I don't see that happening because Apple knows how to divide the development community. Same applies to Google; the promise of their vast number of customers is too alluring.
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They're probably going to do what most subscription services do, and force people to subscribe or renew their subscriptions outside of the iOS app to avoid the 30% Apple Tax.
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Why does Patreon need an app? Don't they have a web site?
as a dev I can hardly complain if someone wants to pay to embed their website into an "app".
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Why does Patreon need an app? Don't they have a web site?
Because stupid morons in its management saw the success of TikTok and gimped the website. They also added "free tier" and renamed "patrons" to "subscribers". So now the management can't walk back that decision without looking like morons.
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Because stupid morons in its management saw the success of TikTok and gimped the website. They also added "free tier" and renamed "patrons" to "subscribers". So now the management can't walk back that decision without looking like morons.
This... sadly sums up their state of affairs... :(
What's in it for Apple? (Score:2)
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> People put apps in the app store because they get a lot of infrastructure and other stuff for the money
That's a good argument absent a monopoly on software distribution.
Patreon could absolutely handle its own package distribution but they're not allowed to.
And in this case I very much doubt there was ever a single user who searched the app store for "crowdfunding platforms" and then found Patreon and then looked for creators to support. It's exactly the opposite.
Competition vs. Iron Fist is the issue.
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There is an infrastructure angle, but it's a small part of it; what publishers get when they join an appstore is:
1) Purchase visibility - people find stuff they haven't bought yet in one place, showing up in search
2) Managability - people who have bought something manage stuff they've installed in one place
3) Permissions - Some awful vendors make it hard to install stuff on devices they sell outside of the app store
4) Sometimes some software services - Backup and migration of save data, user chat, achieveme
Apple already pays a tax (Score:3)
Why does everyone feel entitled to an app that freeloads on their system? Fire up a website ffs. I can't buy Kindle books in the Kindle app, and yet I still buy Kindle books. Wowsers.
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My god, I was racking up and managing servers at Global Crossing's data center in Sunnyvale in 1999/2000 and I recall our astronomical hosting costs with zero nostalgia because the future is so much better.
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$8.25/month is a screaming deal. What's more, it's $0/month for Xcode and simulators etc. so you can build your world-changing app for free.
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Apple's tax is the R&D and operating costs for the whole ecosystem.
So then why aren't they charging 65% or 2% rather than 30%?
Because they set that rate at what they thought the market could bear.
The market is saying that this price point is more than the market can bear, and all you are saying is, "R&D and operating costs" as a justification. Do you know how silly you sound?
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Considering how many apps are on Apple's store, and how many more are being published all the time, I'd say you are wrong about the economics.
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"ThE mArKeT" wants to pay less, shocking.
LOL, mock my statement all you want. It is the entire point of the article that we are discussing. You are too stupid to speak intelligently with.
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Real Mensa material right there, yeah?
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while running away from the substance of the argument.
Your argument that the 30% 'tax' is fine and that there are no issues. That is not a valid argument in the face of the article that spawned this discussion. Do better than merely criticizing me.
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Advice: don't walk in with personal insults and then cry when people respond in kind. Again, refer to the written record.
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People also seem to forget that something called the "World Wide Web" exists and that Apple has nothing to do with what happens on it.
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Slanted headline, hello (Score:5, Insightful)
Not a fan boi but disclaimer, I have always used Macs (Windows and, I have a couple of linux servers) and I like them for a reason. Not blind, not liking everything. I did switch from Galaxy to iPhone and I love the lack of malware so far that I can detect. Look, while the headline sounds interesting let's face it. Yes they would survive, they would just change the business model so that users pay for it. Maybe it would be less profitable. I agree not being able to buy books from Kindle on the iPhone is a pain (which also uses 1 mm tall letters, another anti-user thing) and 30% is much for a book. Though if Amazon charged 30% maybe bookstores would still be a thing. Especially if I am paying Amazon like $10 a month for Kindle Unlimited, if Apple asked for 30% of the price of those rented books too. And I hate the way iTunes makes it so hard (impossible?) to easily keep your own music on your phone, at least for a casual infrequent user. The answer is this model arose when other companies were doing the same thing.
I remember when Japan's NTT created "I-Mode" which was like a Yahoo for your feature phone with menus navigated by numbers. Around the mid 90s I think. It was fabulously successful and everyone paid through the nose for the platform. It was the cyber-real estate dream. One company (many more but I remember Toppan the printing company) made a mall homepage and companies could by "buildings" on it. Flash forward some decades. Is 30% and utter lock-in reasonable? Are we actually perpetuating the (stupid in a decentralized era) cyber real estate concept? I don't know, at least maybe 30% is too high for media. Being into libre software I would say locked-in DRM formats should be outlawed and APIs should be provide to allow interoperability for personal libraries/converters like with Calibre.
Are the people saying no actually the one's who want to compete with them? Yes. Hello Epic and EU. Is the EU right? Mostly yeah, especially on privacy and consent, I love it, but they also have a clearly stated goal of taking down big tech (Microsoft, Google, Apple) ascendancy in the EU to create opportunities for competition by EU companies. I don't know how nice a MacBook Pro I could get (shopping for my next one) if Apple hadn't made its billions on music, but whatever.
I'm exhausted by the super-hyped slanted idiotic headlines of which this is one of them. And the posts of people with agendas. Yes, flash news, super huge multibillion dollar companies make use of every tax trick they can find. Please treat slashdotters as being intelligent. At least the headline could look at "Can any company under 1M in revenue make money on the App Store?" I personally would be more interested in that.
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Could many app companies survive if they didn't have the Apple ecosystem, and many are surviving and thriving despite the 30% "Apple tax"?
It's not an "Apple Tax". Apple is a distributor of applications on the ecosystem they themselves built. Typical distributor rates range around 20-30%, with some as high 40% [massoninternational.com] in other industries. In that context, 30% is highly reasonable, as a distributor of goods and services.
I'm not a
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Sure, but those other distributors don't prevent you from switching distributors. With Apple, you have no choice over which distributor to pick.
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AND those distributers don't charge an upfront fee just to consider using their services before ever even having the product ready.
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Or is your point that you want to have multiple distributors to sell software on Apple products like the iPhone and iPad? There is literally no reason why Apple should be forced to do that, as Apple has a user base because of their design choices and quality of apps in how they curate what's on there. You don't have to publish on iOS, go self-publis
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On what basis do you say "we have no right"?
What's permitted now may not be permitted later - that's a matter for discussion and planning, and we should potentially use law and policy for useful ends.
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We don't fine-craft entire taxes usually for specific entities, but policy interests can lead to negotiations and pressure on various topics on some companies. We have a general interest in most businesses being successful, and in being generally a decent business environment, but it's nothing like a commitment to free enterprise principles nor even to be generally hands off.
There's a lot of ground between nationalising a company and either giving it backrubs or leaving it entirely alone. We've been on that
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You do realise that the reason "Apple tax" was in scare quotes was because it isn't a tax in the sense of government imposition, right?
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I'm insulted by the suggestion that I might have read TFA. This is /.
Silly Question (Score:2, Insightful)
If the price of the "Apple Tax" vanishes tomorrow or goes down to let's say 5%, then there may be downward pressure for pricing on apps...especially those competing with each other, trying to grab each oth
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The thing being of course, that if an app is popular enough, and is pricing appropriately to even manage to be profitable on the App Store, Apple has a tendency to then take whatever is provided by those apps and integrate them into the OS for "free" to the user. Which of course the original popular app cannot compete with because they're already having to price an additional 30% higher to cover the fee that Apple takes. A fee which gives Apple funding to develop competitors to those same apps they're cha
Re: Silly Question (Score:2)
Re: Silly Question (Score:2)
Funny that, I don't see a 30% difference
Of course it could (Score:2)
During the Eisenhower administration, corporate tax rates were 30% to 52%. Companies thrived, people could afford a family home on one salary, and college education was in reach of just about everyone without going into decades-long debt.
When people say they long for the "good 'ol days", remind them of this tax rate.
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When the US exhausts the world’s willingness to lend it money, we will have to raise taxes, inflate the debt away, or both. But it wont happen until the bo
Re: Of course it could (Score:2)
That was coupled with massive infrastructure and consumer spending. The spending was the reason for the hot economy.
Taxes only affect the rich, so cutting taxes can't stimulate the economy. But spending on infrastructure stimulates the middle class to spend.
Too big (Score:2)
"Too big to < X >" means Too big has failed (Score:2)
"Too big to fail" (or whatever "...to (ignore/fight back/etc.)" might be) means that "too big" has failed, and yes, it needs regulating.
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So any company that is successful should be broken up.
Yes, when they abuse their success, as Apple & Google & Microsoft & Facebook &........ have.
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Whoooosh! (Score:2)
How can Apple "abuse" their success, when that "abuse" already happened before the success - if it didn't cause it in the first place?
Whoooosh!
What a stupid question (Score:2)
Go back twenty years when it was impossible to sell any software without paying at least half to the store.
Re: What a stupid comment (Score:2)
The ones complaining are the middlemen who want to make money from the work of artists, musicians, authors etc. who would be better off selling through Apple directly.
Software is not hardware. (Score:2)
Software is "code once, sell many"
Hardware requires much, much more.
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Software is not hardware.
Yeah, that's why it's porous and full of security holes, as well as bugs (particularly in all of Apple's software!)
Pointless Article (Score:2)
How did this one get past the Editors ? An absolutely pointless article. You might as well post one about using cheese as jet engine fuel.
Deep as a puddle (Score:2)
Someone builds the store, and others make the stuff to sell in it. The people who own the store get a cut of the sales. The people who sell the stuff have to be able to make a profit without that cut. This concept is as old as stores.
No one actually wants the digital equivalent of a million local farmers markets.
What do they get in return (Score:2)
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