Apple Dodged Paying Billions In Taxes, Subcommittee Says

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You know, it probably wasn't a good idea to send Tim Cook to give testimony to congress after all. Apple is the poster boy for tax dodging and the congressional subcommittee is salivating at the chance to get its hands on that cash.

Apple is an American success story," the report reads. "Today, Apple Inc. maintains more than $102 billion in offshore cash, cash equivalents and marketable securities (cash). Apple executives told the Subcommittee that the company has no intention of returning those funds to the United States unless and until there is a more favorable environment, emphasizing a lower corporate tax rate and a simplified tax code.
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Apple does already pay a few billion a year i beleive so it is not like they pay nothing..

perhaps the U.S shoudl close some of it's tax loopholes... so the %1 stop getting richer...
 
Apple just cannot catch a break. But it's not only Apple that does this (or "supposedly"), hundreds, if not thousands, of other companies use similar methods. Granted Apples does pay a lot in taxes already, but regardless, our tax code is whack, outdated, and confusing and needs some heavy cleaning.
 
No law were broken by Apple.

Now Congress, well, that's a different matter entirely.
 
Can't the government just make it illegal for US companies to store their money in foreign accounts?
 
CacaSapo said:
This. It makes it a non-story, except for the Occupy people going "BUT BUT look at all the money they have!".
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It's not a non-story. What Apple and all the other corporations are doing is horseshit. Just because it's "legal" doesn't make it right.

That said it's up to Congress to close the loopholes and make the tax code simpler. Until they do that well stories like this will keep hitting the headlines.
 
Vermillion said:
It's not a non-story. What Apple and all the other corporations are doing is horseshit. Just because it's "legal" doesn't make it right.

That said it's up to Congress to close the loopholes and make the tax code simpler. Until they do that well stories like this will keep hitting the headlines.
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Congress can't tie their own shoes without raising taxes. They are only looking for more money to spend.
 
The problem is that the money they have "offshore" is money that was made "offshore" and therefore there is no reason it has to be brought back to the US. This is such a non story that keeps getting brought up that it is getting rediculous. This is the same thing that is happening over in Europe with several other companies that shuffle resources and money around to pay the least amount in taxes.
 
no wonder we're in trouble: apparently, only criminals & those of an evil suasion strive to retain their earnings
 
bbenz33 said:
The problem is that the money they have "offshore" is money that was made "offshore" and therefore there is no reason it has to be brought back to the US. This is such a non story that keeps getting brought up that it is getting rediculous. This is the same thing that is happening over in Europe with several other companies that shuffle resources and money around to pay the least amount in taxes.
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No, that's not money that the company "made" offshore, it's money that the company "invested" offshore. That's what every company does, if it has the chance.
 
10% Flat Income Tax for all; individuals, families, businesses, and corporations that live in the US.

No exemptions, tax credits, or subsidies, therefore no loopholes.

Tax code reduced from 27,000+ pages to one.

Then onto congressional term limits!
 
Where does this attitude that doing everything that can legally be done do to keep the money one has has earned is wrong come from? These people scare me.
 
bigdogchris said:
Can't the government just make it illegal for US companies to store their money in foreign accounts?
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Then the companies would just move their "headquarters" out of the country. As an example of this kind of effect, just notice how many ships are registered in Panama.
 
ballistic90 said:
No, that's not money that the company "made" offshore, it's money that the company "invested" offshore. That's what every company does, if it has the chance.
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This.

While I'll agree this is a "non-issue" in the sense that they're following all the legal loopholes, and maybe congress should make the IRS close said loopholes rather than expecting multi-billion dollar company to play nice (hell even Warren Buffet for all his complaining still takes advantage of loopholes because they're there).

Personally other I think the entire corporate tax code should be rewritten such that revenue made in the United States must be declared as profit unless revenue is reinvested in the United States, and that goes from acquiring businesses to purchasing the Chinese factories that crank out your product, want to save money on manufacturing costs? No problem... you're going to be fucking taxed on that REVENUE that leaves the country then.
 
CacaSapo said:
This. It makes it a non-story, except for the Occupy people going "BUT BUT look at all the money they have!".
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Hardly a non-story, just because other people do it as well.

Stupid world we live in. But I can't blame Apple, or any other company/people. If loopholes exist, people that can, will sue them. Hell, I probably would at this point, if I knew how.

The document also contains a brief outline at how Apple believes the U.S. can simplify its corporate tax system, including the elimination of all corporate tax rates and expenditures, along with the creation of a "reasonable tax on foreign earnings" when companies want to bring that money back to the U.S.
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Just more stuff to boost their earnings, and lower their taxes. I call bull on "companies want to bring that money back," they don't want to bring it back, they just want to more easily keep it, and if it somehow gets some of it back to the US, well, that's just an icing they can say "Look at what we did."
 
The working class are struggling to pay their taxes or even worse, staying employed!

I will not buy an Apply product like EVER!
 
Just some tidbits from another article I read about this:

http://www.startribune.com/lifestyle/208282111.html?page=1&c=y

"Apple uses five companies located in Ireland to carry out its tax strategy, according to the report. The companies are located at the same address in Cork, Ireland, and they share members of their boards of directors. While all five companies were incorporated in Ireland, only two of them also have tax residency in that country. That means the other three aren't legally required to pay taxes in Ireland because they aren't managed or controlled in that country, in Apple's view.

The report says Apple capitalizes on a difference between U.S. and Irish rules regarding tax residency. In Ireland, a company must be managed and controlled in the country to be a tax resident. Under U.S. law, a company is a tax resident of the country in which it was established. Therefore, the Apple companies aren't tax residents of Ireland nor of the U.S., since they weren't incorporated in the U.S., in Apple's view."

"Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere."
 
Nobified[H];1039896452 said:
The working class are struggling to pay their taxes or even worse, staying employed!

I will not buy an Apply product like EVER!
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Unless you are claiming zero dependents or deductions on your personal taxes I'd suggest you put down that pitchfork and take a look in the mirror. They are doing nothing wrong but using the federal tax code as written.

Hate the game, not the player.
 
Vermillion said:
It's not a non-story. What Apple and all the other corporations are doing is horseshit. Just because it's "legal" doesn't make it right.

That said it's up to Congress to close the loopholes and make the tax code simpler. Until they do that well stories like this will keep hitting the headlines.
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Right and wrong are arbitrary, just because you think it is doesn't make it so.


That said yes the tax code needs to be redone and simplified to eliminate a lot of the loop holes. However as a country we need to offer competitive tax rates, to encourage businesses to come and stay here. It's shocking to me that people and politicians are always dumb enough to be shocked that businesses take their business to other country's because it saves and makes them more money. Last I checked company's go into business to make money not to provide a steady income for the government.
 
mavrocket said:
10% Flat Income Tax for all; individuals, families, businesses, and corporations that live in the US.

No exemptions, tax credits, or subsidies, therefore no loopholes.
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Personally, I love it. What qualifies as income?

I put $1,000 in a savings account. I make 1% interest. Am I taxed on that 1% now, or when I pull the money out?

I put $5,000 in a retirement account. I have a kid who requires severe medical treatment. I pull the money back out of the account to pay for it. Do I pay an early-withdrawal tax?

I make $11,343 ($1 under the poverty threshold). That 10% is the difference between eating this month or not. Do I still owe it?

I own a highly successful business. I pay myself $1/year in salary. I own 51% of the stock in my company, valued at $123 million dollars. Thanks to the hard work and tireless efforts of myself and my company employees, next year, the stock is valued at $234 million dollars. Through financial voodoo, our profit for that year was only $100,000. How much do I owe personally on my taxes, and what does my business owe?

I bought 36 gold bars. The price of gold tripled. Do I have to send the IRS a couple of my gold bars?
 
The Gonz said:
No law were broken by Apple.

Now Congress, well, that's a different matter entirely.
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ScottSwing said:
This.
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CacaSapo said:
This. It makes it a non-story, except for the Occupy people going "BUT BUT look at all the money they have!".
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bbenz33 said:
The problem is that the money they have "offshore" is money that was made "offshore" and therefore there is no reason it has to be brought back to the US. This is such a non story that keeps getting brought up that it is getting rediculous. This is the same thing that is happening over in Europe with several other companies that shuffle resources and money around to pay the least amount in taxes.
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This x4

mavrocket said:
10% Flat Income Tax for all; individuals, families, businesses, and corporations that live in the US. No exemptions, tax credits, or subsidies, therefore no loopholes. Tax code reduced from 27,000+ pages to one. Then onto congressional term limits!
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LMAO...

Nicklebon said:
Where does this attitude that doing everything that can legally be done do to keep the money one has has earned is wrong come from? These people scare me.
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bigddybn said:
Unless you are claiming zero dependents or deductions on your personal taxes I'd suggest you put down that pitchfork and take a look in the mirror. They are doing nothing wrong but using the federal tax code as written.

Hate the game, not the player.
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You guys said just what I was feeling. Giving the government more money is like giving the dude who owes you money more money to get back the original amount he owes you. I rather they look into their defense budget than Apple. And like 80% of [H], I don't like Apple as a company either but this is nonsense.
 
Apple is getting the bad publicity on this but every (and I mean EVERY) multinational corporation does a little financial Zumba to minimize (or eliminate) their tax burden in high tax countries ... their manipulations are perfectly legal and would pass any audit imposed on them by the government ... there is no easy way to get around this without substantially overhauling the tax code

The mechanics work something like this:

- The corporation creates a legal entity in a low tax jurisdiction (Camens, Barbados, Maldives, Mauritius, etc)

- This entity purchases all products from a manufacturing location offshore (China, Vietnam, Malaysia, Thailand, etc) at a small mark-up to minimize profit in that jurisdiction.

- The low tax entity then sells the product to the destination country (US, GB, Germany, etc) at maximum profit (so that most of the profits are occurring in the low tax rate location)

- The destination country location can then sell at a low markup to minimize profit again.

This process is 100% legal and 100% ethical since a company's first fiduciary responsibility is to their shareholders ... NOT the government of the countries they manufacture or sell in.

The US could get around this need by lowering their corporate tax rate to 1-2% (equivalent to what they have in those low tax countries) and make their money through payroll taxes, property taxes, and the like. They won't do this, but this is what they should do ;)
 
StrayShot said:
Then the companies would just move their "headquarters" out of the country. As an example of this kind of effect, just notice how many ships are registered in Panama.
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So then refuse them any right to do business in your country. No selling anything; services or products. Cut off their income completely.
 
TeeJayHoward said:
Personally, I love it. What qualifies as income?

I put $1,000 in a savings account. I make 1% interest. Am I taxed on that 1% now, or when I pull the money out?

I put $5,000 in a retirement account. I have a kid who requires severe medical treatment. I pull the money back out of the account to pay for it. Do I pay an early-withdrawal tax?

I make $11,343 ($1 under the poverty threshold). That 10% is the difference between eating this month or not. Do I still owe it?

I own a highly successful business. I pay myself $1/year in salary. I own 51% of the stock in my company, valued at $123 million dollars. Thanks to the hard work and tireless efforts of myself and my company employees, next year, the stock is valued at $234 million dollars. Through financial voodoo, our profit for that year was only $100,000. How much do I owe personally on my taxes, and what does my business owe?

I bought 36 gold bars. The price of gold tripled. Do I have to send the IRS a couple of my gold bars?
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Answers..

1) $1000 in savings, you're taxed 10% on the 1% interest every year the money is there.

2) You're charged the 10% tax to the day you pulled the money out. Daily interest is easy to calculate.

3) You will be taxed on the $11,343 dollars at 10%. No such thing as a poverty rate when everyone is paying a flat tax.

4) You will pay 10% on your $1 dollar salary and 10% on the value of your stock portfolio based on a year to year basis, say January 1st to December 31st.

5) Sure if that's how you want to pay the IRS. Probably better to cash out a few bars and pay by cash/certified cheq/bank draft/etc...

I realize what you're saying is difficult to calculate taxes on (even a flat rate) as you've made very good examples of how this would be tough to figure out. It can be done, but congress just has to have the balls to do it and we all know that's not happening anytime soon.
 
H@RD5 said:
That said yes the tax code needs to be redone and simplified to eliminate a lot of the loop holes. However as a country we need to offer competitive tax rates, to encourage businesses to come and stay here. It's shocking to me that people and politicians are always dumb enough to be shocked that businesses take their business to other country's because it saves and makes them more money. Last I checked company's go into business to make money not to provide a steady income for the government.
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I'm shocked that you think we should apply common sense to the tax code.

The politicians LIKE the current tax code mess, because they can use it to reward thier supporters and punish thier enemies.
 
freeloader1969 said:
2) You're charged the 10% tax to the day you pulled the money out. Daily interest is easy to calculate.
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Ahh so much for the flat tax with "no deductions, no loopholes, etc" There's already a situation here where you put away money tax free and decide to pay it when you feel like it. FYI retirement accounts are the same thing as "loopholes" or "deductions" or "exemptions" just because you pay it off later doesn't make it any less so.

3) You will be taxed on the $11,343 dollars at 10%. No such thing as a poverty rate when everyone is paying a flat tax.
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Poverty rate is not a metric of taxes that are paid.

4) You will pay 10% on your $1 dollar salary and 10% on the value of your stock portfolio based on a year to year basis, say January 1st to December 31st.
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So you're taxed on stocks that never get cashed out?


I realize what you're saying is difficult to calculate taxes on (even a flat rate) as you've made very good examples of how this would be tough to figure out. It can be done, but congress just has to have the balls to do it and we all know that's not happening anytime soon.
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Overall a flat tax seems nice on paper however it's simply a way for the rich to pay less taxes, and the poor to pay more. Going by actual taxes paid using 2010 data the top 5% of income earners would have their taxes lowered by 50%, the top 25% of income earners sees a lowering of 35% and the bottom 50% of income earners would see their taxes on average rise 300%

Numbers don't lie, a flat tax reduces tax on the wealth, and increases taxes on the poor. It's just too bad the poor don't have the resources to push for laws to be made, kind of like how Apple is doing.

I'm personally ok with our current graduated income tax system, just removing all deductions from it. But the flat tax people stick by their guns.. ITS MY WAY OR THE HIGHWAY! And the net result is we're stucked with our half a billion pages of tax code that we have.
 
sfsuphysics said:
Ahh so much for the flat tax with "no deductions, no loopholes, etc" There's already a situation here where you put away money tax free and decide to pay it when you feel like it. FYI retirement accounts are the same thing as "loopholes" or "deductions" or "exemptions" just because you pay it off later doesn't make it any less so.


Poverty rate is not a metric of taxes that are paid.


So you're taxed on stocks that never get cashed out?



Overall a flat tax seems nice on paper however it's simply a way for the rich to pay less taxes, and the poor to pay more. Going by actual taxes paid using 2010 data the top 5% of income earners would have their taxes lowered by 50%, the top 25% of income earners sees a lowering of 35% and the bottom 50% of income earners would see their taxes on average rise 300%

Numbers don't lie, a flat tax reduces tax on the wealth, and increases taxes on the poor. It's just too bad the poor don't have the resources to push for laws to be made, kind of like how Apple is doing.

I'm personally ok with our current graduated income tax system, just removing all deductions from it. But the flat tax people stick by their guns.. ITS MY WAY OR THE HIGHWAY! And the net result is we're stucked with our half a billion pages of tax code that we have.
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Of course you're correct about the poverty rate being more of a metric, but in a flat tax system, you pay xx% of what you make, no exceptions.

Yes, you are taxed on stocks that are "never" cashed out. Better cash them out to pay your bill.

A simplistic tax code should have simplistic answers. :)

I love your idea of no deductions and a graduated tax system. Imagine how easy it would be to file a return. :D
 
freeloader1969 said:
Of course you're correct about the poverty rate being more of a metric, but in a flat tax system, you pay xx% of what you make, no exceptions.
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Unless it's a xx% of any income over a certain number (say, $15,000 or whatever). The two are not incompatible. There are all kinds of ways to figure out a flat rate tax code. Most all of them are stupid, disadvantage the poor, and Congress will never go for any one of them as it precludes their using tax breaks/exemptions as a way to push policy.
 
OK, why can't I edit my post? There are *several* ways, not "all kinds." Ugh.
 
Unless you are claiming zero dependents or deductions on your personal taxes I'd suggest you put down that pitchfork and take a look in the mirror. They are doing nothing wrong but using the federal tax code as written.

Hate the game, not the player.
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I get your point. You are missing my point here. (my fault for not explaining well) USA is nearly 17 trillion in debt plus an easy 100 trillion in liabilities. It is time for everyone to pay up on taxes including tax haven losers. If the dollar dies, we are all broke and the business end of a rifle comes out.

These are facts, hate them or embrace reality.
 
mavrocket said:
10% Flat Income Tax for all; individuals, families, businesses, and corporations that live in the US.

No exemptions, tax credits, or subsidies, therefore no loopholes.

Tax code reduced from 27,000+ pages to one.

Then onto congressional term limits!
Click to expand...

And then you'd be bitching because of the deficits. That wouldn't even bring in enough money to pay half of the defense budget, and wouldn't address the issue of corporations and individuals hiding their money in off shore accounts and refusing to pay.
 
Nicklebon said:
Where does this attitude that doing everything that can legally be done do to keep the money one has has earned is wrong come from? These people scare me.
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Because the very people "legally" doing this are the ones that get to do what you and I don't get to do-- have the laws written so that what they do is "legal".

If the average person had access to lawmakers that corporations had, the Mafia might be a legal enterprise!
 
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