Apple Dodged Paying Billions In Taxes, Subcommittee Says

Lith1um

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Edit: IF you watch that video, have a slip of paper at hand and keep a tabulation.
 

mope54

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The issue with Apple, who we are criticizing because it put themself on show for critique by its newsworthy actions (every other similar corporation is just as worthy of critique) , is that while its tax code adherence is 'legal', it is not necessarily ethical nor appropriate by intent of the tax laws. By intent of the laws, which were not manipulated by Congress and corporate lobbyists specifically to allow this situation and legal/ethical gray-areas, the amount of taxes paid is less than what it should be. Were it not for the manipulated laws and regulations, looking at it externally from a 10,000 foot view, you could easily assume some type of fraud or cheating is going on.

I'm not suggesting that Apple's earnings do not belong to it, nor that it should pay more to the government because the government *needs* it. But it should pay the share of its earnings to the government which the law intends for an established & managed corporation to function in this country. I'll spin your question another way: Apple made the money, why does it need to keep more of the share that it owes to the government?

Again, you *could* replace Apple with any number of large, successful corporations.
The problem with people's opinions on this subject, like most things related to Apple, are that they're mostly misinformed. This isn't like the antics of corporations like GE where they invest billions elsewhere and write it off. The money at issue is money that has been made elsewhere in the world.

How does it make sense that profits from macbooks manufactured in China and sold in Italy should be taxed in the US? Simply because Apple's HQ is in California does not mean the US and California are entitled to tax every single dollar that they make anywhere in the world.

California sure loves to tax my paycheck even when I'm working in Oregon (and Oregon taxes it, as well). You can imagine how annoying that is and I'm not sure how anyone thinks that's "fair".
 

Shalafi

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Speaking of California taxes where Apple is headquartered, I heard that 60 cents out of every dollar a person earns in that state goes to the government. That's a ridiculous amount of money. A person works from January to September just to pay off the California government to squander their money and the state government is broke.

That's why I think Apple should hold onto every last penny. The State of California's government is the opposite of Apple. Apple is simple; efficient, and orderly, meanwhile the state and our government have none of those qualities.

So Apple and companies like them don't owe us anything.
 

[Tripod]MajorPayne

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Speaking of California taxes where Apple is headquartered, I heard that 60 cents out of every dollar a person earns in that state goes to the government. That's a ridiculous amount of money. A person works from January to September just to pay off the California government to squander their money and the state government is broke.

That's why I think Apple should hold onto every last penny. The State of California's government is the opposite of Apple. Apple is simple; efficient, and orderly, meanwhile the state and our government have none of those qualities.

So Apple and companies like them don't owe us anything.

This is false. Their state income tax rate maxes out at about 10% marginal. I'm sure there are some relatively high earners with really bad accountants (or none at all) who MIGHT come CLOSE to paying a 60% TOTAL tax rate when Federal, State, FICA, sales, etc. are all taken out of gross pay.

No one is paying California a 60% effective tax rate on anything.
 
D

Deleted member 222586

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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!

I still don't understand how the heck your tax code is that god damn complicated. Heck, I don't think all our laws combined are that large.
 

XamediX

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The problem with people's opinions on this subject, like most things related to Apple, are that they're mostly misinformed. This isn't like the antics of corporations like GE where they invest billions elsewhere and write it off. The money at issue is money that has been made elsewhere in the world.

How does it make sense that profits from macbooks manufactured in China and sold in Italy should be taxed in the US? Simply because Apple's HQ is in California does not mean the US and California are entitled to tax every single dollar that they make anywhere in the world.

California sure loves to tax my paycheck even when I'm working in Oregon (and Oregon taxes it, as well). You can imagine how annoying that is and I'm not sure how anyone thinks that's "fair".

+1 & /thread & the end of these armchair tax accountants talking nonsense.
 

aaronspink

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The problem with people's opinions on this subject, like most things related to Apple, are that they're mostly misinformed. This isn't like the antics of corporations like GE where they invest billions elsewhere and write it off. The money at issue is money that has been made elsewhere in the world.

How does it make sense that profits from macbooks manufactured in China and sold in Italy should be taxed in the US? Simply because Apple's HQ is in California does not mean the US and California are entitled to tax every single dollar that they make anywhere in the world.

The issue quite simply is how much of that macbook's profit is because of the R&D and development done in California? AKA, the manufacturing is the lowest contributor to the profit of the sale. That is bid out essentially to the lowest bidder. The profit is driven from the work in California.

Here's how it works. Apple develops technologies and designs the macbook to be a high value item. They license this design to a foreign subsidiary at well below the market value of that finished design. Apple.Foreign then has it manufactured a cheaply as possible and sells it and pockets almost all the profit.

Now if Apple.domestic and apple.foreign were in fact separate companies, Apple.domestic would charge apple.foreign a Fair Market Value for the design. But because they are the same entity, the value charged is a fraction of the FMV. And they do this to shift their tax liability.

The US and California should be taxing Apple.domestic based on the FMV of the design they they are licensing to apple.foreign and not the fractional value they are actually licensing it for. And that is why it is California's and the US's business how much profit Apple.Foreign is making.

Another way of thinking about it is that the investment/risk vs profit levels do not match between Apple.Domestic and Apple.Foreign. Apple.Domestic is doing all the investment and risk taking (things that can be written off), while Apple.foreign is do almost no investment or risk taking and receiving all the profits.
 

mope54

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what is this bullshit?

we don't tax corporations for their research and development! we tax them on the profits they derive from selling their merchandise. apple pays taxes on the things they sell in the US they pay taxes to Italy for the things they sell in Italy, they pay taxes to UK for the items they sell in the UK. the US doesn't have any claim to tax the money for the goods apple sells in other countries no matter how you try and twist it.
 

dr.kevin

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Apple probably does route their money to avoid taxes. But who gives a shit really?

Would you rather have the US government handle more tax money? It's like enabling an addict's drug habit. The gov't spends it on lots of bullshit.
 

Uvaman

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I agree that if its legal, then so what?
Its not like the laws can't be changed.
I don't agree so much, is the thought of:
'why have companies pay taxes?'
or, 'they pay too much taxes'
or the golden one 'they only going to pass it to the customers?'
(psst, listen, no, they are not... they don't always can.. you know markets and all that, sometimes those set the price of products too, so the taxes only cut the profit, yes, yes I know.. imagine that, less profit! OMG)
Low taxes actually hinder investment... why invest, if you can just keep it.. on the other hand, wouldn't it be wiser to shove the money back in your company before it just evaporates in the govt. cofers...
Apple's low tax exposure might actually be why they haven't innovated AT ALL even when they are DROWNING in money, they probably go meh, whats the point? xx billions in profit and we keep it most... might be different if they had a real 35% tax- sword hanging over their heads you know.

also

The lengths the US government goes to to expand and protect corporations is enormous, specially large ones.
It means killing people in other countries, it means changing governments in other countries, it is billions upon billions of our money, including our social security money (as a form of Treasury bonds, which then they don't want to pay back back taxing the rich as they should, but again screw the people over)

The constant transfer of wealth by US govt. contracts is enormous too.
Always, always 'cost' overruns.. but hey private sector!! efficient~!! eheh what a freaking joke.

It is fun to read the infant's version of reality of some people here though.
I wish I lived in your world again (yes I use to share that children's world-view).. ahh it was comfortable, when things where simpler for me 14 years ago... then I opened my eyes.
No, no don't give up on it.. keep it please.. all you adult life if possible.
 
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