So, is Apple a tax scofflaw or normal or what ?

So, is Apple a tax scofflaw or normal or what ? (Full Version)

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MrRodgers -> So, is Apple a tax scofflaw or normal or what ? (5/21/2013 9:55:55 AM)
Hearings progress and are enlightening, or...they should be. What they avoid and scrupulously so is why the debate. The whole debate takes place because of ignorance about the corporate regime. The corporate regime goes as follows: [It] doesn't care in what country to set up, or what country to do business. It doesn't care about any country, doesn't care about its society or the people as long as it can do business and make a profit and have the enforcement of basic property and business law. What people don't realize or don't say so, is that 'the corporation' lives on only in the abstract. [It] exists only on paper and becomes merely a clever paper device allowing one to privately profit without private liability beyond what one invests in the corporation. As a result, the corporation has NO social responsibility at all and doesn't care about society and does not exist to serve society. In fact, the corporation has only what is described as a fiduciary responsibility and that is ONLY to its investors. That responsibility extends to maximizing profits which means minimizing ALL taxes it pays whenever and wherever it can. So while we need a tax code overhaul, these hearings are superfluous and could be educational if it stressed the above...not where and how much tax Apple makes or pays. We already know it will do everything, EVERYTHING [it] can do maximize the former and minimize the latter. BTW, Apple has $145 billion in cash in Europe and will not bring that cash into the US because of US federal income taxes. But that crimps on rewarding investors. See above. So what does Apple do ? It borrows billions to distribute as dividends. Aren't they clever. They are not alone.

ThatDaveGuy69 -> RE: So, is Apple a tax scofflaw or normal or what ? (5/21/2013 10:11:31 AM)
I learned everything I need to to know about Assle when the CEO was interviewed on CBS last fall. When asked by the reporter why they couldn't open a factory in the US to produce the next round of iCrap, he stated (with a straight face) that Americans lack the skills to assemble such products. We build Corvettes, Vipers, Harleys, Camrys and a million other products that complete in the global market. But we lack the skills needed for an iPhone? Corporations are NOT people. If they were, BP would be rotting in jail instead of pumping gas on every-other corner of the country.

Yachtie -> RE: So, is Apple a tax scofflaw or normal or what ? (5/21/2013 11:00:39 AM)
quote: ORIGINAL: ThatDaveGuy69 Corporations are NOT people. If they were, BP would be rotting in jail instead of pumping gas on every-other corner of the country. I guess bankers and politicians aren't people either.

YN -> RE: So, is Apple a tax scofflaw or normal or what ? (5/21/2013 11:06:12 AM)
Multinational corporations are psychopathic in nature. Anything you might expect out of international organizations of professional criminals, you can expect out of these organizations.

blacksword404 -> RE: So, is Apple a tax scofflaw or normal or what ? (5/21/2013 12:54:07 PM)
FR The tax laws change every year. Apple doesn't write any of the laws. Why ask fun questions like "why do you pay so little in taxes"? They do because the laws allows it. They retain all kind of lawyers and accountants to make sure they pay what the law says they have to. And not one penny more. Same as us all. If there is a problem with what they are paying then its either they are illegally ducking taxes or your issue is with the tax code. Don't like loop holes? Get rid of them.

fucktoyprincess -> RE: So, is Apple a tax scofflaw or normal or what ? (5/21/2013 12:56:11 PM)
It is not yet clear to me (I haven't fully read what's in the press) whether they avoided paying taxes through perfectly legal tax and accounting methods, or if they are being accused of something more nefarious than that. If they avoided paying taxes and still played within the rules, there's not much complaining that can be done (other than press for tax reform). But it does make me wonder about the mantra that most Republicans give about how the country doesn't support business and makes companies pay too much in U.S. taxes. [&:]

muhly22222 -> RE: So, is Apple a tax scofflaw or normal or what ? (5/21/2013 8:58:30 PM)
quote: But it does make me wonder about the mantra that most Republicans give about how the country doesn't support business and makes companies pay too much in U.S. taxes. Keep in mind that Apple is not your garden-variety business. Apple is a huge company, with billions upon billions of dollars (maybe even trillions...I'm not looking it up, because it's not really relevant...the point is, A LOT) in sales every year, a portion of which is profit, and can be distributed as dividends or reinvested in the company. That means that Apple can afford to pay all of the lawyers and accountants it takes to legally set up various overseas subsidiaries to avoid paying taxes on that money. And it's actually economical for them to do that. (This is assuming everything was being done legally, of course). Most businesses can't afford those lawyers and accountants in the first place, and for a number of businesses, even if they could, they don't have enough profits to make it economically beneficial. Not to mention that there are a significant amount of businesses that don't do any business overseas, which makes it a lot harder for them to shelter their money, even if they wanted to.

DesideriScuri -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 3:24:40 AM)
quote: ORIGINAL: muhly22222 quote: But it does make me wonder about the mantra that most Republicans give about how the country doesn't support business and makes companies pay too much in U.S. taxes. Keep in mind that Apple is not your garden-variety business. Apple is a huge company, with billions upon billions of dollars (maybe even trillions...I'm not looking it up, because it's not really relevant...the point is, A LOT) in sales every year, a portion of which is profit, and can be distributed as dividends or reinvested in the company. That means that Apple can afford to pay all of the lawyers and accountants it takes to legally set up various overseas subsidiaries to avoid paying taxes on that money. And it's actually economical for them to do that. (This is assuming everything was being done legally, of course). Most businesses can't afford those lawyers and accountants in the first place, and for a number of businesses, even if they could, they don't have enough profits to make it economically beneficial. Not to mention that there are a significant amount of businesses that don't do any business overseas, which makes it a lot harder for them to shelter their money, even if they wanted to. Anecdotal Alert: Everything I've heard seems to take on Apple being "good citizens" rather than actually breaking any laws. It's almost as if Apple is being taken to task for not bringing the money back into the US so it can be taxed. That is, they are choosing to follow the laws to reduce their costs. Rand Paul at the Apple hearing.

mnottertail -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 7:32:27 AM)
Right, and now more and more folks are thinking that sort of corporate welfare needs to be changed in the law.

DesideriScuri -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 8:10:46 AM)
quote: ORIGINAL: mnottertail Right, and now more and more folks are thinking that sort of corporate welfare needs to be changed in the law. What happens when it's more financially sound for a company to relocate outside the US than to pay repatriation fees on current off-shore monies and future non-domestic profits?

mnottertail -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 8:52:13 AM)
Works for me. We should boot them companies out now. They are a fucking drag on the economy. Big business is not needed here.

fucktoyprincess -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 10:19:43 AM)
quote: ORIGINAL: muhly22222 quote: But it does make me wonder about the mantra that most Republicans give about how the country doesn't support business and makes companies pay too much in U.S. taxes. Keep in mind that Apple is not your garden-variety business. Apple is a huge company, with billions upon billions of dollars (maybe even trillions...I'm not looking it up, because it's not really relevant...the point is, A LOT) in sales every year, a portion of which is profit, and can be distributed as dividends or reinvested in the company. That means that Apple can afford to pay all of the lawyers and accountants it takes to legally set up various overseas subsidiaries to avoid paying taxes on that money. And it's actually economical for them to do that. (This is assuming everything was being done legally, of course). Most businesses can't afford those lawyers and accountants in the first place, and for a number of businesses, even if they could, they don't have enough profits to make it economically beneficial. Not to mention that there are a significant amount of businesses that don't do any business overseas, which makes it a lot harder for them to shelter their money, even if they wanted to. There are ways to reform the tax laws to take into account the size of a business. That is not difficult to do. But Republicans must own up to the fact that their pro-business, anti-tax stance results in things like this.

MrRodgers -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 10:30:48 AM)
quote: ORIGINAL: DesideriScuri quote: ORIGINAL: muhly22222 quote: But it does make me wonder about the mantra that most Republicans give about how the country doesn't support business and makes companies pay too much in U.S. taxes. Keep in mind that Apple is not your garden-variety business. Apple is a huge company, with billions upon billions of dollars (maybe even trillions...I'm not looking it up, because it's not really relevant...the point is, A LOT) in sales every year, a portion of which is profit, and can be distributed as dividends or reinvested in the company. That means that Apple can afford to pay all of the lawyers and accountants it takes to legally set up various overseas subsidiaries to avoid paying taxes on that money. And it's actually economical for them to do that. (This is assuming everything was being done legally, of course). Most businesses can't afford those lawyers and accountants in the first place, and for a number of businesses, even if they could, they don't have enough profits to make it economically beneficial. Not to mention that there are a significant amount of businesses that don't do any business overseas, which makes it a lot harder for them to shelter their money, even if they wanted to. Anecdotal Alert: Everything I've heard seems to take on Apple being "good citizens" rather than actually breaking any laws. It's almost as if Apple is being taken to task for not bringing the money back into the US so it can be taxed. That is, they are choosing to follow the laws to reduce their costs. Rand Paul at the Apple hearing. Well the only real question for the committee and their staff and for the IRS for that matter is just how much Apple made in say Ireland where they pay 2%, the rest of Europe and of course the US. According to Bloomberg, Ireland has an effective tax rate actually paid of 6%, France 27%, UK 22% and the US 29%. Ireland's published corp. tax rate is 15% and yes, with that causing deficits, they recently had their own public problems with tightening and cuts, getting labor to make up the shortfall. I've heard that out of $100 billion in profit, Apple would have us believe they made $70 billion in Ireland and $30 billion in the US. Wall street will tell you that they admit...profit shifting is nothing new and it will take tax reform to address the problem.

MrRodgers -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 10:37:59 AM)
quote: ORIGINAL: DesideriScuri quote: ORIGINAL: mnottertail Right, and now more and more folks are thinking that sort of corporate welfare needs to be changed in the law. What happens when it's more financially sound for a company to relocate outside the US than to pay repatriation fees on current off-shore monies and future non-domestic profits? Good question especially when many corporations list no 'official' or 'taxable' address. I didn't believe it either but that is possible. I am beginning to think...it doesn't matter. Apple for example says they have 4000 employees in Ireland alone. All that matters is how much profit and where they actually made it...not there actual country of residence.

DesideriScuri -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 11:21:07 AM)
quote: ORIGINAL: MrRodgers quote: ORIGINAL: DesideriScuri quote: ORIGINAL: mnottertail Right, and now more and more folks are thinking that sort of corporate welfare needs to be changed in the law. What happens when it's more financially sound for a company to relocate outside the US than to pay repatriation fees on current off-shore monies and future non-domestic profits? Good question especially when many corporations list no 'official' or 'taxable' address. I didn't believe it either but that is possible. I am beginning to think...it doesn't matter. Apple for example says they have 4000 employees in Ireland alone. All that matters is how much profit and where they actually made it...not there actual country of residence. That's not entirely true. Consider GE who made very nice profits outside the US but not in the US. They garnered a tax refund in the US because of the poor sales. Yet, those in Congress used it as an example of how companies "hide" profits. People were up in arms that GE made tidy profits - as a whole - but got a tax refund in the US. But, that's not really what Apple is being grilled over anyway. A purely hypothetical example would demonstrate how to really get away with all sorts of taxes... 1. Set up a global "warehouse" in Ireland. The warehouse "purchases" the iProducts from the manufacturing plants (outside the US) at cost (leading to near zero profits and keeping taxes down). Then, the "warehouse" sells products to all other countries at MSRP. A million phones the the US at $600 ea. (remember, purely hypothetical numbers) is $600M charged to domestic sales forces. If the average sales price, with promotional pricing ends up being $500 ea. there is a net loss of $100M. Nice low taxes on that loss. But, the warehouse, based in Ireland's 2% zone, has made bank, milking the system to move 100M units worldwide at $600 ea. while each unit's cost of goods (as paid to the manufacturing plants) is $250 ea. 50M @ $350 profit = $17.5B in profits, all in Ireland. It can be done that way, couldn't it? US tax burden is low because a net domestic loss, and profits are damn high in the very, very low tax rate area.

GotSteel -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 4:09:59 PM)
quote: ORIGINAL: ThatDaveGuy69 When asked by the reporter why they couldn't open a factory in the US to produce the next round of iCrap, he stated (with a straight face) that Americans lack the skills to assemble such products. It's true, we lack the "skills" to put up with working in sweat shops, living in work camps and earning a subsistence wage for doing so.

MrRodgers -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 4:35:43 PM)
quote: ORIGINAL: DesideriScuri quote: ORIGINAL: MrRodgers quote: ORIGINAL: DesideriScuri quote: ORIGINAL: mnottertail Right, and now more and more folks are thinking that sort of corporate welfare needs to be changed in the law. What happens when it's more financially sound for a company to relocate outside the US than to pay repatriation fees on current off-shore monies and future non-domestic profits? Good question especially when many corporations list no 'official' or 'taxable' address. I didn't believe it either but that is possible. I am beginning to think...it doesn't matter. Apple for example says they have 4000 employees in Ireland alone. All that matters is how much profit and where they actually made it...not there actual country of residence. That's not entirely true. Consider GE who made very nice profits outside the US but not in the US. They garnered a tax refund in the US because of the poor sales. Yet, those in Congress used it as an example of how companies "hide" profits. People were up in arms that GE made tidy profits - as a whole - but got a tax refund in the US. But, that's not really what Apple is being grilled over anyway. A purely hypothetical example would demonstrate how to really get away with all sorts of taxes... 1. Set up a global "warehouse" in Ireland. The warehouse "purchases" the iProducts from the manufacturing plants (outside the US) at cost (leading to near zero profits and keeping taxes down). Then, the "warehouse" sells products to all other countries at MSRP. A million phones the the US at $600 ea. (remember, purely hypothetical numbers) is $600M charged to domestic sales forces. If the average sales price, with promotional pricing ends up being $500 ea. there is a net loss of $100M. Nice low taxes on that loss. But, the warehouse, based in Ireland's 2% zone, has made bank, milking the system to move 100M units worldwide at $600 ea. while each unit's cost of goods (as paid to the manufacturing plants) is $250 ea. 50M @ $350 profit = $17.5B in profits, all in Ireland. It can be done that way, couldn't it? US tax burden is low because a net domestic loss, and profits are damn high in the very, very low tax rate area. Well I think I wrote in a previous thread that it is all called 'profit-shifting.' Many companies GE, IBM, Intel, Msoft and others have many more foreign business partners and far fewer employees than in the past which allows them to book sales as theirs in any country and as I understand it, Apple 'booked' sales from outside Ireland as being in country to exploit their favorable tax rate. Like I also wrote, wall street is very aware, govt. is very aware, everybody knows this is going on and into the hearings but it isn't against the law and will require tax reform. Even if it could so some good in collecting more in US taxes...too difficult and expensive to prove.

YN -> RE: So, is Apple a tax scofflaw or normal or what ? (5/22/2013 5:29:41 PM)
When considering how a multinational corporation also avoids taxes, consider the scheme you see many of them do as follows - If you inspect many of them even those operating in the United States, you will see they create a local corporation in their name, and market their wares through this shell. This local corporation functions as a non-profit agency in all respects. Ford or Sony will start a agency called a name as in Ford Brasil, or Sony America. These local corporations function as either non-profit sales agents, and even if they have plants the licensing fees capital repayments, royalties and salaries etc, are calculated so the local corporation breaks even, and the profits move offshore to the parent, who arranges their affairs so as to also pay little or no taxes on the income. For example, Sony will crank out tonnes of nice little electronic gadgets in China, import them to North America, where the local agent corporations sell them at cost and take enough "profit" to pay for the building and the wages, or even pretend to operate at a loss and get tax breaks for this fiction. Or major components will be imported and added to the product at great profit for those offshore by the local operation, for example a television made in Brasil might have every electronic and mechanical component in the unit made offshore, but as the assembly is local the product both receives the avoidance of import duties, and the payment of taxes on the profits, and even receives subsidies from the state for their plant. The money moves off shore where the factory in China and the headquarters in Japan use various fictional tax artifices to avoid taxes in those locations, (it is foreign income and thus nontaxable, the company must pay our financial subsidiary to exchange the currencies, large royalties, capital repayment, the list is endless and varies by what money or goods are moving from or too which nation.) If you consider the operations of most of these major corporations you will see numerous examples of how this type of scheme is working for them world wide.

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