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No! No! No! What you legally owe in taxes, in a reasonable tax structure, has NOTHING to do with your moral compass. You should be able to plug numbers into

• wavefunction 11y ago
  People pay their taxes, generally. Corporations on the other hand... Well many pay their taxes as well, if I'm being fair.
  • adventured 11y ago
    Very few corporations in the US can dance around jurisdictions to avoid high tax rates like Apple & Co can. To be fair, most American corporations pay very high tax rates compared to the rest of the world, and almost none of them as a percentage are able to avoid paying those high rates. The median corporate income tax rate, is higher than the median individual income tax rate.
    • threeseed 11y ago
      It's a bit meaningless to talk about the corporate tax rate when there are so many deductions available to businesses.
    • gozur88 11y ago
      Yes. The current situation heavily favors multinationals over wholly domestic corporations. In almost every country, but particularly in the US. That's why "inversions" are all the rage - if you aren't a subsidiary of a corporation in a low-tax country you almost have to become one.
  • madeofpalk 11y ago
    But people try and minimise their taxes as much as possible. Taxes that corporations pay are more complicated and they have more legal avenues to minimise tax payable.
    • melted 11y ago
      If you're a regular middle class wage slave, there are very few ways you can reduce your tax burden. My accountant says the only way to even begin to optimize taxes in my tax bracket is to start my own business.
• ThomPete 11y ago
  I would love for you to explain why Apples shouldn't be paying taxes in the US instead of Ireland I simply don't get it.
  • zepto 11y ago
    Because the money is not made in the US
    • npizzolato 11y ago
      Is all that money actually made outside the US? Or is it made outside of the US in the same spirit as how Hollywood movies never make a profit?[1][2] [1] https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting [2] http://www.theatlantic.com/business/archive/2011/09/how-hollywood-accounting-can-make-a-450-million-movie-unprofitable/245134/ http://www.theatlantic.com/business/archive/2011/09/how-holl...
      • nodamage 11y ago
        To my understanding, this is money that is actually made outside the US. If Apple (US) sells an iPhone to an American customer, they will pay US corporate income tax on the profits from that sale. However, if Apple (Italy) sells an iPhone to an Italian customer, the 'double Irish' arrangement lets them avoid paying corporate income taxes on those profits. There are two issues here: 1. Some might argue that because Apple is based in the US and the R&D for these products occurs in the US, that when Apple (Italy) sells an iPhone to an Italian customer, Apple (US) should pay taxes on those profits. This is somewhat questionable, I think. 2. When Apple (Italy) sells an iPhone to an Italian customer, they should pay Italian corporate income tax on those profits, instead of being able to wipe those profits out using licensing agreements with Apple (Ireland). This is more straightforward and is the loophole being addressed by this settlement.
        • gozur88 11y ago
          >If Apple (US) sells an iPhone to an American customer, they will pay US corporate income tax on the profits from that sale. Except they don't, really. They use the same "double Irish" scheme in the US. Apple has offshore holding companies that own the IP for that iPhone. When a US customer buys an iPhone, much of the actual profit gets shifted to the offshore subsidiaries as an expense. That's how they ended up with $200bn offshore and only $10bn or so in the US.
• gertef 11y ago
  Until we have a One World Order with no nations, what do you propose?
  • rubyfan 11y ago
    It wouldn't matter anyway, we'd still have states. In the US, state to state regulations vary just as much. One world government would be just as screwed up.
    • xxpor 11y ago
      Doesn't the UCC cover 99% of those regulations though?
      • rubyfan 11y ago
        Nope, the tax system is pretty screwy. The whole Irish domicile thing is basically Deleware or Nevada headquartered corporation just on a larger stage.
        • ryanwaggoner 11y ago
          I don't believe that having a Delaware or Nevada corp affects your taxes at all, actually.
          • rubyfan 11y ago
            That doesn't apply to your federal but state taxes. It's basically the same as Ireland, certain states are shelters... http://pennbpc.org/time-close-loopholes-delaware-loophole http://pennbpc.org/time-close-loopholes-delaware-loophole Here’s how it works: A large multi-state corporation creates a shell company in a tax-haven state like Delaware. The subsidiary has no employees and is often nothing more than a post office box. The corporation then uses accounting gimmicks to funnel profits through the shell company, leaving no apparent income on the books in Pennsylvania. It may be legal, but it isn’t fair.
  • 11y ago
• junto 11y ago
  OK, I'll add another 'no' to you both. If a company is operating in a certain country offering goods and services to the population of that country then that country has the right to levy taxes upon the sales of those goods, and upon the operating profits of that company operating within that country. Global corporations fiddle this by moving money around so it appears that they don't make a corporate profit in that country, hence they pay no corporation tax. For example, companies like Vodafone continuously buy other companies that are making losses deliberately to offset their profit making mobile operators. A simple way to solve the problem is to levy an internet sales tax, which is the same percentage as the corporation tax that these companies should have paid if they were operating solely in that country in the first place. This would have some added advantages to companies that have bricks and mortar stores, who currently struggle to survive and compete with online competition. They provide the customers advice and the ability to try on their goods and then the customer price compares and buys cheaper online. Whilst customers are benefiting from lower prices in the model we have today, we face the real risk that in twenty years you will only be able to buy a book from Amazon. There won't be any other book store.
  • derefr 11y ago
    > A simple way to solve the problem is to levy an internet sales tax, which is the same percentage as the corporation tax that these companies should have paid if they were operating solely in that country in the first place. Ah, but how does something like Google work, then? They don't sell a product to people all over the world (where tax can be collected); people all over the world are the product, and they sell that product to advertisers mostly from the US. Google uses the population of a country to make money without actually receiving any money from anyone in that country.
    • junto 11y ago
      Goods and services. In terms of their core business, the money they charge British companies to advertise on the Google network should be taxed and paid to the UK government. I don't understand the problem?
• hyperbovine 11y ago
  > You should be able to plug numbers into a spreadsheet and get it. But we have that. Take profits and multiply by 0.35. Done.* The fact that Apple effectively pays less than %10 corporate tax rate in the US is, I think, what the parent poster was referring to.
  • jph 11y ago
    Yes. Thanks for posting this. I've edited my original post to add your information.
  • bpodgursky 11y ago
    * except that's not really true For it to be this simple, you're declaring that every company paying less than 35% tax is in breach of the law. Which is obviously not the case in the eyes of the IRS -- there is totally legitimate foreign income, deductions, etc etc. Whether you think those things are a GOOD idea doesn't matter, there are plenty of companies paying way less than 35% which are not going to get prosecuted, and the IRS would declare in the clear.
  • nodamage 11y ago
    > The fact that Apple effectively pays less than %10 corporate tax rate in the US is, I think, what the parent poster was referring to. Can you source this claim, please? The only sources I've seen that make this claim arrive at this number by treating Apple's worldwide sales as if they were entirely US sales, which is an absurd basis for this calculation.
• marincounty 11y ago
  Yea, I'm with you, but don't expect the United States to fight/do anything for that money/employees if we have some calamity. Basically, if someone decides to take that money overseas--don't throw up you hands, and expect U.S. Soldiers to save the day. So we live in this new world economy. Fine. If things go haywire; your company is on its own. Don't use our military. Don't use our government, and courts. Don't complain. You're on your own. The problem , I see, is even if these companies didn't expect any favors from the United States in times of crisis; the United States would still try to rectify the problem. Tim Cook knows his money is safe anywhere. Why not pay close to nothing on profits? I wish we weren't the ambasitors of right/wrong, or the world's police.
• rayiner 11y ago
  Even accountants don't just plug numbers into a spreadsheet and get an answer. There are judgment calls and a range of reasonableness even within the Accounting rules.
• jph 11y ago
  I agree with you and I'm updating my post to show that your position and mine are similar. We both want a reasonable tax structure. But Apple is exploiting the unreasonableness of the tax structure, e.g. by using outdated codes, shell games, tax havens, etc. Apple leaders have the opportunity and moral responsibility to stop exploiting, and start helping.
  • sigzero 11y ago
    You keep saying "moral responsibility". They don't. Companies have already been telling the government what's wrong and the government refuses to change it. Apple is responsible to its shareholders bottom line.
    • paulddraper 11y ago
      In fact, Apple has a fiduciary obligation to act in the interests of their shareholders.
• supercanuck 11y ago
  You may not realize this, but there is a similiar argument happening in the Accounting world. You are basically arguing for Rules (Clear, Bright Lines) instead of Principles: There is already a current debate about this in the accounting world in GAAP vs IFRS and it has nothing to do with morality. One of the advantages of GAAP, as you seem to be arguing is the reduction of risk since the rules are clear, unfortunately, the downside is the ability to circumvent them. it is also funny how investors feel about accounting standards when it is THEIR money at risk and not the governments. https://ifrsusa.wordpress.com/2011/04/05/which-is-better-%E2%80%93-principles-or-rules/ https://ifrsusa.wordpress.com/2011/04/05/which-is-better-%E2...
  • jph 11y ago
    Excellent point. I strongly prefer IFRS over US GAAP, for exactly your reasons. IFRS tends to favor principles, GAAP tends to favor rules. The ideal (IMHO) is to improve the principles and rules together, and Apple is in a unique leadership position to do this.
• luckydude 11y ago
  I get the spreadsheet. I get that there should not be two answers. What I'd ask you is where is your moral compass? Where do you think the taxes should be?
  • gozur88 11y ago
    Taxes and morality have nothing to do with each other. Individuals and corporations have a legal duty to pay duly constituted taxes. Nothing more.
    • supercanuck 11y ago
      > Taxes and morality have nothing to do with each other Bullshit, the concept of fairness is a universal moral.
      • gozur88 11y ago
        The concept of fairness is so subjective it's meaningless in the context of morality. Decrying something as being "unfair" is childish.
        • supercanuck 11y ago
          Right.. nothing subjective about tax: The report found that Irish officials essentially “reverse-engineered” Apple’s tax bill by first discussing with company representatives the size of the profit they wanted from the Irish branch. Apple’s own tax adviser acknowledged there was “no scientific basis” for the figures, the report said. http://www.nytimes.com/2014/10/01/business/international/european-commission-report-warns-ireland-over-tax-treatment-of-apple.html http://www.nytimes.com/2014/10/01/business/international/eur...
          • gozur88 11y ago
            Of course there's something subjective about tax. That was my whole point. I'm going to assume you meant "objective" so your post makes sense. There's nothing objective the concept of fairness, particularly when it comes to taxes. Taxes are almost completely arbitrary, depending more on what the government in question thinks it can actually collect than anything else. It's pretty easy to make the case corporations shouldn't be taxed at all. A corporation is nothing more than a group of people that have pooled their resources to make money, after all, and they're already taxed as individuals when profits are disbursed. How is that fair?
• 1stop 11y ago
  Tax is 100% a moral issue. Just as all laws are. There can be multiple legally correct answers because there are different circumstances, that's why we have courts, and not Judge Dredd. You are preaching utopian idealism, but a high school ethics assignment of "stealing medicine to save your mum" undoes your "one set of rules to apply to everything" point.