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>The well-choreographed customs routine is part of a hidden bounty of perks, tax breaks and subsidies in China that supports the world’s biggest iPhone factory,

>The well-choreographed customs routine is part of a hidden bounty of perks, tax breaks and subsidies in China that supports the world’s biggest iPhone factory, according to confidential government records reviewed by The New York Times, as well as more than 100 interviews with factory workers, logistics handlers, truck drivers, tax specialists and current and former Apple executives. The package of sweeteners and incentives, worth billions of dollars, is central to the production of the iPhone... So, Apple's high profits depend on a whole lot of government subsidies in China. And then Apple takes that cash and protects it from US tax rates by storing it in Ireland. And now, some interesting questions are raised about the legality of that tax scheme. Maybe the US doesn't need more businesses like Apple.

wklauss 10y ago
> So, Apple's high profits depend on a whole lot of government subsidies in China. And then Apple takes that cash and protects it from US tax rates by storing it in Ireland. And now, some interesting questions are raised about the legality of that tax scheme. They don't depend on them. Apple would still profit nicely (albeit less) without these subsidies. But then again the same thing could be say of various players on various industries. Detroit was, too, a city built thanks to a lot of subsidies and tax breaks; oil companies extract tremendous profits thanks to subsidies, tax breaks and all kinds of government help... so on and so forth. Aside from that, I don't think there's a question to be raised about the legality of Apple tax scheme. There's a question to be raised about it's fairness, sure, but not the legality. Apple is using the same loopholes any other corporation can exploit (and they all do, to the extent they can or know how to). What we need is updated international and national tax codes that start taking these things into account. Most of the current legislation was designed for a time much simpler and with less access to global markets and manufacturing chains.
- HillaryBriss 10y ago
  > What we need is updated international and national tax codes that start taking these things into account. Most of the current legislation was designed for a time much simpler and with less access to global markets and manufacturing chains. it's a fair point. sometimes i think: who cares if Apple or Google or Exxon are headquartered in Cupertino or Mountain View or Dallas or New Delhi or Bahrain or Shenzhen? what difference does it make? who gives a shit? they don't want to pay taxes and neither do i.
simonh 10y ago
I have a hard time understanding why (presumably?) a US citizen would be against foreign governments subsidizing US companies. Isn't that a good thing? After all this is a US company that employs hundreds of thousands of Americans and in 2015 paid $2.7bn in tax on it's global profits at an overall rate of about 25.5%, most of it in the US. http://www.macworld.co.uk/feature/apple/does-apple-pay-tax-how-much-tax-does-apple-pay-why-doesnt-it-pay-more-3645779/ http://www.macworld.co.uk/feature/apple/does-apple-pay-tax-h...
- HillaryBriss 10y ago
  well it's an interesting point. i don't live in the USA of 1955. in today's landscape, i don't know how to tell if Apple's location actually matters to me. what if Apple were headquartered in Finland, Japan or China? they don't pay my taxes. they don't employ me. they bring a lot of people from outside the US to do their work. they also outsource a ton of work to other countries. why would I really care about Apple's location or country of incorporation? i bet people in Ireland care a lot more than i do.
  - simonh 10y ago
    Ireland gets a fraction as much tax money from Apple compared to the US, which gets the lion's share. That's kind of the point - the US thinks they should be getting even more. But I'm sure Irish taxpayers would welcome getting the $billion+ tax revenue currently going to fund the US government as well, if you really don't want it.

wklauss 10y ago

> So, Apple's high profits depend on a whole lot of government subsidies in China. And then Apple takes that cash and protects it from US tax rates by storing it in Ireland. And now, some interesting questions are raised about the legality of that tax scheme. They don't depend on them. Apple would still profit nicely (albeit less) without these subsidies. But then again the same thing could be say of various players on various industries. Detroit was, too, a city built thanks to a lot of subsidies and tax breaks; oil companies extract tremendous profits thanks to subsidies, tax breaks and all kinds of government help... so on and so forth. Aside from that, I don't think there's a question to be raised about the legality of Apple tax scheme. There's a question to be raised about it's fairness, sure, but not the legality. Apple is using the same loopholes any other corporation can exploit (and they all do, to the extent they can or know how to). What we need is updated international and national tax codes that start taking these things into account. Most of the current legislation was designed for a time much simpler and with less access to global markets and manufacturing chains.

HillaryBriss 10y ago
> What we need is updated international and national tax codes that start taking these things into account. Most of the current legislation was designed for a time much simpler and with less access to global markets and manufacturing chains. it's a fair point. sometimes i think: who cares if Apple or Google or Exxon are headquartered in Cupertino or Mountain View or Dallas or New Delhi or Bahrain or Shenzhen? what difference does it make? who gives a shit? they don't want to pay taxes and neither do i.

simonh 10y ago

I have a hard time understanding why (presumably?) a US citizen would be against foreign governments subsidizing US companies. Isn't that a good thing? After all this is a US company that employs hundreds of thousands of Americans and in 2015 paid $2.7bn in tax on it's global profits at an overall rate of about 25.5%, most of it in the US. http://www.macworld.co.uk/feature/apple/does-apple-pay-tax-how-much-tax-does-apple-pay-why-doesnt-it-pay-more-3645779/ http://www.macworld.co.uk/feature/apple/does-apple-pay-tax-h...

HillaryBriss 10y ago
well it's an interesting point. i don't live in the USA of 1955. in today's landscape, i don't know how to tell if Apple's location actually matters to me. what if Apple were headquartered in Finland, Japan or China? they don't pay my taxes. they don't employ me. they bring a lot of people from outside the US to do their work. they also outsource a ton of work to other countries. why would I really care about Apple's location or country of incorporation? i bet people in Ireland care a lot more than i do.
- simonh 10y ago
  Ireland gets a fraction as much tax money from Apple compared to the US, which gets the lion's share. That's kind of the point - the US thinks they should be getting even more. But I'm sure Irish taxpayers would welcome getting the $billion+ tax revenue currently going to fund the US government as well, if you really don't want it.