11 ms·

$269 billion in cash. Insane to think about that.

by vermontdevil 9y ago

danjoc 9y ago
$269 billion in tax avoidance.
- toasterlovin 9y ago
  This is the tiredest trope that ever traipsed. The company's management has an obligation to the company's owners to pursue all legal means to reduce their tax obligation. You better believe the IRS would have come knocking already if they were doing anything illegal by keeping that $269B outside of the U.S.
  - danjoc 9y ago
    >if they were doing anything illegal by keeping that $269B outside of the U.S. You've reversed cause and effect. They keep the money outside the U.S. to legally avoid the taxes. They can't bring it back. They'd rather horde the cash than contribute Apple's fair share to the country that made Apple's success possible. Deplorable.
    - macintux 9y ago
      I’m sure you would find Apple pays plenty in American taxes. 35% is a huge haircut to take on money earned outside the United States. The shareholders would correctly be out for blood.
      - danjoc 9y ago
        >I’m sure you would find Apple pays plenty in American taxes. I found Apple incorrectly reports to investors taxes paid. "For example, in fiscal year 2011, on its 10-K reports filed with the U.S. Securities and Exchange Commission, Apple said it paid $6.9 billion in taxes to the U.S. government, but on its tax return filed with the U.S. Internal Revenue Service, it reported taxes due of $2.5 billion, the report said." https://www.infoworld.com/article/2614464/techology-business/senate-report--apple-claims-subsidiaries-to-avoid-paying-billions-in-taxes-each-y.html https://www.infoworld.com/article/2614464/techology-business... So yeah, I'm sure you think they pay a lot of money. >35% is a huge haircut to take on money earned outside the United States. 30% is a huge haircut to take on money earned outside the app store, but Apple still demands that too. Suddenly Apple's in favor of taxes. Developer taxes.
        macintux 9y ago
        What’s more likely? That the SEC ignored Apple blatantly lying to shareholders or that the Senate subcommittee doesn’t actually understand how corporate taxes work? Given that I cannot find any follow-up to that story, I don’t know which if either is correct, but I am skeptical.
        toasterlovin 9y ago
        All I can say is thank God we live under the rule of law and not the rule of the mob.
    - clarky07 9y ago
      Alternately, how about the US not have absurd laws taxing money made in other countries? This is not a normal thing and most countries don't work this way. If we had sane tax laws, Apple (and ever other multi-national company that works exactly the same way) would bring the money back and put it to work in the US
  - ant6n 9y ago
    > You better believe the IRS would have come knocking already if they were doing anything illegal by keeping that $269B outside of the U.S. Note the difference between 'tax avoidance' and 'tax evasion'.
  - sib 9y ago
    "Tax avoidance" is precisely "using legal means to reduce ... tax obligation" Tax avoidance is not illegal. Tax evasion is illegal.
    - toasterlovin 9y ago
      I screwed the pooch on this one, thanks for setting me straight.
      - sib 9y ago
        No worries - my first startup's external CPA straightened me out on this one years ago...
  - nl 9y ago
    I think that the point being made here is that it isn't entirely clear why the obligation to the company's owners should override the obligation to the country most of its employees live in. I go back and forward on this - I find some elements of it convincing but others not. Either way, I do think that the argument should be presented fairly, and it does seem fair to point out that the legal obligation to the shareholders is defined and enforced by the laws of the country. It doesn't make sense to talk about the shareholder obligation without the acknowledgement that obligation is a construct, and perhaps there is a transitive obligation to the entity which created and enforces that obligation. It is entirely reasonable to consider if that obligation should change (the law is a construct after all) to include other obligations.
    - clarky07 9y ago
      The obligation to the country is to follow the law and pay the taxes the law requires. which they do. Do you avoid taking deductions and send the IRS more than is required each year? Why, just because Apple makes a lot of money, do we expect them to pay more than the law requires of them? That's just absurd.
      - nl 9y ago
        Self regulation is a thing which shows that industry groups often act to avoid legal changes when the legal system doesn't match society's moral view. As I said, I'm not entirely convinced, but nor is it an absurd view. Also, I hate the HN rate limit which applies when I get voted down. It makes it hard to argue the point.
        toasterlovin 9y ago
        > As I said, I'm not entirely convinced, but nor is it an absurd view. It is an absurd view to think that people and/or companies are morally obligated to pay taxes above and beyond their legal obligations. Paying taxes competes with a person's ability to provide for themselves and their family. To think that a person has an obligation to give extra money to strangers, beyond their legal obligation—which we as a society have collectively agreed upon—rather than keeping that money for themselves and their family is absurd. And, to anticipate where you may go with this: while Apple may be a hugely profitable company, those profits belong to the owners of the company, who are ultimately people who need to provide for themselves and their families.
  - deleted 9y ago
    [deleted]
  - mpweiher 9y ago
    Well, the EU commission has come knocking, and determined that schemes that Apple tried to sell as perfectly legal tax avoidance were, in fact, illegal tax evasion.
- jp555 9y ago
  How is this narrative still around? It only takes a few minutes of searching to find out that Apple pays more US tax than almost any other corporation in the country (just a couple oil companies pay more). Apple pays $16B of the total $450B the US collects from all companies. Total US tax receipts are ~2.2T.
  - danjoc 9y ago
    >Apple pays more US tax than almost any other corporation It's not about what you pay. It's about what you owe. In Apple's case, Apple owes a lot more than it pays. Tax avoidance == leeches.
    - clarky07 9y ago
      No, they pay exactly what they owe. It is in fact their job to follow the law and find ways to pay as little taxes as possible under the law, which is what they do.
      - mpweiher 9y ago
        Except that the European Commission has determined that they did not pay what they owe. Tax avoidance/evasion by multinationals in Europe was insane. Fortunately the EU is now cracking down on that.
    - nikcub 9y ago
      Only if you believe in a world where the USA has a right to tax all income everywhere
      - rusk 9y ago
        The way it works is, in the USA they tell them they earn this much, in jurisdiction B they tell them they earn that much. Jurisdiction B says "Oh well the majority, Y% of your value is created in the USA so we won't tax you on Y%". So jurisdiction B forgoes that Y% tax, and then the USA doesn't tax it either, and that then goes onto the bottom line! Now, you could say, that's Jurisdiction B's business, but it doesn't undermine the fact that they save a huge amount of tax off their profits courtesy of Jurisdiction B, and this has a highly significant effect on their earnings. What gets really interesting is if Jurisdiction B is part of a larger "Bloc E". They can effectively do business in Bloc E at a highly discounted rate relative to competitors, and even native businesses, and other members of Bloc E start to complain. Who loses out here? Everybody but the tax efficient "Company A" and a bunch of insiders in Jurisdiction B.
microtherion 9y ago
It's worth remembering, though, that Apple has about $100 billion in debt, so net cash is not quite that impressive.
- ejanus 9y ago
  That is more than Sub-Sahara sovereign debts(SA not included)

$269 billion in cash. Insane to think about that.

danjoc 9y ago

$269 billion in tax avoidance.

toasterlovin 9y ago
This is the tiredest trope that ever traipsed. The company's management has an obligation to the company's owners to pursue all legal means to reduce their tax obligation. You better believe the IRS would have come knocking already if they were doing anything illegal by keeping that $269B outside of the U.S.
- danjoc 9y ago
  >if they were doing anything illegal by keeping that $269B outside of the U.S. You've reversed cause and effect. They keep the money outside the U.S. to legally avoid the taxes. They can't bring it back. They'd rather horde the cash than contribute Apple's fair share to the country that made Apple's success possible. Deplorable.
  - macintux 9y ago
    I’m sure you would find Apple pays plenty in American taxes. 35% is a huge haircut to take on money earned outside the United States. The shareholders would correctly be out for blood.
    - danjoc 9y ago
      >I’m sure you would find Apple pays plenty in American taxes. I found Apple incorrectly reports to investors taxes paid. "For example, in fiscal year 2011, on its 10-K reports filed with the U.S. Securities and Exchange Commission, Apple said it paid $6.9 billion in taxes to the U.S. government, but on its tax return filed with the U.S. Internal Revenue Service, it reported taxes due of $2.5 billion, the report said." https://www.infoworld.com/article/2614464/techology-business/senate-report--apple-claims-subsidiaries-to-avoid-paying-billions-in-taxes-each-y.html https://www.infoworld.com/article/2614464/techology-business... So yeah, I'm sure you think they pay a lot of money. >35% is a huge haircut to take on money earned outside the United States. 30% is a huge haircut to take on money earned outside the app store, but Apple still demands that too. Suddenly Apple's in favor of taxes. Developer taxes.
      - macintux 9y ago
        What’s more likely? That the SEC ignored Apple blatantly lying to shareholders or that the Senate subcommittee doesn’t actually understand how corporate taxes work? Given that I cannot find any follow-up to that story, I don’t know which if either is correct, but I am skeptical.
      - toasterlovin 9y ago
        All I can say is thank God we live under the rule of law and not the rule of the mob.
  - clarky07 9y ago
    Alternately, how about the US not have absurd laws taxing money made in other countries? This is not a normal thing and most countries don't work this way. If we had sane tax laws, Apple (and ever other multi-national company that works exactly the same way) would bring the money back and put it to work in the US
- ant6n 9y ago
  > You better believe the IRS would have come knocking already if they were doing anything illegal by keeping that $269B outside of the U.S. Note the difference between 'tax avoidance' and 'tax evasion'.
- sib 9y ago
  "Tax avoidance" is precisely "using legal means to reduce ... tax obligation" Tax avoidance is not illegal. Tax evasion is illegal.
  - toasterlovin 9y ago
    I screwed the pooch on this one, thanks for setting me straight.
    - sib 9y ago
      No worries - my first startup's external CPA straightened me out on this one years ago...
- nl 9y ago
  I think that the point being made here is that it isn't entirely clear why the obligation to the company's owners should override the obligation to the country most of its employees live in. I go back and forward on this - I find some elements of it convincing but others not. Either way, I do think that the argument should be presented fairly, and it does seem fair to point out that the legal obligation to the shareholders is defined and enforced by the laws of the country. It doesn't make sense to talk about the shareholder obligation without the acknowledgement that obligation is a construct, and perhaps there is a transitive obligation to the entity which created and enforces that obligation. It is entirely reasonable to consider if that obligation should change (the law is a construct after all) to include other obligations.
  - clarky07 9y ago
    The obligation to the country is to follow the law and pay the taxes the law requires. which they do. Do you avoid taking deductions and send the IRS more than is required each year? Why, just because Apple makes a lot of money, do we expect them to pay more than the law requires of them? That's just absurd.
    - nl 9y ago
      Self regulation is a thing which shows that industry groups often act to avoid legal changes when the legal system doesn't match society's moral view. As I said, I'm not entirely convinced, but nor is it an absurd view. Also, I hate the HN rate limit which applies when I get voted down. It makes it hard to argue the point.
      - toasterlovin 9y ago
        > As I said, I'm not entirely convinced, but nor is it an absurd view. It is an absurd view to think that people and/or companies are morally obligated to pay taxes above and beyond their legal obligations. Paying taxes competes with a person's ability to provide for themselves and their family. To think that a person has an obligation to give extra money to strangers, beyond their legal obligation—which we as a society have collectively agreed upon—rather than keeping that money for themselves and their family is absurd. And, to anticipate where you may go with this: while Apple may be a hugely profitable company, those profits belong to the owners of the company, who are ultimately people who need to provide for themselves and their families.
- deleted 9y ago
  [deleted]
- mpweiher 9y ago
  Well, the EU commission has come knocking, and determined that schemes that Apple tried to sell as perfectly legal tax avoidance were, in fact, illegal tax evasion.
jp555 9y ago
How is this narrative still around? It only takes a few minutes of searching to find out that Apple pays more US tax than almost any other corporation in the country (just a couple oil companies pay more). Apple pays $16B of the total $450B the US collects from all companies. Total US tax receipts are ~2.2T.
- danjoc 9y ago
  >Apple pays more US tax than almost any other corporation It's not about what you pay. It's about what you owe. In Apple's case, Apple owes a lot more than it pays. Tax avoidance == leeches.
  - clarky07 9y ago
    No, they pay exactly what they owe. It is in fact their job to follow the law and find ways to pay as little taxes as possible under the law, which is what they do.
    - mpweiher 9y ago
      Except that the European Commission has determined that they did not pay what they owe. Tax avoidance/evasion by multinationals in Europe was insane. Fortunately the EU is now cracking down on that.
  - nikcub 9y ago
    Only if you believe in a world where the USA has a right to tax all income everywhere
    - rusk 9y ago
      The way it works is, in the USA they tell them they earn this much, in jurisdiction B they tell them they earn that much. Jurisdiction B says "Oh well the majority, Y% of your value is created in the USA so we won't tax you on Y%". So jurisdiction B forgoes that Y% tax, and then the USA doesn't tax it either, and that then goes onto the bottom line! Now, you could say, that's Jurisdiction B's business, but it doesn't undermine the fact that they save a huge amount of tax off their profits courtesy of Jurisdiction B, and this has a highly significant effect on their earnings. What gets really interesting is if Jurisdiction B is part of a larger "Bloc E". They can effectively do business in Bloc E at a highly discounted rate relative to competitors, and even native businesses, and other members of Bloc E start to complain. Who loses out here? Everybody but the tax efficient "Company A" and a bunch of insiders in Jurisdiction B.

microtherion 9y ago

It's worth remembering, though, that Apple has about $100 billion in debt, so net cash is not quite that impressive.

ejanus 9y ago
That is more than Sub-Sahara sovereign debts(SA not included)