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I don't understand why some feel the need to defend Apple on this count. They've evaded taxes to an outrageous degree and are sitting on a pile of cash so big

by beloch 13y ago

I don't understand why some feel the need to defend Apple on this count. They've evaded taxes to an outrageous degree and are sitting on a pile of cash so big it would take generations for the company to get anywhere near bankruptcy again. Had they been forced to pay the taxes any sane tax regime would say they owe, they'd still be the same company making the same products. They'd just have a smaller nest-egg. Non sequitur or not, this actually cuts to the heart of the matter. Governments play a huge role in innovation, so we should stop using false claims to the contrary when rationalizing theft of revenues the government is owed for its work. Corporate tax evasion is a crime against innovation and theft from all of us who actually do pay our taxes.

nickff 13y ago
>"They've evaded taxes to an outrageous degree" How did you arrive at this (normative) judgement? They are paying the minimum in taxes that they legally can, so that they can invest the money in research, buy back stocks, or hold it in reserve for some period of time; why is this bad? Do you have any evidence that the government's allocation of additional funds would be more productive than Apple's use of the money?
- gopher1 13y ago
  It's bad because it's unfair. If everyone, including small businesses, got to pay 0% tax, then you might have a good argument. But as it stands, we have a 35% corporate tax rate for everyone except large multi-national companies who have the means to take advantage of the loopholes. Regular Joe Business does not have those means. And of course, these same large companies are spending millions lobbying the government to not reform the code.
  - liber8 13y ago
    This doesn't take away from your point, but from a practical perspective, small businesses pay 0% corporate tax. When you have just a few shareholders, as nearly all small businesses do, all profits get paid out as salary. If small businesses didn't do this, their owners would be taxed twice (first at the corporate level and then again individually). The companies that get squeezed are not the Regular Joe Businesses but the midsize businesses that can't get away with paying out all profits as salary (because they have third party shareholders who don't work for the business) and yet can't afford to set up the necessary bureaucracy to take advantage of things like a Double Irish With a Dutch Sandwich.
  - tzs 13y ago
    Apple's income taxes in the US were $13.1 billion on $50.2 billion in earnings, for an effective income tax rate of 26.2% [1]. I don't know why so many people think Apple pays little or no tax. They are in fact the 3rd largest income tax payer in the US. [1] http://finance.yahoo.com/news/companies-paying-most-taxes-174550448.html http://finance.yahoo.com/news/companies-paying-most-taxes-17...
- scotty79 13y ago
  Why exploiting the flaws in your computer system to get access to things you intended to keep out of reach is bad? The point of having taxes is for government to extract money from companies that collect lots of money from their clients. If you are using technicalities of the system to go against this goal you are only as bad as a hacker that uses technicalities of system you built and maintain to get access to things that were supposed to be protected. Don't get me wrong. I don't see nothing intrinsically wrong in using law or any other system to full extent. What makes it wrong or not are additional circumstances. Evading taxes in badly managed country to fund basic research or education is much less bad than putting this money right in the pockets of various wealthy people so they can buy yahts.
crusso 13y ago
They've evaded taxes The government screws up the tax laws through utter dysfunction and you imply/say that Apple and other big companies are breaking the law? To my knowledge, Apple is paying all of the taxes required by US law. The fact that the government wants a bigger chunk doesn't change the fact that they aren't legally entitled to it.
- gopher1 13y ago
  The government screws up the tax laws because they have been captured by the lobbying arms of large multi-national corporations, including Apple. It's no surprise then that those same corporations are the ones who get to pay 0% taxes while your average startup or mom & pop business has to pay the 35% corporate tax rate because they don't have a dozen tax lawyers on retainer to get them through the loopholes. Why give the corporations who spend millions lobbying against tax reform a pass, just because they're "technically" lawful?
  - crusso 13y ago
    Why give the corporations who spend millions lobbying against tax reform a pass Because unfair taxation is just a symptom of the core problem of too much trust in an institutionally corrupt government.
    - gopher1 13y ago
      So even though you acknowledge that the taxation system is unfair, and that it's due to a corrupt system. Despite the fact that this corrupt crony-capitalist system involves two actors, corporations and government, for some reason, you only blame the government? Just because there may be a better system that exists out there in the abstract, where government is less centralized, and thus potentially less vulnerable to corruption, it seems like quite a bizarre leap of logic to exonerate one of the two main actors in the existing corrupt system. Can you explain your logic please?
      - crusso 13y ago
djschnei 13y ago
Do you actively avoid legal tax breaks because you feel the need to pay your "fair share"? I would bet not. Why should Apple act any differently? They don't evade taxes... They actively seek to pay as little as legally obligated. Anything else would be a disservice to every Apple employee, consumer and financial backer (the only people that should matter to Apple). They're a for profit organization, not a charity...
- gopher1 13y ago
  He probably avoids paying as much tax as he can, but he also probably doesn't spend millions lobbying politicians. The same can't be said for Apple.
  - djschnei 13y ago
    Yea, how dare they spend their money trying to protect their interests.
erehweb 13y ago
The terms of art may be important here. Tax evasion is literally a crime, and different from tax avoidance, which is reducing your taxes by legal means. http://en.wikipedia.org/wiki/Tax_evasion http://en.wikipedia.org/wiki/Tax_evasion

by beloch 13y ago

nickff 13y ago

>"They've evaded taxes to an outrageous degree" How did you arrive at this (normative) judgement? They are paying the minimum in taxes that they legally can, so that they can invest the money in research, buy back stocks, or hold it in reserve for some period of time; why is this bad? Do you have any evidence that the government's allocation of additional funds would be more productive than Apple's use of the money?

gopher1 13y ago
It's bad because it's unfair. If everyone, including small businesses, got to pay 0% tax, then you might have a good argument. But as it stands, we have a 35% corporate tax rate for everyone except large multi-national companies who have the means to take advantage of the loopholes. Regular Joe Business does not have those means. And of course, these same large companies are spending millions lobbying the government to not reform the code.
- liber8 13y ago
  This doesn't take away from your point, but from a practical perspective, small businesses pay 0% corporate tax. When you have just a few shareholders, as nearly all small businesses do, all profits get paid out as salary. If small businesses didn't do this, their owners would be taxed twice (first at the corporate level and then again individually). The companies that get squeezed are not the Regular Joe Businesses but the midsize businesses that can't get away with paying out all profits as salary (because they have third party shareholders who don't work for the business) and yet can't afford to set up the necessary bureaucracy to take advantage of things like a Double Irish With a Dutch Sandwich.
- tzs 13y ago
  Apple's income taxes in the US were $13.1 billion on $50.2 billion in earnings, for an effective income tax rate of 26.2% [1]. I don't know why so many people think Apple pays little or no tax. They are in fact the 3rd largest income tax payer in the US. [1] http://finance.yahoo.com/news/companies-paying-most-taxes-174550448.html http://finance.yahoo.com/news/companies-paying-most-taxes-17...
scotty79 13y ago
Why exploiting the flaws in your computer system to get access to things you intended to keep out of reach is bad? The point of having taxes is for government to extract money from companies that collect lots of money from their clients. If you are using technicalities of the system to go against this goal you are only as bad as a hacker that uses technicalities of system you built and maintain to get access to things that were supposed to be protected. Don't get me wrong. I don't see nothing intrinsically wrong in using law or any other system to full extent. What makes it wrong or not are additional circumstances. Evading taxes in badly managed country to fund basic research or education is much less bad than putting this money right in the pockets of various wealthy people so they can buy yahts.

crusso 13y ago

They've evaded taxes The government screws up the tax laws through utter dysfunction and you imply/say that Apple and other big companies are breaking the law? To my knowledge, Apple is paying all of the taxes required by US law. The fact that the government wants a bigger chunk doesn't change the fact that they aren't legally entitled to it.

gopher1 13y ago
The government screws up the tax laws because they have been captured by the lobbying arms of large multi-national corporations, including Apple. It's no surprise then that those same corporations are the ones who get to pay 0% taxes while your average startup or mom & pop business has to pay the 35% corporate tax rate because they don't have a dozen tax lawyers on retainer to get them through the loopholes. Why give the corporations who spend millions lobbying against tax reform a pass, just because they're "technically" lawful?
- crusso 13y ago
  Why give the corporations who spend millions lobbying against tax reform a pass Because unfair taxation is just a symptom of the core problem of too much trust in an institutionally corrupt government.
  - gopher1 13y ago
    So even though you acknowledge that the taxation system is unfair, and that it's due to a corrupt system. Despite the fact that this corrupt crony-capitalist system involves two actors, corporations and government, for some reason, you only blame the government? Just because there may be a better system that exists out there in the abstract, where government is less centralized, and thus potentially less vulnerable to corruption, it seems like quite a bizarre leap of logic to exonerate one of the two main actors in the existing corrupt system. Can you explain your logic please?
    - crusso 13y ago

djschnei 13y ago

Do you actively avoid legal tax breaks because you feel the need to pay your "fair share"? I would bet not. Why should Apple act any differently? They don't evade taxes... They actively seek to pay as little as legally obligated. Anything else would be a disservice to every Apple employee, consumer and financial backer (the only people that should matter to Apple). They're a for profit organization, not a charity...

gopher1 13y ago
He probably avoids paying as much tax as he can, but he also probably doesn't spend millions lobbying politicians. The same can't be said for Apple.
- djschnei 13y ago
  Yea, how dare they spend their money trying to protect their interests.

erehweb 13y ago

The terms of art may be important here. Tax evasion is literally a crime, and different from tax avoidance, which is reducing your taxes by legal means. http://en.wikipedia.org/wiki/Tax_evasion http://en.wikipedia.org/wiki/Tax_evasion