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Apple wins $920K tax refund from 1989, loses appeal for overseas tax reprieve - Page 2

post #41 of 67
1/7/12 at 9:16am
Quote:
Originally Posted by ascii View Post

The primary job of any government is to maintain law and order in a given geographical area, and that is the main reason they receive taxes. Therefore taxes should go to the government in the area you earned the money. US companies operating overseas should pay taxes to the local government not the US government.

The primary job of any government is to maintain law and order in ITS OWN COUNTRY. Your premise is off, as is your conclusion.
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post #42 of 67
1/7/12 at 10:11am
Quote:
Originally Posted by DaveN View Post

"A consortium of companies, which includes Apple, has proposed a one-year break that would let companies pay just 5 percent to bring their money home, rather than the 35 percent tax rate they currently face."

I'm an Apple stockholder but I don't think that is fair. I'm not requesting a one time annual tax rate of 5% so I can cash out my 401k with virtually no tax.

Effectively what Apple and the other companies are asking for is treatment similar to other countries. Remember, other countries have already taxed that income. Most countries tax their citizens and companies only on the income earned within that country. The US, Russia, and a few others tax citizens and domiciled corporations on all their worldwide income. The US makes an exception for corporations that don't bring that money back to the US. If they didn't do that, US companies would be at a big disadvantage

However, what the tax policy does, in effect, is discourage US companies from bringing back money made overseas to the US. It encourages them to build up their foreign operations and just leave the money over there.

What would make more sense than all these "holidays," however, is simply to lower the US Corporate tax rate, eliminate a lot of special deductions, and eliminate taxation of non-US income. That would make the tax code fairer for everyone, reduce compliance costs for new and expanding companies (who generate new jobs) while eliminating situations where companies report lots of income but pay lower taxes.
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post #43 of 67
1/7/12 at 10:14am
Quote:
Originally Posted by silverpraxis View Post

But the point you're missing is that Apple gets a tax credit of whatever they already paid to that foreign government. So it's not like they pay 10% to one country and then 35% MORE to the US. When they have to pay the 35% they get a tax credit of the 10% they already paid to the other government. So Apple's tax rate is effectively 35% total paid to all parties, not 45% or something else absurdly astronomical.

35% is one of the highest, and remember, that's also before state taxes (California's tax rates are particularly high).

A UK company pays 28% taxes. However, a UK company with a subsidiary in Hong Kong pays 15% tax on income earned in Hong Kong, and no additional tax if they bring that money back to the UK. A US company in a similar situation would pay another 20% on that Hong Kong income if they brought it back home.

Since Apple makes more money overseas than domestically, that's a big deal for them.
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post #44 of 67
1/7/12 at 10:44am
Quote:
Originally Posted by ascii View Post

The primary job of any government is to maintain law and order in a given geographical area, and that is the main reason they receive taxes. Therefore taxes should go to the government in the area you earned the money. US companies operating overseas should pay taxes to the local government not the US government.

How do you think all those oversea laws that are very favorable to US companies came into effect? US tax dollars. Further, how do you think companies like Apple operating in countries like China came to effect? US tax dollars. Finally, companies like Apple want to be known as US companies because that carries with it certain protections. Those protections carry a cost.

Moreover, realistically the government's only interest should be actual americans. Real living and breathing ones. Without tax revenue, American would look like Egypt. You'd likely be trying to sell stones to rich Chinese tourists.

We like to say, if you don't like American, move somewhere else. Well the same should apply here. If you don't want to pay US taxes, re-incorporate somewhere else. Funny you don't see that happening. Why? Because the US charges a low tax rate, and being a US company currently carries tremendous advantages.
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post #45 of 67
1/7/12 at 10:46am
Quote:
Originally Posted by SolipsismX View Post

I'm confused by the phrase "anti-lobbying group opposing the proposed tax cuts." Aren't they themselves lobbying, but for the opposite outcome. Are they against lobbying or just against corporate tax cuts for offshore profits?

"Protesting" isn't lobbying, its airing your view openly in the public eye.

"Lobbying" is attempting, behind closed doors, to leverage support for a special interest or agenda.

The first seems, to me, potentially to be a traditional and honorable democratic exercise in free speech, while the latter seems like an underhanded attempt to subvert the democratic process by giving economic muscle a disproportionate influence over public policy, out of the public eye.

And, much as I like to see Apple doing well, I think I agree with those who feel that its just a sneaky attempt to avoid paying taxes on your income, with the excuse that you earned it "over there, somewhere".

So I would say that the answers to your questions are, "no, they aren't lobbying", and "both".

AI, "where you sometimes find that you never know what you least expect, most often..."

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AI, "where you sometimes find that you never know what you least expect, most often..."

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post #46 of 67
1/7/12 at 10:53am
Quote:
Originally Posted by KPOM View Post

35% is one of the highest, and remember, that's also before state taxes (California's tax rates are particularly high).

A UK company pays 28% taxes. However, a UK company with a subsidiary in Hong Kong pays 15% tax on income earned in Hong Kong, and no additional tax if they bring that money back to the UK. A US company in a similar situation would pay another 20% on that Hong Kong income if they brought it back home.

Since Apple makes more money overseas than domestically, that's a big deal for them.

This is over simplified. In the UK, a company might pay less on income made overseas being repatriated, however, in the UK income taxes for locally earned income are significantly higher. Further, the Hong Kong example is an outlier in that it is a remnant of Hong Kong recently being a British colony.

Moreover, US companies should be responsible for funding the significant American government overseas operations that largely benefit them. Surely the US spends more then the UK. Regular US taxpayers should have to fund US diplomatic operations that don't benefit them at all.
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post #47 of 67
1/7/12 at 10:54am
Quote:
Originally Posted by silverpraxis View Post

But the point you're missing is that Apple gets a tax credit of whatever they already paid to that foreign government. So it's not like they pay 10% to one country and then 35% MORE to the US. When they have to pay the 35% they get a tax credit of the 10% they already paid to the other government. So Apple's tax rate is effectively 35% total paid to all parties, not 45% or something else absurdly astronomical.

Right and on top of that Apple gets to deduct on its federal return state tax obligations further reducing its over all federal tax liability.
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post #48 of 67
1/7/12 at 11:06am
Quote:
Originally Posted by shompa View Post

The main reason for taxes is that that there are people who want to rule our lives.

The BNP of most countries goes up 3% per year in average. That means that the politicians get 3% more taxes each year without doing anything. Somehow that play away with this money.

I live in the country that have the highest taxes in the world. The lowest tax rate for a worker is 75%. If schools/healthcare/care worked people would never accept these high taxes. This leads to the absurd thing that the government have a self interest that things does not work.

Each government sector get X amount of money. At years end: If a sector is good and haven't spent all money they are punished with lover budget money for the next year. The sectors that misbehave and spends to much money are rewarded and gets more money. The waste is enormous.

The US problem is not low taxes. The problem is unemployment. Even if the country create 100K new jobs/month the unemployment goes up because of that immigration is higher. As a non American I can also see the great white elephant in the US economy: the insane military spending.
Why should Apple buyers money outside US go to these insane spendings?

In Apples case/most companies: They want to have the better tax rules for overseas income and income in US. Apple pays 23% taxes in US. (google 21% and MSFT 7%). Money that are generated in US use US infrastructure that are payed by US taxes. Money that is generated outside US haven't used any US infrastructure. With todays 35% tax rule money generated outside US, for no cost of the US government, is taxed higher the money generated in US.

And last: In a country there are X amount of money. If you rise the taxes there will be less money in the private sector that leads to less jobs. Less jobs means less tax income. Many countries choose then to raise the taxes and they are in a vicious cycle.

Whatever, be glad you have high taxes, pays for programs, free college, healthcare, daycare, etc. Ill trade you spaces. You can come live in "freedom" here.
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post #49 of 67
1/7/12 at 11:10am
This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation -Albert Einstein
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post #50 of 67
1/7/12 at 2:45pm
Quote:
Originally Posted by KPOM View Post

35% is one of the highest, and remember, that's also before state taxes (California's tax rates are particularly high).

First, I agree 35% is a very high tax rate and the US should do like other developed countries and reduce this rate while making taxable other forms of corporate income so can't abuse loopholes.

Second, any state corporate tax Apple pays to California is written off as a deductible business expense so you can't just add CA's 8.84% to the federal level 35%. And in the end they pay much less than that do to deferrals, etc. And they can avoid some taxes altogether by allocating income between business units in different countries (favoring lower tax countries obviously), then asking (lobbying) for a tax holiday in the high tax country where they really want their money invested. Like corporations succeeded in doing in 2004.

Unfortunately, the tax code is so cumbersome it's a wonder anyone pays their taxes correctly at all. I blame everyone that's tried to get out of paying normal tax rates by creating some new form of making money and not calling it "income" or "profit."

If I had $100 last year and this year I have $200, the $100 increase needs to be taxed fairly and equally no matter how I "earned" it. Alas, our system doesn't work that way. But that's another topic.
When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
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When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
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post #51 of 67
1/7/12 at 2:46pm
America is on the road to becoming another Greece or Italy. No one wants to pay taxes.
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post #52 of 67
1/7/12 at 4:19pm
Quote:
Originally Posted by shompa View Post

Money that are generated in US use US infrastructure that are payed by US taxes. Money that is generated outside US haven't used any US infrastructure. With todays 35% tax rule money generated outside US, for no cost of the US government, is taxed higher the money generated in US.

Excellent point.
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post #53 of 67
1/7/12 at 4:22pm
Quote:
Originally Posted by TBell View Post

How do you think all those oversea laws that are very favorable to US companies came into effect? US tax dollars. Further, how do you think companies like Apple operating in countries like China came to effect? US tax dollars. Finally, companies like Apple want to be known as US companies because that carries with it certain protections. Those protections carry a cost.

Should the government be stumping for companies overseas in the first place though, is that their proper role? It's like those people that clean your windshield and then demand payment when you didn't even ask for it in the first place.
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post #54 of 67
1/7/12 at 5:05pm
@ Tbell and Iulius: here here!
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post #55 of 67
1/7/12 at 5:40pm
These things tend to be self-correcting over time anyway. If people don't love a place, they won't try to make it better, and they won't love a place that treats them like a milch-cow.
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post #56 of 67
1/7/12 at 7:24pm
If Apple really wanted to help the US economy, they'd bring that money from overseas and pay the full tax on it.

Does Apple really need 81 billion dollars in their pocket? Share the wealth damn it!
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post #57 of 67
1/7/12 at 8:08pm
You underestimate the knowledge and power of great attorneys and tac accountants, many companies create a large number of shell companies that are used to export money out of the country to avoid taxes, now that the IRS is finally clamping down on this they want a tax holiday! When did you get the opportunity to go in front of the Supreme court and ask for such a thing?
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post #58 of 67
1/7/12 at 8:59pm
Quote:
Originally Posted by ascii View Post

Should the government be stumping for companies overseas in the first place though, is that their proper role? It's like those people that clean your windshield and then demand payment when you didn't even ask for it in the first place.

If Apple wasn't getting protection from US govn't, will they even be able to keep their profit earned in China without paying huge % of that to those corrupted officials? Either way, they've to pay, just differently. The fact that China allows Apple to compete there and not putting up huge hurdles against them is mostly due to the military and political power of the US government.
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post #59 of 67
1/8/12 at 7:06am
Quote:
Originally Posted by drobforever View Post

If Apple wasn't getting protection from US govn't, will they even be able to keep their profit earned in China without paying huge % of that to those corrupted officials? Either way, they've to pay, just differently. The fact that China allows Apple to compete there and not putting up huge hurdles against them is mostly due to the military and political power of the US government.

probably the most accurate and honest assessment here, kudos for a clear and honest view, which is always refreshing.
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post #60 of 67
1/8/12 at 9:07am
Quote:
Originally Posted by Bouncerman View Post

Bloody American country-runners, they're more bothered about today than than tomorrow. Always have been, always will. Bash the last guy, bomb a minority country and spend, that's American policy.

Quote of the day. I don't care what party you are.

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Time Capsule 4, Airport Extreme 5, (3) Apple TV 3

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post #61 of 67
1/8/12 at 9:56am
The non-productive moochers will never learn, that bringing the money home and staying in the private sector is the way to help the economy. To tax Apple and send the money to DC you would only be giving one of the 535 rock stars in congress more ammo for him/her to get re-elected.
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post #62 of 67
1/8/12 at 12:34pm
Apple wants 5% tax on repatriated funds. State wants 35% on repatriated funds. If you add 15% to Apple and subtract 15% from State, how about 20% repatriation as a compromise?

Or just keep the money abroad for advertising.
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post #63 of 67
1/8/12 at 2:30pm
Quote:
Originally Posted by skittlebrau79 View Post

However Apple, like many other companies including Google and Microsoft, use the Double Irish tax loophole that assures them they pay virtually no taxes on those overseas profits either. They can't have it both ways; you either pay taxes in the US or you pay them overseas.

Why should Apple pay taxes to the US government for profits made outside of the Untied States?
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post #64 of 67
1/8/12 at 3:28pm
Quote:
Originally Posted by Joseph Kool View Post

Stupid uerotrash like you are worried about what the United States is doing while your own pathetic country goes the drain. If you idiots spent as much effort fixing your trashy country instead of blaming Americans for all your problems you wouldn't be so damn miserable. Just end yourselves now because you're never going to be happy.

a true internationalist and a class act!
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post #65 of 67
1/9/12 at 3:21am
Quote:
Originally Posted by ascii View Post

Lol, $689,000 in interest. Serves the government right for being so slow.


Huh...? Are you an American? If so, please note your tax dollars are funding the same government that made this boo-boo. Maybe you're happy that the company benefiting from this boo-boo is Apple, but really?

Everyone knows the government is notorious for being inefficient and slow at just about anything. Given the tax code's length and complexity (Anyone down for reading and interpreting 3.8 million words and 80,000 pages of tax code?), I'm not surprised mistakes like this happen at least once in a while.
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post #66 of 67
1/9/12 at 3:34am
Quote:
Originally Posted by ascii View Post

Should the government be stumping for companies overseas in the first place though, is that their proper role? It's like those people that clean your windshield and then demand payment when you didn't even ask for it in the first place.


Not a good analogy really. Seriously, do you even know what you're talking about? I'm starting to think you really don't. You don't seem to have a single tidbit of knowledge on how tax policy and US politics operate. Jesus Christ.


The question is whether the government has a policy interest in taxing overseas profits. The follow-up question is whether said global corporation's operations abroad benefit in some important way from the US government's presence and involvement outside of America. An argument can be made that the US should tax a small portion of Apple's profits earned abroad to pay for the US navy's role in policing and protecting shipments of Apple's goods in other parts of the world. Protection isn't free, and I can guarantee that navy carriers are not cheap to operate. Then there's the US govt's role in sanctioning and protecting Apple's interests abroad. When something goes down in a foreign country that could harm Apple's interest, Apple can count on the US govt to come in represent it on its behalf. Apple will of course bring suit in foreign courts, but it never hurts to have diplomats and not to mention the US president himself stepping in with carrots and sticks to bring to bear. None of this free. Quite frankly, there's no such thing as a free lunch. Look at our debt numbers as evidence.


Worth a thought.
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post #67 of 67
1/9/12 at 3:37am
Quote:
Originally Posted by drobforever View Post

If Apple wasn't getting protection from US govn't, will they even be able to keep their profit earned in China without paying huge % of that to those corrupted officials? Either way, they've to pay, just differently. The fact that China allows Apple to compete there and not putting up huge hurdles against them is mostly due to the military and political power of the US government.


Pretty much. We need to remember that the current economic relationship between the US and China is the result of many years of negotiations conducted and agreements reached between both governments. The US government across multiple administrations has placed an enormous amount of resources into ensuring a business environment that allows US corporations to conduct operations there. US trade representatives are constantly working around the clock on taxpayer dime to protect America's private interests.


So to conclude: Think about all the factors and players involved. We can't just childishly view this in terms of arguing that Apple should be free to do however it wishes without some kind of factual argument to boot. It's not so simple.
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