Apple accused of sidestepping taxes, company counters by touting job creation
After being questioned about its tax practices, Apple has issued a public comment to defend itself, noting that it has more than 47,000 total full-time employees in the U.S. in all 50 states.
Apple issued the statement to The New York Times, which published it in full this weekend. It came in response to a report that claimed Apple sidesteps billions of dollars in taxes.
The report revealed that Apple has an office in Reno, Nev., just 200 miles away from its Cupertino, Calif., headquarters, to collect and invest its profits. By doing this, the company avoids paying California's 8.84 percent state income tax on gains.
"Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year," the report by Charles Duhigg and David Kocieniewski said. "As it has in Nevada, Apple has created subsidiaries in low-taxes places like Ireland, the Netherlands, Luxembourg, and the British Virgin Islands ? some little more than a letterbox or an anonymous office ? that help cut the taxes it pays around the world."
The report from the Times comes on the heels of a separate story published earlier this month by the Daily Mail, which highlighted Apple's use of a headquarters in Cork, Ireland, which allows it to pay about half the tax rate than it would in the U.K. That report also noted that Apple has an offshoot based out of the Caribbean, where tax rates are favorable in the British Virgin Islands.
For its part, Apple said it has created an "incredible number of jobs" in the U.S. over the last several years. It noted that the vast majority of the company's global workforce remains in the U.S., where it has more than 47,000 employees.
"By focusing on innovation, we've created entirely new products and industries, and more than 500,000 jobs for U.S. workers ? from the people who create components for our products to the people who deliver them to our customers," Apple's statement reads. "Apple's international growth is creating jobs domestically since we oversee most of our operations from California."
Source: TechNet
The company also went on to discuss its taxes, revealing that it pays an "enormous amount" to various governments. In the first half of its fiscal year 2012, Apple says it generated almost $5 billion in federal and state income taxes, including income taxes withheld on employee stock gains.
"We have contributed to many charitable causes but have never sought publicity for doing so," the company added. "Our focus has been on doing the right thing, not getting credit for it. In 2011, we dramatically expanded the number of deserving organizations we support by initiating a matching gift program for our employees."
It concluded its statement with: "Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules. We are incredibly proud of all of Apple?s contributions."
Back in February, an independent report from TechNet issued a report on the number of jobs the iPhone and its App Store have brought to the U.S. since 2008. The report found that the "App Economy" resulted in the creation of nearly 500,000 U.S. jobs in just four years.
Apple issued the statement to The New York Times, which published it in full this weekend. It came in response to a report that claimed Apple sidesteps billions of dollars in taxes.
The report revealed that Apple has an office in Reno, Nev., just 200 miles away from its Cupertino, Calif., headquarters, to collect and invest its profits. By doing this, the company avoids paying California's 8.84 percent state income tax on gains.
"Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year," the report by Charles Duhigg and David Kocieniewski said. "As it has in Nevada, Apple has created subsidiaries in low-taxes places like Ireland, the Netherlands, Luxembourg, and the British Virgin Islands ? some little more than a letterbox or an anonymous office ? that help cut the taxes it pays around the world."
The report from the Times comes on the heels of a separate story published earlier this month by the Daily Mail, which highlighted Apple's use of a headquarters in Cork, Ireland, which allows it to pay about half the tax rate than it would in the U.K. That report also noted that Apple has an offshoot based out of the Caribbean, where tax rates are favorable in the British Virgin Islands.
For its part, Apple said it has created an "incredible number of jobs" in the U.S. over the last several years. It noted that the vast majority of the company's global workforce remains in the U.S., where it has more than 47,000 employees.
"By focusing on innovation, we've created entirely new products and industries, and more than 500,000 jobs for U.S. workers ? from the people who create components for our products to the people who deliver them to our customers," Apple's statement reads. "Apple's international growth is creating jobs domestically since we oversee most of our operations from California."
Source: TechNet
The company also went on to discuss its taxes, revealing that it pays an "enormous amount" to various governments. In the first half of its fiscal year 2012, Apple says it generated almost $5 billion in federal and state income taxes, including income taxes withheld on employee stock gains.
"We have contributed to many charitable causes but have never sought publicity for doing so," the company added. "Our focus has been on doing the right thing, not getting credit for it. In 2011, we dramatically expanded the number of deserving organizations we support by initiating a matching gift program for our employees."
It concluded its statement with: "Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules. We are incredibly proud of all of Apple?s contributions."
Back in February, an independent report from TechNet issued a report on the number of jobs the iPhone and its App Store have brought to the U.S. since 2008. The report found that the "App Economy" resulted in the creation of nearly 500,000 U.S. jobs in just four years.
Comments
Why Apple finds it necessary to defend themselves publicly against these socialist mouthpieces (Mike Daisey, NY Times) is beyond me. They should just call them up individually late at night, like Steve used to do, and berate them until they cry "Uncle"!
Once again Apple being singled out for something all companies do, legally by the way. Lather, rinse, repeat. And so it goes.
If only employees could have as many successful avenues for avoiding taxes as the corporations that pay them.
Let’s hope this is the tip of the iceberg for constant media stories revealing how corporations and the very wealthiest dodge taxes, resulting (inevitably) in a greater share of the load being borne by the rest of us.
Quote:
Originally Posted by Gatorguy
If only employees could have as many successful avenues for avoiding taxes as the corporations that pay them.
Don't count on that ever happening. Plus, even if employees were given the tax advantages, it is beyond most people to figure out how to "git 'er dun."
Ok. so Apple does a lot of good things.
But it could do one more good thing: It could pay its fair share of taxes!
"Apple accused of sidestepping taxes"
The legal abstraction we call a "corporation" was created, in large part, to enable the wealthy to avoid paying taxes. To focus on any individual corporation is to completely miss the point.
Like so much writing on corporate behavior, the insistence on ignoring context means the result resembles surrealist poetry more than journalism.
Quote:
Originally Posted by nagromme
Let’s hope this is the tip of the iceberg for constant media stories revealing how corporations and the very wealthiest dodge taxes, resulting (inevitably) in a greater share of the load being borne by the rest of us.
It's no "dodge" to pay one's rightful share of taxes. It's just being smart. You must just turn in a 1040-EZ and call it good. Not moi.
Quote:
Originally Posted by Gatorguy
If only employees could have as many successful avenues for avoiding taxes as the corporations that pay them.
An individual could incorporate and there are a number of strategies for minimizing taxes legally. For one thing, have your employer hire you as a consultant and take advantage in that way. In my opinion, a person who does not take advantage of what is available to them to save money is a fool. As they say, "It's not what you make, it's how much you keep".
Quote:
Originally Posted by I am a Zither Zather Zuzz
Ok. so Apple does a lot of good things.
But it could do one more good thing: It could pay its fair share of taxes!
ZZZ, you sure talk a lot of shit about Apple. Do you ever get tired?
Quote:
Originally Posted by rbryanh
"Apple accused of sidestepping taxes"
The legal abstraction we call a "corporation" was created, in large part, to enable the wealthy to avoid paying taxes. To focus on any individual corporation is to completely miss the point.
Like so much writing on corporate behavior, the insistence on ignoring context means the result resembles surrealist poetry more than journalism.
That's too simplistic a view of why corporations were first created (link):
Quote:
Historically, corporations were created by a charter granted by government. Today, corporations are usually registered with the state, province, or national government and regulated by the laws enacted by that government. Registration is the main prerequisite to the corporation's assumption of limited liability. The law sometimes requires the corporation to designate its principal address, as well as a registered agent (a person or company designated to receive legal service of process). It may also be required to designate an agent or other legal representative of the corporation.
Generally, a corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation's directors meet to create bylaws that govern the internal functions of the corporation, such as meeting procedures and officer positions.
The law of the jurisdiction in which a corporation operates will regulate most of its internal activities, as well as its finances. If a corporation operates outside its home state, it is often required to register with other governments as a foreign corporation, and is almost always subject to laws of its host state pertaining to employment, crimes, contracts, civil actions, and the like.
Quote:
Originally Posted by rbryanh
"Apple accused of sidestepping taxes"
The legal abstraction we call a "corporation" was created, in large part, to enable the wealthy to avoid paying taxes.
I don't agree with you. The main advantage to a corporation is/was to shield owners of liability created by the corporation by separating the assets of the owners from the assets of the corporation.
As a owner of a corporation I pay personal taxes as well as corporation taxes.
During a good year most corporations feel they have done well if they have earned 5% after taxes. Apple is unique in their profitability before taxes is extremely high. All the more reason to be as astute in taking every legal deduction and structuring their business to their best advantage. If the government is butthurt because of that, the government has the right and ability to change the tax laws they created.
The hell w/ their job creation. They weren't creating jobs with billions of dollars in tax revenue. Like other large multinational corporations, they know damn well they're avoiding paying taxes with their activities.
Quote:
Originally Posted by rustyshacklefor
The hell w/ their job creation. They weren't creating jobs with billions of dollars in tax revenue. Like other large multinational corporations, they know damn well they're avoiding paying taxes with their activities.
And as it's all legal, there's not much that can be said about it. More money brought in is good for stockholders, employees, and R&D. They're avoiding paying unnecessary taxes.
http://www.geekculture.com/joyoftech/joyarchives/1684.html
Next up - how the New York Times avoids billions in taxes...
As a stock holder I would more than a little annoyed if the Apple leadership did not take every available to maximize profits. It goes without saying there is an expectation they will do nothing illegal or anything that will seriously damage the brand name.
Start your own company. I pay $100 in federal taxes for $100,000 in income. It is legal and the law needs to be reformed. It won't be as long as people are ignorant about how much they are getting ripped off. The reason we have a deficit is that we have made an overly complex and dishonest system. Make Congress reform it and bury any member of Congress that says that tax reform needs to avoid raising taxes. The taxes that should be raised are those who avoid paying taxes. It is really simple. Set a floor like the alternative minimum tax for corporations and investment income over 50,000.
On the other hand, if Apple did not take every loop hole they can find then shame on them. The guilty party is the Lawmakers that made this possible, and not the corporation that is looking after its shareholders.
"Next up - how the New York Times avoids billions in taxes..."
They do it the easy way. They just avoid making a profit.