Would be good if U.S. revised the repatriation of cash... to qualify reduced taxation based on a rigorous and specific spending/investment plan of those dollars. For example, Apple would submit an investment plan including information such as: corporate/operational requirements & SoW , options to fulfill those requirements (including overseas options as well), and benefit/disadvantages of those options. The investment options would describe everything from location of site, equip, matls, and labor.
That's probably not realistic since it would give away too much competitive information, and the record-keeping and reporting requirements would be enormous.
A much simpler solution is for the US move to what most of the rest of the world does: move to a "territorial system" of taxation (i.e., you are presumed to have met your home country tax obligations if you've paid your taxes abroad) as opposed to the current "worldwide system" (where all of the income earned anywhere in the world is taxed when it's brought home). It's the latter that leads to a joke of a situation where US companies have parked well over a trillion dollars of their cumulative profits abroad!
The other large, advanced economies do not have this problem.
The US really needs to get its act together and come out of the Middle Ages when it comes to tax policy.
Great point. How many people on here whining about Apple not paying taxes shop online to avoid sales tax? Despite the fact that, by law, we're all required to declare those purchases and pay that tax to our respective states. That's outright tax dodging compared to what Apple is doing, which is perfectly legal. Yet lets tar and feather all those big evil corporations!
The big corporations pay hundreds of millions of dollar every year to lobbying for favorable corporate tax law. That's how all the corporate tax loopholes are legal.
BTW, sales tax is double taxation. You're paying sales tax with your after tax income. In states where one has to pay state tax, sales tax is triple tax then. Is it fair? Sure, as long as the government says so.
That's probably not realistic since it would give away too much competitive information, and the record-keeping and reporting requirements would be enormous.
A much simpler solution is for the US move to what most of the rest of the world does: move to a "territorial system" of taxation (i.e., you are presumed to have met your home country tax obligations if you've paid your taxes abroad) as opposed to the current "worldwide system" (where all of the income earned anywhere in the world is taxed when it's brought home). It's the latter that leads to a joke of a situation where US companies have parked well over a trillion dollars of their cumulative profits abroad!
The other large, advanced economies do not have this problem.
The US really needs to get its act together and come out of the Middle Ages when it comes to tax policy.
Really - I had no idea that your government is still persisting with that policy.
Yes - it's common for many countries to have tax treaties where the rate of taxation paid overseas is akin to what the company would have had to pay domestically. The company can then repatriate those funds/earnings/profits as declared tax paid. There's many ways around that though, hence the rise in multi layered international companies back to back trading amongst themselves leaving some profit in each - its not perfect, but at least taxes are paid.
I would have thought reversal of that policy would have been a no brainier - instead of borrowing or printing more - try to attract investment back. The world needs a strong us economy now or at least one that is showing signs of recovery.
I realise its more complicated than that but it's lots of little things that make a difference . (Apologies for the digression)
Apple said in their conference call they were in active discussions about the cash and would do what was in best interest of shareholders. Same thing they just said in their press release now. No changes. Nothing new. I see Apple doing a token $2 per share increase and another 2 billion in buyback. Not enough to move the needle. Stock sells off.
Offshore cash is the problem and always will be (for at least 4 years while obama is in office). Romney would have killed the repatriation tax but he did not win. Now apple is handcuffed. Gotta love the politicians. Now that money never comes home. Never gets taxed on dividends. Never goes to work in the USA.
Do you have any evidence that Apple doesn't/didn't pay the required taxes offshore? If so, please post it or provide a link/cite. Otherwise, stop making dumb statements.
Obviously you never heard about "Double Irish with a Dutch Sandwich".
If you don't have a clue stop making dumb statements yourself.
The big corporations pay hundreds of millions of dollar every year to lobbying for favorable corporate tax law. That's how all the corporate tax loopholes are legal.
BTW, sales tax is double taxation. You're paying sales tax with your after tax income. In states where one has to pay state tax, sales tax is triple tax then. Is it fair? Sure, as long as the government says so.
That has little to do with it. Sales tax isn't always the best mechanic to assess such things. Obviously essential items are excluded in some states. California excludes a lot of food products as they're considered necessities. The issue is that policies should be consistent for online and brick and mortar retailers and should be handled in a way that isn't unnecessarily disruptive. I think that is the real problem. There are also many people who fail to understand the rules there. If the company has a physical presence in your state, they're typically registered to collect sales tax there, including sales tax from online purchases. That is why some of them say "we collect sales tax in the following states".
Quote:
Originally Posted by mvigod
Offshore cash is the problem and always will be (for at least 4 years while obama is in office). Romney would have killed the repatriation tax but he did not win. Now apple is handcuffed. Gotta love the politicians. Now that money never comes home. Never gets taxed on dividends. Never goes to work in the USA.
See this is the part that belongs in political outsider. Debating success of prior tax holidays and who is in office could go on forever, and it makes little sense to regurgitate it here.
While I'm not like the lefty trolls on these boards screaming for Apple to "pay their fair share" (a disgusting political soundbite that makes anyone that parrots it seem like they let others think for them), I am a liberal, and I do believe that Amazon was exploiting a hole in federal/state/local tax code as a business model for profit. They could undercut any B&M business and they did. I truly believe they had a hand in bringing down many physical businesses, at least indirectly. It's hard or near impossible to compete with a business that doesn't have to charge sales tax. Finally some states are filling that hole in their tax codes and I applaud them for it. It puts all businesses, online or otherwise, on a more level playing field.
That said, did I purchase things on Amazon? Absolutely. It wasn't illegal and it's a human characteristic to take advantage of a situation when it presents itself. Amazon wasn't evil for exploiting the tax hole. I wasn't evil for exploiting the lower prices that tax hole created. And the governments aren't evil for filling that hole to make B&M businesses more competitive with online businesses. Will I end up paying more in taxes? Yes, but that's the price you pay for living in a relatively safe, stable, and equal society. And I will pay gladly.
If Amazon can't make a profit after the law changes, their business wasn't very good in the first place.
The point was that many people so the same thing Apple does, albeit on a much smaller scale and many of them are the first ones to blast them for it. I do what I can within the law to minimize my tax obligation. You are free to do the same. That doesn't make you any more evil than it does Apple.
Obviously you never heard about "Double Irish with a Dutch Sandwich".
If you don't have a clue stop making dumb statements yourself.
Very cute. Come back and post when you can tell us that: (i) it is illegal (i.e., tax evasion, not tax reduction or avoidance); (ii) Apple is the only US firm doing it; (iii) it contributes materially to reducing Apple's tax burden.
Any fool that reads a newspaper knows what a "Double Irish with a Dutch Sandwich" is.
Romney would have killed the repatriation tax but he did not win.
He said he would have. We don't know that he could have. What we do know that no President -- Republican or Democrat -- has been able to get it done it so far.
Even more so than R&D and marketing- Apple doesn't make a whole lot of money in France. They also make next to nothing in 'profits' in the US.
Apple's Irish subsidiary has China build iPhones for them for $250. Apple Ireland sells these to their Dutch subsidiary with 'IP rights' for $650. The Dutch subsidiary sells it back to the Irish subsidiary for $650. The Irish subsidiary deposits the profit in a Bank in the Bahamas. Apple's Irish subsidiary then sells the phone to the US Apple for $650. Apple US then sells it in their stores to US customers for $650. Since they paid $650 for it they made $0 in profit in the US.
Reality:
The transactions are all on paper. Apple HQ in the US drives design and orders. The phones ship straight from China to the US. The phones are sold in the US by hard working people who generated the wealth to buy the phones in the US. As soon as they buy the phone, the wealth they spent to purchase it is gone from the US economy, no taxes paid. Blech.
So the problem the e16 posted isn't right. The problem isn't that Apple isn't paying taxes on phones they sell in France. The problem is they aren't paying taxes on the phones that are sold in the US- which by and far are the majority of their profits.
Apple paid a total rate of 2.3% in taxes. Apple isn't evil, they are simply maximizing profits. As stated most every large multinational does it. Many pay $0 and billions in profits. The 'perfect loophole' of allowing the money back into the US is a tempting carrot, but disastrous in practice since now every corporation has a 0% effective tax rate by simply offshoring all profits then repatriating them for free.
The problem isn't Apple. Its our laws and how ineffective they are. 'Lowering the corporate tax rate' is a common buzz phrase, but it is really just an excuse to lower the taxes on wealthy individuals. No actual corporation pays anything close to the corporate tax rate. A better fix would be no corporate tax rate (or possibly even personal tax rate)- just have a higher sales tax rate. Items would be taxed at the point of purchase. Savers would be rewarded. Consumers would pay according to how much they consume. Anything sold by wealth created in the US would result in revenues in the US instead of shipping the money offshore.
Economists can come up with a much better plan I'm sure
Actually, Apple paid about 26% taxes in the US last year on sales here.
There are two important factors to consider:
1. While everyone is supposed to pay sales tax on items purchased out of state (where required by law), few people do so. If the law changes to require the seller to collect the money, it will add significantly to state tax revenues.
2. People are choosing to go through the hassle of buying online at least partially to save on sales tax. If they have to pay the sales tax anyway, the savings for shopping online are decreased (particularly if you have to pay shipping). This should add to the competitive of brick and mortar stores. This will also harm Amazon significantly - their business model is partially based on being cheaper and if the cost advantage is decreased, it could hurt their business. And with net margins in the 1-2% range (at best), they can't afford to absorb the difference.
Exactly!
In the beginning of Internet sales, Congress passed a time dated law prohibiting states from taxing online sales. That law was restated a couple of times. But states got around it by declaring that if the company has a "presence" in the state, their online sales could be taxed. The big fight was over whether the companies could be compelled to collect that tax. Amazon, and others, have been fighting that. It's complex, as always, but the states are finding out that they are losing big bucks here that they need for services, and so they are fighting to retain those taxes.
That's not true. Apple complies with all local tax laws. Why should they be double taxed? The income was earned outside the us and taxes were paid where the income was earned. Instead of demanding more tax revenue from businesses (who employ Americans, half of whom pay income tax), why aren't we cutting all the waste? Our military budget is absurd. And for what? Instead of punishing success, why don't we get realistic about spending? I'm not talking about social programs, many of which I support. I'm talking about the black hole of defense spending. If we didn't have that anchor around our collective necks, we'd be the most prosperous country on earth. Where's the uproar over all that needless waste?
Most Americans pay taxes, don't use that proven false 48% politically motivated nonsense.
But Apple does obey all local tax laws. This is why they aren't in court in these countries. While the countries may complain, it's their own fault that Apple's financial people are smarter than their own legislators and experts who put their tax laws together.
All online purchases should be taxed? What about offline then?
Obviously, you are a leftie (nothing wrong with that at all) and are concerned perhaps more with issues of equity as opposed to efficiency, but do you realize that it is the most regressive form of taxation?! I.e., the poor pay more as a share of their income than the rich?
I agree, the rich should be paying much more. It isn't fair to burden the poor with taxes that hit them much more than do the same taxes on the rich. What needs to be u derstood is that wealth is more of a trickle up than trickle down economic situation. The rich always make their money off the poor, but the poor never make money off the rich. Glad you finally understand that!
While that's true, I think there's a simple matter of justice.
Since you have sales taxes in most of the states, it's not fair for the B&M stores to collect it and the online places not to. It basically subsidizes the online retailers. The effect? Amazon has put thousands of local book shops out of business. Those are lost jobs for local stores (Amazon's jobs don't make up for all the losses) and lost revenue for states and cities. To get around that, they end up raising tax rates and therefore charge more to the people who ARE paying it.
The reason the Feds prevented states from collecting taxes from online stores for a number of years was to do exactly what you said; to subsidize their sales to the point where they would become viable competition. But it's become more than just viable competition. The problem in this country is that allowing the states to all collect taxes is consider by a certain group of people to be a tax increase, even though it is no such thing. These days, even the hint of a tax increase, whether true or not, is enough to get people outraged, even though at the same time, they are complaining about decreased services, and poor infrastructure.
The big corporations pay hundreds of millions of dollar every year to lobbying for favorable corporate tax law. That's how all the corporate tax loopholes are legal.
BTW, sales tax is double taxation. You're paying sales tax with your after tax income. In states where one has to pay state tax, sales tax is triple tax then. Is it fair? Sure, as long as the government says so.
All taxes and fees could be called that. It is a meaningless statement.
All online purchases should be taxed? What about offline then?
Obviously, you are a leftie (nothing wrong with that at all) and are concerned perhaps more with issues of equity as opposed to efficiency, but do you realize that it is the most regressive form of taxation?! I.e., the poor pay more as a share of their income than the rich?
Sales tax is regressive in itself, however it's a poor justification for the split between BM and online retailers. Policy shouldn't change on that basis. Anyway I just wanted to add that. Also it's easier to discuss things without the left vs right mentality. Assigned value sets make me cringe.
Comments
Quote:
Originally Posted by drewys808
Would be good if U.S. revised the repatriation of cash... to qualify reduced taxation based on a rigorous and specific spending/investment plan of those dollars. For example, Apple would submit an investment plan including information such as: corporate/operational requirements & SoW , options to fulfill those requirements (including overseas options as well), and benefit/disadvantages of those options. The investment options would describe everything from location of site, equip, matls, and labor.
That's probably not realistic since it would give away too much competitive information, and the record-keeping and reporting requirements would be enormous.
A much simpler solution is for the US move to what most of the rest of the world does: move to a "territorial system" of taxation (i.e., you are presumed to have met your home country tax obligations if you've paid your taxes abroad) as opposed to the current "worldwide system" (where all of the income earned anywhere in the world is taxed when it's brought home). It's the latter that leads to a joke of a situation where US companies have parked well over a trillion dollars of their cumulative profits abroad!
The other large, advanced economies do not have this problem.
The US really needs to get its act together and come out of the Middle Ages when it comes to tax policy.
Quote:
Originally Posted by robbyx
Great point. How many people on here whining about Apple not paying taxes shop online to avoid sales tax? Despite the fact that, by law, we're all required to declare those purchases and pay that tax to our respective states. That's outright tax dodging compared to what Apple is doing, which is perfectly legal. Yet lets tar and feather all those big evil corporations!
The big corporations pay hundreds of millions of dollar every year to lobbying for favorable corporate tax law. That's how all the corporate tax loopholes are legal.
BTW, sales tax is double taxation. You're paying sales tax with your after tax income. In states where one has to pay state tax, sales tax is triple tax then. Is it fair? Sure, as long as the government says so.
Quote:
Originally Posted by ipen
BTW, sales tax is double taxation.
So is corporate tax.
Quote:
Originally Posted by anantksundaram
That's probably not realistic since it would give away too much competitive information, and the record-keeping and reporting requirements would be enormous.
A much simpler solution is for the US move to what most of the rest of the world does: move to a "territorial system" of taxation (i.e., you are presumed to have met your home country tax obligations if you've paid your taxes abroad) as opposed to the current "worldwide system" (where all of the income earned anywhere in the world is taxed when it's brought home). It's the latter that leads to a joke of a situation where US companies have parked well over a trillion dollars of their cumulative profits abroad!
The other large, advanced economies do not have this problem.
The US really needs to get its act together and come out of the Middle Ages when it comes to tax policy.
Really - I had no idea that your government is still persisting with that policy.
Yes - it's common for many countries to have tax treaties where the rate of taxation paid overseas is akin to what the company would have had to pay domestically. The company can then repatriate those funds/earnings/profits as declared tax paid. There's many ways around that though, hence the rise in multi layered international companies back to back trading amongst themselves leaving some profit in each - its not perfect, but at least taxes are paid.
I would have thought reversal of that policy would have been a no brainier - instead of borrowing or printing more - try to attract investment back. The world needs a strong us economy now or at least one that is showing signs of recovery.
I realise its more complicated than that but it's lots of little things that make a difference . (Apologies for the digression)
Offshore cash is the problem and always will be (for at least 4 years while obama is in office). Romney would have killed the repatriation tax but he did not win. Now apple is handcuffed. Gotta love the politicians. Now that money never comes home. Never gets taxed on dividends. Never goes to work in the USA.
Quote:
Originally Posted by anantksundaram
Do you have any evidence that Apple doesn't/didn't pay the required taxes offshore? If so, please post it or provide a link/cite. Otherwise, stop making dumb statements.
Obviously you never heard about "Double Irish with a Dutch Sandwich".
If you don't have a clue stop making dumb statements yourself.
Quote:
Originally Posted by ipen
The big corporations pay hundreds of millions of dollar every year to lobbying for favorable corporate tax law. That's how all the corporate tax loopholes are legal.
BTW, sales tax is double taxation. You're paying sales tax with your after tax income. In states where one has to pay state tax, sales tax is triple tax then. Is it fair? Sure, as long as the government says so.
That has little to do with it. Sales tax isn't always the best mechanic to assess such things. Obviously essential items are excluded in some states. California excludes a lot of food products as they're considered necessities. The issue is that policies should be consistent for online and brick and mortar retailers and should be handled in a way that isn't unnecessarily disruptive. I think that is the real problem. There are also many people who fail to understand the rules there. If the company has a physical presence in your state, they're typically registered to collect sales tax there, including sales tax from online purchases. That is why some of them say "we collect sales tax in the following states".
Quote:
Originally Posted by mvigod
Offshore cash is the problem and always will be (for at least 4 years while obama is in office). Romney would have killed the repatriation tax but he did not win. Now apple is handcuffed. Gotta love the politicians. Now that money never comes home. Never gets taxed on dividends. Never goes to work in the USA.
See this is the part that belongs in political outsider. Debating success of prior tax holidays and who is in office could go on forever, and it makes little sense to regurgitate it here.
The point was that many people so the same thing Apple does, albeit on a much smaller scale and many of them are the first ones to blast them for it. I do what I can within the law to minimize my tax obligation. You are free to do the same. That doesn't make you any more evil than it does Apple.
Quote:
Originally Posted by smalM
Obviously you never heard about "Double Irish with a Dutch Sandwich".
If you don't have a clue stop making dumb statements yourself.
Very cute. Come back and post when you can tell us that: (i) it is illegal (i.e., tax evasion, not tax reduction or avoidance); (ii) Apple is the only US firm doing it; (iii) it contributes materially to reducing Apple's tax burden.
Any fool that reads a newspaper knows what a "Double Irish with a Dutch Sandwich" is.
Quote:
Originally Posted by mvigod
Romney would have killed the repatriation tax but he did not win.
He said he would have. We don't know that he could have. What we do know that no President -- Republican or Democrat -- has been able to get it done it so far.
You should not make everything political.
I don't understand your statement. Those are expenses, subject to tax refunds.
Actually, Apple paid about 26% taxes in the US last year on sales here.
Quote:
Originally Posted by smalM
They didn't pay taxes offshore in the first place. Was that fair?
Why do people think Apple is sitting on a mountain of money like Scrooge McDuck?
15.147 U.S. Treasury securities
15.630 U.S. agency securities
4.063 Non-U.S. government securities
????????? 0.763 Certificates of deposit and time deposits
0.144 Commercial paper
42.405 ?????????Corporate securities
5.398 Municipal securities
?????????13.742 Mortgage- and asset-backed securities
These are long term investments, in total more than 97 billion $.
Maybe Apple should foreclose mortgages and call in the securities so they can make a cash payment to the Government in the form of tax.
Off course, that may leave those using that invested money in the lurch but tough titties, the Government must be paid, right?
Exactly!
In the beginning of Internet sales, Congress passed a time dated law prohibiting states from taxing online sales. That law was restated a couple of times. But states got around it by declaring that if the company has a "presence" in the state, their online sales could be taxed. The big fight was over whether the companies could be compelled to collect that tax. Amazon, and others, have been fighting that. It's complex, as always, but the states are finding out that they are losing big bucks here that they need for services, and so they are fighting to retain those taxes.
Most Americans pay taxes, don't use that proven false 48% politically motivated nonsense.
But Apple does obey all local tax laws. This is why they aren't in court in these countries. While the countries may complain, it's their own fault that Apple's financial people are smarter than their own legislators and experts who put their tax laws together.
I agree, the rich should be paying much more. It isn't fair to burden the poor with taxes that hit them much more than do the same taxes on the rich. What needs to be u derstood is that wealth is more of a trickle up than trickle down economic situation. The rich always make their money off the poor, but the poor never make money off the rich. Glad you finally understand that!
Ah, let's guess; the corporation? It's certainly not the executives.
The reason the Feds prevented states from collecting taxes from online stores for a number of years was to do exactly what you said; to subsidize their sales to the point where they would become viable competition. But it's become more than just viable competition. The problem in this country is that allowing the states to all collect taxes is consider by a certain group of people to be a tax increase, even though it is no such thing. These days, even the hint of a tax increase, whether true or not, is enough to get people outraged, even though at the same time, they are complaining about decreased services, and poor infrastructure.
All taxes and fees could be called that. It is a meaningless statement.
Quote:
Originally Posted by anantksundaram
All online purchases should be taxed? What about offline then?
Obviously, you are a leftie (nothing wrong with that at all) and are concerned perhaps more with issues of equity as opposed to efficiency, but do you realize that it is the most regressive form of taxation?! I.e., the poor pay more as a share of their income than the rich?
Sales tax is regressive in itself, however it's a poor justification for the split between BM and online retailers. Policy shouldn't change on that basis. Anyway I just wanted to add that. Also it's easier to discuss things without the left vs right mentality. Assigned value sets make me cringe.