Bernie Sanders bemoans Apple's overseas supply chain, tax avoidance strategy

Posted:
in General Discussion edited April 2016
In a recent interview, candidate for the Democratic presidential nomination Bernie Sanders took issue with Apple's reliance on Chinese manufacturing partners, a position voiced earlier in the campaign cycle by Republican demagogue Donald Trump.


Source: Bernie Sanders via Instagram


Apple came up first in a wide-ranging point-by-point platform discussion with the New York Daily News, and while Sanders didn't go so far as to say the company was one of the corporate fat cats "destroying the fabric of America," he did express disappointment in Apple's decision to offshore a bulk of its manufacturing needs.

"No, Apple is not destroying the fabric of America," Sanders said, referencing his own oft-quoted, and colorful, illustration of corporate America. "But I do wish they'd be manufacturing some of their devices, here, in the United States rather than in China. And I do wish that they would not be trying to avoid paying their fair share of taxes."

Asked to name three corporations that do have an appetite for destruction, Sanders said, "JPMorgan Chase, and virtually every other major bank in this country."

Sanders' take on Apple is not uncommon. The company's high-flying financials and deep ties with Asian device makers like Foxconn are great fodder for political stump speeches on America's economic climate which, according to pols, can be summed up as hazy with a chance of doom. On the other side of the aisle -- miles off center -- Trump offered his own take on the current state of high-tech, albeit in a more forthright manner than his Democratic opponent.

In January, the steak-hocking business mogul promised that, when elected, he would force Apple into manufacturing its products in America rather than rely on overseas labor. As is his wont, Trump, an avid iPhone user, turned the rhetoric up to 11 a month later, calling for supporters to boycott Apple in an infamous hot take on the San Bernardino encryption row.

After holding out for what must have been an excruciating three weeks, Trump apparently succumbed, returning to iPhone for his usual Twitter tongue-lashings.

As it stands, only one Mac -- the Mac Pro -- is assembled stateside. In fact, many of the components powering Mac Pro, sourced from third-party vendors, are manufactured outside the U.S.

The tax issue is arguably more polarizing than Apple's supply chain strategy. Like many multinationals, including a number of fiscally bloated tech firms, Apple adheres to an accounting strategy that routes offshore moneys through subsidiaries in low- to no-tax zones, effectively avoiding high U.S. corporate tax rates. For Apple, the end result is a massive offshore cash pile worth more than $200 billion as of December.

Apple's technique has raised the ire of U.S. lawmakers keen on taking a slice of any repatriated funds, as well as international oversight bodies like the European Commission, which is currently investigating Apple's Irish dealings. It was estimated in January that Apple could owe more than $8 billion in European back taxes.

In the end, the sociopolitical arguments posed by Sanders, Trump and other state actors fall flat when measured against a working capitalist model. Manufacturing in America often goes hand-in-hand with extremely high overhead, as compared to equally efficient Chinese counterparts. Apple is a publicly traded company that, despite its admirable Supplier Responsibility and environmental side projects, is ultimately focused on the bottom line. Considering the financials, not to mention billions of dollars and man hours spent on establishing a diverse Asian supply chain, Apple is unlikely to "feel the Bern" anytime soon.
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Comments

  • Reply 1 of 89
    Bernie Sander's opinion is pretty much idiotic when his solution is to increase corporate tax rates to 50%.    You want to see companies keep their money over seas... vote Bernie because nobody will ever want to bring their money home with his tax plans to screw over businesses.  
    tallest skilstevehcalijonljdwmike1latifbpjfc1138equality72521anantksundaram
  • Reply 2 of 89
    If you're that upset about it Bernie stop being for a taxation of about 70% of corporate income. Currently it's between 40 and 52% and you wonder why they are going overseas. I can't blame them. It may be what you call "greedy "however it's simply a business move. Why not go where you can make growth and offer more for research and development. It's their right as a company
    tallest skilstevehcalijdwmike1equality72521anantksundaramjbdragon
  • Reply 3 of 89
    Firstly, the 27" iMac was made in the US last I checked. Secondly, he's a communist, what do you expect? And before some hippies come in spewing that "he's a democratic socialist" crap, Lenin and Stalin claimed the same thing in their early days.
    tallest skilstevehjonlmike1equality72521jbdragon
  • Reply 4 of 89
    prolineproline Posts: 188member
    On the other side of the aisle -- miles away from the middle -- Trump offered his own take on the current state of high-tech, albeit in a more forthright manner than Sanders.
    Trump and Bernie are far from opposites. Both are populists- i.e. people who will say whatever their supports think even if they know it is false or impractical (surely after a career this long Bernie understands that ripping up trade agreements and starting trade wars left, right, and centre won't bring prosperity). Both offer voters simple "common sense" solutions to complex programs that have long defied such an approach. And both are more than willing to promise what they cannot deliver- the president cannot dictate the budget or any other laws.
    jonlmessagepad2100moreckequality72521larryaanantksundaramafrodri
  • Reply 5 of 89
    I have often wondered what qualities the Trump name brings to a slab of cow flesh. He's a real estate developer.
    justadcomicsmessagepad2100
  • Reply 6 of 89
    cpsrocpsro Posts: 2,449member
    "But I do wish they'd be manufacturing some of their devices, here, in the United States rather than in China."
    That would be the Mac Pro.

    tallest skilstevehmoreckjbdragon
  • Reply 7 of 89
    cpsrocpsro Posts: 2,449member

    "And I do wish that they would not be trying to avoid paying their fair share of taxes."
    Apple does try to pay its fair share. and nothing more. And that's what's expected of them and anyone else.
    tallest skilcalijkichlinejony0mike1equality72521propodanantksundaramjbdragon
  • Reply 8 of 89
    Swift2Swift2 Posts: 4member
    The Mac and the iOS stuff will not come back. If it does, however, it will be built by robots, like Liam, that can disassemble an iPhone in 12 seconds-- so it can build one. 100 sophistated robots working at machine speeds, this is enough to make all but the largest-selling models. 
    equality72521jbdragon
  • Reply 9 of 89
    tallest skiltallest skil Posts: 43,399member
    I do wish that they would not be trying to avoid paying their fair share of taxes.
    Who are you to decide what is fair and why, though?
    mike1latifbpequality72521jbdragon
  • Reply 10 of 89
    cpsrocpsro Posts: 2,449member
    Swift2 said:
    The Mac and the iOS stuff will not come back. If it does, however, it will be built by robots, like Liam, that can disassemble an iPhone in 12 seconds-- so it can build one. 100 sophistated robots working at machine speeds, this is enough to make all but the largest-selling models. 
    I'll think of Liam as more than just a one-off, 60-second marketing gimmick, when Apple shows off a roomful of Liams running 24x7 for months.
    edited April 2016 ronn
  • Reply 11 of 89
    tzeshantzeshan Posts: 1,887member
    Fair share of taxes?  Good point.  Apple has hundreds of billions dollars profit parked in overseas.  Is US completely entitled to tax it?  I think this is a big question.  The problem is Apple makes the money not from selling products to Americans but to foreign country.  I think the tax code in this global economy is outdated.  
    latifbpAni
  • Reply 12 of 89
    I hope Bernies other ideas are better informed than this. (Obviously, as the Mac Pro is built in the USA.)

    But what he suggests also echoes another piece of faulty logic: that share held companies such as Apple are going to needless pay additional tax or operate inefficiently just to please the election cycle.

    It's the job of the politicians to make the USA available and enticing through good policy making: such as infrastructure and education investments and sensible taxation. Arbitrarily asking existing companies to act against their own interests is plainly lazy, it is avoiding their own hard work and hysterically naive to the consequences of what that inefficiency would bring to ordinary Americans who invest in Apple's shares. 
    frac
  • Reply 13 of 89
    rogifan_newrogifan_new Posts: 3,825member
    First year I won't be voting since I was eligible to vote. 
    cali
  • Reply 14 of 89
    wizard69wizard69 Posts: 12,719member
    Bernie Sander's opinion is pretty much idiotic when his solution is to increase corporate tax rates to 50%.    You want to see companies keep their money over seas... vote Bernie because nobody will ever want to bring their money home with his tax plans to screw over businesses.  
    Sanders certainly is a problem child. It is almost as if he is living in a fantasy land. The problem is, while I like many of Trumps points it is things like this that have me equally concerned about who to vote for when the time comes. This is one of the few election cycles where none of the above seems to be the only rational choice. I sometimes wonder if Trumps way off base comments come from years negotiating business deals where you might offer up an outlandish proposal and the beginning knowing full well that the final deal will be more equitable when finalized. The thing here is both Sanders and Trump are right in that Apple needs a little social pressure to find better places to do business. That doesn't even mean come to the USA, it simply means select business partners where the government is a bit more respectful of their citizens.
    cali
  • Reply 15 of 89
    wood1208wood1208 Posts: 1,875member
    Bernie or any politicians who typically talks jibber-jabber. So, what is fair tax ? Isn't congress/IRS make tax laws and we all including corporations pay taxes. Government changes tax laws and that changes paying how much taxes.
  • Reply 16 of 89
    wizard69wizard69 Posts: 12,719member
    I do wish that they would not be trying to avoid paying their fair share of taxes.
    Who are you to decide what is fair and why, though?
    A fair share is just that. For example personal income might be taxed at 15% for everybody, that is a fair share as each and everyone pays the same percentage of their income to the tax man. Once you start to add arbitrary tax brackets the system becomes unfair. when I say everybody I mean everybody pays the same tax rate be you the local high school janitor or the head of Apple. The same thing goes for business tax them all at the same rate and make sure all of them pay taxes at that rate. Get rid of all of the exceptions, special cases and the non sense congress spend months building into the tax laws each year. It isn't a question of deciding what is fair that is already known if you have had any sort of reasonable upbringing. Consider a birthday cake, do you cut the slices in reasonably closely sized cubes or do you vary the size of the slices to make sure your friends get the bigger pieces? Most people would consider making the slices the same size fair, anything else is biased.
    jax44calijony0
  • Reply 17 of 89
    quinneyquinney Posts: 2,524member
    Is Bernie's face really that red?  If he gets nominated, it could be red vs. orange.
  • Reply 18 of 89
    wizard69wizard69 Posts: 12,719member
    cpsro said:
    Swift2 said:
    The Mac and the iOS stuff will not come back. If it does, however, it will be built by robots, like Liam, that can disassemble an iPhone in 12 seconds-- so it can build one. 100 sophistated robots working at machine speeds, this is enough to make all but the largest-selling models. 
    I'll think of Liam as more than just a one-off, 60-second marketing gimmick, when Apple shows off a roomful of Liams running 24x7 for months.
    Beyond that people don't realize that you need a whole lot of human resources to keep those robots running. This I can say from personal experience, automated production does not mean human free production
  • Reply 19 of 89
    wizard69wizard69 Posts: 12,719member
    First year I won't be voting since I was eligible to vote. 
    I have to vote, it is my civic duty but man it won't be satisfying as in past years. I usually vote towards the right often with a libertarian view point. While I like Trumps speech about dealing with uncontrolled immigration I don't think the guy will hold firm on what he has said. He has the feeling of being in the early cycles of a business deal where you start out of the ball park even though you know you will eventually reach a viable deal for you and the other party. The problem is knowing where that line is for Trump. At this stage in the election cycle it kinda looks like my vote will be against whom ever the democrats choose. In other words if clinton is nominated it really doesn't matter who the republicans nominate as I will be voting in the hopes that Clinton never gets elected. It is sad really that you may have to make such a decision but it is better to keep somebody that is a real danger to America and the world out of office. In this regard I think Clinton is the worst possible president we could elect. Sanders on the other hand is the dream candidate for the lazy.
    tallest skil
  • Reply 20 of 89
    asdasdasdasd Posts: 5,265member
    Swift2 said:
    The Mac and the iOS stuff will not come back. If it does, however, it will be built by robots, like Liam, that can disassemble an iPhone in 12 seconds-- so it can build one. 100 sophistated robots working at machine speeds, this is enough to make all but the largest-selling models. 
    Factories have been automated for 100 years. Still need people. 
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