Former US Senator pens defense of Apple's international tax strategy

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Comments

  • Reply 21 of 38
    jakebjakeb Posts: 559member
    How about this. Every country where you do business can charge you taxes on money made in every other country where you do business. So if you do business in 130 or so countries as Apple does, you can get taxed 130 times. Let's say each country has a corporate tax rate of 35%, like the United States, Apple can pay $45.50 in taxes for every dollar they earn.

  • Reply 22 of 38
    MarvinMarvin Posts: 14,785moderator
    steven n. wrote: »
    That is a warped view. Are you saying the companies go in and do the Yea/Nay votes in congress? This is 100% an legislative issue with 100% of the blame being the Congress of the US.

    The companies have quite a strong influence over at least one side, which has an anti-tax agenda and that side has the majority, which ironically then condemns any attempts at rectifying it:

    http://www.reuters.com/article/2012/11/23/us-usa-fiscal-chambliss-idUSBRE8AM0U320121123

    This obviously works to their benefit because avoiding taxes increases deficits and then we hear about how government spends too much. It all works together:

    - anti-tax proponents in collusion with lobbyists write the tax laws that allow the businesses to avoid tax
    - businesses avoid paying tax and so the governments have a deficit
    - anti-tax proponents point to the deficits as a political point of why government is too large in order to force decreasing public services
    - anti-tax proponents condemn any effort to fix the situation (unless it means things like single-digit taxation) because it's a problem they created and don't want fixed

    To say Apple is in no way responsible for the tax avoidance they pulled off is a bit of a stretch. They certainly wouldn't have managed it without the tax laws in various countries allowing it but the intent of the law is clear. If someone got away with a crime on a technicality such as:

    http://www.freerepublic.com/focus/f-news/1117479/posts

    hopefully you wouldn't say 'well done for using the law against its intent to your best advantage'. The law is to blame for allowing it to happen but so are the people acting against the intent of the law. Laws are just written to control human behaviour. When you declare your profits openly and your tax rates to be well below the rates of any country in which you sell products, that is blatantly acting against the intent of the law, which is to create fair tax rates for everyone.

    Everybody hates paying taxes, everybody likes getting free services but the wealthiest who don't need the free services can't just decide to stop paying for them because they've been fortunate enough to make a lot of profit from the people who do. It would be like deciding not to pay for car insurance because you happen to have a good record of not being involved in accidents, that's not how it works.
  • Reply 23 of 38
    cpr1cpr1 Posts: 41member

    Quote:

    Originally Posted by Marvin View Post



    hopefully you wouldn't say 'well done for using the law against its intent to your best advantage'. The law is to blame for allowing it to happen but so are the people acting against the intent of the law. Laws are just written to control human behaviour. When you declare your profits openly and your tax rates to be well below the rates of any country in which you sell products, that is blatantly acting against the intent of the law, which is to create fair tax rates for everyone.

     


    As long as their tax avoidance is legal, then I would absolutely say "well done".  Publicly held companies answer to their shareholders and their primary responsibility to their shareholders is to maximize value.  Paying taxes that you could have legally avoided is not maximizing value and, in fact, is fiscally irresponsible.

  • Reply 24 of 38
    cpr1cpr1 Posts: 41member

    Quote:

    Originally Posted by Marvin View Post



    Everybody hates paying taxes, everybody likes getting free services but the wealthiest who don't need the free services can't just decide to stop paying for them because they've been fortunate enough to make a lot of profit from the people who do. It would be like deciding not to pay for car insurance because you happen to have a good record of not being involved in accidents, that's not how it works.


    What?????  What point are you trying to make with that first sentence?  As far as the second sentence is concerned, people with great driving records already pay significantly less than those with poor driving records -- not free, but significantly less. And this IS how that works.  In your scenario, are you saying they wouldn't pay for insurance at all, but would still have coverage?  I just don't see how this applies to Apple's tax responsibilities.

  • Reply 25 of 38
    isteelersisteelers Posts: 738member
    apple ][ wrote: »
    The morons and un-American politicians that are blaming Apple for not paying their "fair share" are the ones that are responsible for the ridiculous tax laws to begin with. The tax laws are a mess because of them and they themselves are to blame. Do these people not take any responsibility for their own actions? Don't answer that, because I already know the answer.

    How dare they call in Apple to be questioned for merely following the law.  Do these hypocritical thugs who criticize Apple pay more than they should when filing their own taxes? No? Well, then they should STFU.

    And this doesn't just apply to Apple, but it applies to any company or person that follows the current tax laws. As long as it's legal, then there is nothing to talk about really. Who are these communists and fascists to decide what somebody else's "fair share" is? If we're deciding what's fair, then we should open up a few gulags in Alaska or someplace else that's cold, and send these politicians there, because that sounds fair to me.

    With the way that the incompetent baboons in the government spends our money, I'd say that the less money that you give the Feds, the more patriotic you are and the less the govt can waste, spend and steal.

    Agree 100%. Once politics became viewed as a career instead of a civic duty it all went south. Now politicians are in the business of staying in office and finger pointing.
  • Reply 26 of 38
    isteelersisteelers Posts: 738member
    apple ][ wrote: »
    The dude is a RINO.

    How true, though these days a great many of them are. I think the word conservative is foreign to many of these party members.
  • Reply 27 of 38
    hill60hill60 Posts: 6,992member

    Quote:

    Originally Posted by iSteelers View Post





    Agree 100%. Once politics became viewed as a career instead of a civic duty it all went south. Now politicians are in the business of staying in office and finger pointing.


     


    To stay in office requires money, lots of it and a good relationship with media moguls.


     


    One only has to look at where that money or positive media portrayal comes from and the favours that are given in return become glaringly obvious.

  • Reply 28 of 38
    realisticrealistic Posts: 1,154member

    Quote:

    Originally Posted by Marvin View Post





    The companies have quite a strong influence over at least one side, which has an anti-tax agenda and that side has the majority, which ironically then condemns any attempts at rectifying it:



    http://www.reuters.com/article/2012/11/23/us-usa-fiscal-chambliss-idUSBRE8AM0U320121123



    This obviously works to their benefit because avoiding taxes increases deficits and then we hear about how government spends too much. It all works together:



    - anti-tax proponents in collusion with lobbyists write the tax laws that allow the businesses to avoid tax

    - businesses avoid paying tax and so the governments have a deficit

    - anti-tax proponents point to the deficits as a political point of why government is too large in order to force decreasing public services

    - anti-tax proponents condemn any effort to fix the situation (unless it means things like single-digit taxation) because it's a problem they created and don't want fixed



    To say Apple is in no way responsible for the tax avoidance they pulled off is a bit of a stretch. They certainly wouldn't have managed it without the tax laws in various countries allowing it but the intent of the law is clear. If someone got away with a crime on a technicality such as:



    http://www.freerepublic.com/focus/f-news/1117479/posts



    hopefully you wouldn't say 'well done for using the law against its intent to your best advantage'. The law is to blame for allowing it to happen but so are the people acting against the intent of the law. Laws are just written to control human behaviour. When you declare your profits openly and your tax rates to be well below the rates of any country in which you sell products, that is blatantly acting against the intent of the law, which is to create fair tax rates for everyone.



    Everybody hates paying taxes, everybody likes getting free services but the wealthiest who don't need the free services can't just decide to stop paying for them because they've been fortunate enough to make a lot of profit from the people who do. It would be like deciding not to pay for car insurance because you happen to have a good record of not being involved in accidents, that's not how it works.


    if your 'intent' was to build a reasonable argument, you failed miserably. Courts can and should only enforce the tax laws just like any other law, as they are written, pure and simple. Intent can be debated forever with no definitive result. That is why laws are often revised to put in new language to make the laws enforcement, as intended, easier.


     


    Are the tax laws fair? Was the language written as to clearly define the laws? Maybe or maybe not depending on the viewpoint taken but until they change the wording the laws are what they are and must be enforced as written regardless of intention.


     


    When you file your taxes every year don't you just take every deduction you can, or do you analyze what the intention was for each deduction beforehand to make sure you are in keeping with the spirit of the law?

  • Reply 29 of 38
    ronboronbo Posts: 669member
    @frood
    "profits artificially made overseas"? You do know that Apple actually sells products overseas. You should educate yourself a bit. The issue at hand is that an enormous amount of the profits they make overseas (nothing artificial about it, no additives, no financial shenanigans) has to stay overseas, because the US Treasury wants to do what governments always want to do with someone else's money: get as much of it as they can, then spend the shit out of it.
  • Reply 30 of 38
    ronboronbo Posts: 669member


    @swalon:


    Remember that McCain was one of two ringleaders there. The other was Democrat Levin. He was just as full of shit as McCain was, but most reporters thought it looked better to just quote one of them (for whatever reason). And note that both Rand Paul and John Sununu are Republicans. Feel better now?

  • Reply 31 of 38
    tallest skiltallest skil Posts: 43,399member


    Is the Reply button tripping you up? It's pretty dumb. You want to hit Quote (or Multi, for more than one post at once) to quote others' posts. 

  • Reply 32 of 38
    mdriftmeyermdriftmeyer Posts: 7,503member


    Apple internal efforts invented this scam and it's finally coming to bite them in the butt. There isn't a single GOP rep who will undue these frauds.

     

  • Reply 33 of 38
    christophbchristophb Posts: 1,482member
    steven n. wrote: »
    That is a warped view. Are you saying the companies go in and do the Yea/Nay votes in congress? This is 100% an legislative issue with 100% of the blame being the Congress of the US.

    Not a warped view at all. In the US the Contitutuon clearly states that there are four branches of government with a balance of powers; Legislative, Executive, Judicial and Corporations (read lobbiests). The first three have the power to blame the fourth for all ills. We the People are required to protect (reellect) our 1-3 guys back into office who are then permitted to blame the other 252.

    Clear now?
  • Reply 34 of 38
    christophbchristophb Posts: 1,482member
    Apple internal efforts invented this scam and it's finally coming to bite them in the butt. There isn't a single GOP rep who will undue these frauds.

     

    Scam? If it was a scam, Congress would make it law and exempt themselves... Citation needed? Fed, Social Security, Medicare, Income tax, 401K, IRA, et al.

    Bite them how? Citation needed. As I see it, the Senate will back off cause Cook handed them their collective ass.

    One Party is as complicit as the next or next or next and next... (see Federalist, Whig, Democratic Republicans, et al)
  • Reply 35 of 38
    christophbchristophb Posts: 1,482member
    isteelers wrote: »
    Agree 100%. Once politics became viewed as a career instead of a civic duty it all went south. Now politicians are in the business of staying in office and finger pointing.

    1793
  • Reply 36 of 38
    urbansprawlurbansprawl Posts: 153member
    Apple is taxed on product sales around the world. Apple pays employment taxes around the world. If Apple centrally holds it's European profits in a European country, what's wrong with that? Apple was born in the US, but it manages international subsidiaries because it must by law and is taxed in each country by those laws.

    The question is, why should any company operating in this manner be forced to send money to the US? And obviously no one in their right mind would do so when simply moving that money will result in losing 35% of it!

    So this is just the Senate trying to suck more money out of a company who has paid their dues and has already had a positive impact on the American economy.

    And I agree with the comments applauding Tim Cook's kindness and professionalism. I would have shared some choice words for Senator McCain, who's integrity and intelligence flew out the window by opening his mouth.
  • Reply 37 of 38
    MacProMacPro Posts: 19,492member
    OK, how much did the government "squander away on electric vehicle" companies? Compared to what? What proportion of whose budget was that? What about all the boondoggle spending on Defense (e.g., the F-35)?

    And what is "dummy" healthcare? I assume you mean Obamacare? Do you have data on its implementation, as well as impact on costs and health outcomes that I might have missed?

    Can we please stop with these illiterate political talking points (from the left or the right).

    Well said. It is so nauseating how many people view everything through an extremist lens filter and color everything to fit their own view of the world. Actually I give them too much credit , I suspect they 'auto filter' everything according talking points they were given by what ever extremist commentator / new organization they follow. I seriously doubt there is much 'thinking' involved before they offer their knee jerk and predictable responses to anything vaguely political.
  • Reply 38 of 38
    MarvinMarvin Posts: 14,785moderator
    cpr1 wrote: »
    Publicly held companies answer to their shareholders and their primary responsibility to their shareholders is to maximize value.  Paying taxes that you could have legally avoided is not maximizing value and, in fact, is fiscally irresponsible.

    By that measure, every company paying the expected rate is fiscally irresponsible, which means you'd criticise every company that doesn't follow the lowest common denominator. So you'd be criticising Apple for not having a Cayman Islands bank account? After all, they could save even more tax that way.
    cpr1 wrote:
    What point are you trying to make with that first sentence?

    I'm not sure how else to write it to be clearer. Many wealthy people deride entitlements until they need them. A classic is multi-millionaire Mr Incredible here:


    [VIDEO]


    They were talking about avoiding paying income tax because they didn't like how it was being spent despite taking advantage of it at some point.
    cpr1 wrote:
    In your scenario, are you saying they wouldn't pay for insurance at all, but would still have coverage?

    I'm saying that they don't get to decide how little to pay and expect the same entitlements granted by the payments e.g I'm a good driver so I'll pay $1 but if I have an accident, I expect the same service as everyone else.

    At this point, people are quick to point out how much Apple pays in the US but that's less than what they owe and international tax is well below what they are expected to pay.
    realistic wrote:
    When you file your taxes every year don't you just take every deduction you can, or do you analyze what the intention was for each deduction beforehand to make sure you are in keeping with the spirit of the law?

    Why do people keep bringing up deductions? This isn't what Apple is doing at all. If you have a legitimate deduction (expense) in your business then of course that's ok and I don't think anyone would have an issue with Apple making legitimate deductions because that complies with the intent of the law. What Apple is doing contradicts the intent of the law in order to save billions, which Apple fully acknowledges:

    1000

    They even provided the diagrams of their corporate structure showing what they were doing. Apple's stance is 'we know we're up to no good and here are some pictures and numbers to prove it but you're letting us get away with it so it's really your fault'.
    christophb wrote:
    As I see it, the Senate will back off cause Cook handed them their collective ass.

    I reckon they got the information they needed to issue some changes. It probably won't be all that surprising to see who votes against any reform though.
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