Great post. The problem is that Apple being Apple gets the headlines even though pretty much any large corporation worth anything is operating under the same rules. If Apple as an entity didn't take advantage of laws, whether people like them or not, they could be held liable by shareholders for not upholding their fiduciary responsibilities. If people think Tim Cook is being dragged over hot coals now, imagine what would happen if Apple didn't operate this way.
While I don't necessarily agree with the fact that these loopholes exist, they do at this point in time.
Regarding ethics, Tim has already gone on record speaking about issues such as the environment and gay rights. So not everything at Apple has to be done for profit...
When ethics and law are at cross purposes, one must follow the law. That is good corporate governance. It is a fiduciary responsibility that must be met. It is ethical behavior. And, most importantly, it supports the rule of law. If you don't like that ethics and the law are at odds, change the law to suit your ethical purpose. If you can't do that, accept that others' views of what is ethical are at odds with yours. If that is still unsettling, either change your ethical values or work to change others'.
if it was done illegally, then Australia should prosecute. If it was done legally according to the rules of the tax code, then someone is doing their job well at Apple finance department.
I agree. It's only natural that any business will do what it can to minimise tax, but...
What's clear is that there's growing public discontent over the situation and just how low the rates of tax actually are. The fact that a conservative financial newspaper conducted and published this research is evidence of that. The rates are so low that Apple and others could be thought of as having tax-free status in the countries in which they operate and make massive multi billion-dollar profits.
What's more, the tax avoidance functions to stifle innovation and competition. Young and smaller companies that can't afford to set up and manage offshore tax havens have a higher burden so it's therefore not a level playing field. They also can't afford to defend themselves vigorously in courts the way the likes of Apple can and does so they're more of a target. The balance is clearly skewed too far towards the big multinationals. I'd prefer to see support and concessions for smaller business instead of the biggest and most profitable companies.
If there's any blame it lies with the government and Tax Office for allowing it. It should be very simple to close the loopholes but they seemingly don't want to. In the end, as always, it'll be the public that forces any kind of change. I think this will happen slowly but there are rumblings of change afoot.
completely agree with everything you wrote above. perfect.
Regarding ethics, Tim has already gone on record speaking about issues such as the environment and gay rights. So not everything at Apple has to be done for profit...
I bet that many people buy more Apple products because they want to support Apple's ethics. People really respond when companies support popular causes.
Successful companies are just the next in line to get the shakedown from tax-happy government grabbers.
Frankly, in the US the IRS should be shutdown and a flat tax (with no write offs) should be enacted. As far as Australia goes, sounds like someone's trying to make points with the ever gullible public by demonizing Apple.
"I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra."
Donating extra would be paying above the expected rate. The rate in Australia is 30% so worst case, Apple pays $2.4b out of the $8b and they still get $5.6b.
We all know governments spend too much money and rarely spend it all the right way but the wealthiest earners skipping paying just passes the costs down to lower earners. There's a breakdown for Australia here:
Apple's $2.4b tax payment alone won't make much of dent in ~$400b ($360b USD) but it helps. $122b of that is for elderly, disabled and kids. $65b for healthcare. $30b education. There's a huge $74b section marked 'other'. Maybe that's for buying no-brand Android tablets and should be scrapped but most of the expenses are beneficial to people and Apple gets the benefit of having a healthy, educated workforce and transport/communications infrastructure to conduct their business.
Their revenue was $26.7b so customers will have paid roughly 10% to the government in sales tax so ~$2.7b. Employees have tax deducted from their salaries before they get it, most retail staff will be paying 19%. Staff costs are in the millions though so the amount is small.
Governments are not a cause of the above expenses, the costs exist as an effect of the needs of the people in the country. If life expectancy goes up, social security goes up and healthcare goes up. If more people have kids, child support and education costs go up. Governments project the needs for the year and set the tax rates for all earning parties to ensure the best quality of life for everyone. When the wealthiest skip paying, the statement they make is that they deserve better than everyone else despite already being far better off than everyone else. The tax payment makes no difference to them, Apple can't even spend the cash fast enough. They dropped $12b on a stock buyback for very little benefit, $2.4b is a fraction of that.
The problem is international law so no single government has the responsibility. That's what the international companies rely on. They are playing governments against each other to drive down the rates. This doesn't work though because you can't use a free market tactic to drive down rates via competition and magically remove the needs of the people in a given country. The country of Ireland has a population 1/10th the size of the state of California, the tax needs can't be the same for both, Luxembourg population of 530k, Cayman Islands population of 57k. If the money passing though a country vastly exceeds the population then the tax rates to support them can be dramatically lower.
What international companies are doing is relying on the workforce and sales from large bodies of people, funnelling the massive profits through small countries that have low populations and they get the best rates while depriving the large bodies of people from support that comes from their taxes.
It is up to the government to stop them doing this but it's not a trivial matter when it involves multiple countries and when companies go to such lengths as having no tax residency at all, that's not something to be applauded. They aren't minimising their taxes for growth, they are avoiding paying what's expected in order to hoard the cash for nobody's benefit.
Governments need to start taxing profits based on point of sale rather than the location of the business. If they do it on a country-wide basis, that's not a problem. Businesses don't have to track individual sales locations between regions/states if they don't want to, they would just be taxed at the highest rate if they don't and the taxes divided between the areas. Apple sells to 31 countries, I don't think it would be hard to track 31 tax rates considering they are mostly the same anyway when they manage to track 100 million+ sales per year.
I have absolutely no reason to believe that Apple did anything illegal in Australia, but what it has done is certainly not ethical. Nor is it good business practice because it risks a consumer and government backlash in many countries, particularly Australia. And Apple really doesn't need to take that sort of risk with its brand.
Apple would be wise to admit that these taxation policies are unethical, and make very significant payments to countries that have been 'diddled' out of taxation revenue by transfer pricing practices. It would be interesting to see how Google and Microsoft responded to this.
Donating extra would be paying above the expected rate. The rate in Australia is 30% so worst case, Apple pays $2.4b out of the $8b and they still get $5.6b.
We all know governments spend too much money and rarely spend it all the right way but the wealthiest earners skipping paying just passes the costs down to lower earners. There's a breakdown for Australia here:
Apple's $2.4b tax payment alone won't make much of dent in ~$400b ($360b USD) but it helps. $122b of that is for elderly, disabled and kids. $65b for healthcare. $30b education. There's a huge $74b section marked 'other'. Maybe that's for buying no-brand Android tablets and should be scrapped but most of the expenses are beneficial to people and Apple gets the benefit of having a healthy, educated workforce and transport/communications infrastructure to conduct their business.
Their revenue was $26.7b so customers will have paid roughly 10% to the government in sales tax so ~$2.7b. Employees have tax deducted from their salaries before they get it, most retail staff will be paying 19%. Staff costs are in the millions though so the amount is small.
Governments are not a cause of the above expenses, the costs exist as an effect of the needs of the people in the country. If life expectancy goes up, social security goes up and healthcare goes up. If more people have kids, child support and education costs go up. Governments project the needs for the year and set the tax rates for all earning parties to ensure the best quality of life for everyone. When the wealthiest skip paying, the statement they make is that they deserve better than everyone else despite already being far better off than everyone else. The tax payment makes no difference to them, Apple can't even spend the cash fast enough. They dropped $12b on a stock buyback for very little benefit, $2.4b is a fraction of that.
The problem is international law so no single government has the responsibility. That's what the international companies rely on. They are playing governments against each other to drive down the rates. This doesn't work though because you can't use a free market tactic to drive down rates via competition and magically remove the needs of the people in a given country. The country of Ireland has a population 1/10th the size of the state of California, the tax needs can't be the same for both, Luxembourg population of 530k, Cayman Islands population of 57k. If the money passing though a country vastly exceeds the population then the tax rates to support them can be dramatically lower.
What international companies are doing is relying on the workforce and sales from large bodies of people, funnelling the massive profits through small countries that have low populations and they get the best rates while depriving the large bodies of people from support that comes from their taxes.
It is up to the government to stop them doing this but it's not a trivial matter when it involves multiple countries and when companies go to such lengths as having no tax residency at all, that's not something to be applauded. They aren't minimising their taxes for growth, they are avoiding paying what's expected in order to hoard the cash for nobody's benefit.
Governments need to start taxing profits based on point of sale rather than the location of the business. If they do it on a country-wide basis, that's not a problem. Businesses don't have to track individual sales locations between regions/states if they don't want to, they would just be taxed at the highest rate if they don't and the taxes divided between the areas. Apple sells to 31 countries, I don't think it would be hard to track 31 tax rates considering they are mostly the same anyway when they manage to track 100 million+ sales per year.
Then what you are referring to is not a problem with Apple transferring legally obtained funds from one area to another but an issue with the way the world works.
That, I suspect, belongs in a wholly separate thread...
(By the way, I agree with you, but I also believe that a single company should not be held responsible for providing the entire R&D of the world, nor it's income either. That's something that should be shared among many )
"I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra."
Good old Kerry, when he survived a heart attack he equipped all the ambulances in NSW with defibrillators.
The journo who wrote this, Chenoworth, has form. He did a similar hatchet job on news ltd a few weeks ago as last year it won an $800 million court case against the ATO. As was clear com the court case, these companies are following the law and maximising benefit to the shareholder, who also pays taxes btw. He is clearly of the school of thought that all your money belongs to the government and whatever it leaves you you should be grateful. I agree with Kerry Packer. You should pay as little tax as possible as the government will never spend Other Peoples' Money as well as the Other People that earnt it.
I agree. It's only natural that any business will do what it can to minimise tax, but...
What's clear is that there's growing public discontent over the situation and just how low the rates of tax actually are. The fact that a conservative financial newspaper conducted and published this research is evidence of that. The rates are so low that Apple and others could be thought of as having tax-free status in the countries in which they operate and make massive multi billion-dollar profits.
What's more, the tax avoidance functions to stifle innovation and competition. Young and smaller companies that can't afford to set up and manage offshore tax havens have a higher burden so it's therefore not a level playing field. They also can't afford to defend themselves vigorously in courts the way the likes of Apple can and does so they're more of a target. The balance is clearly skewed too far towards the big multinationals. I'd prefer to see support and concessions for smaller business instead of the biggest and most profitable companies.
If there's any blame it lies with the government and Tax Office for allowing it. It should be very simple to close the loopholes but they seemingly don't want to. In the end, as always, it'll be the public that forces any kind of change. I think this will happen slowly but there are rumblings of change afoot.
Quote:
Originally Posted by SpamSandwich
Successful companies are just the next in line to get the shakedown from tax-happy government grabbers.
Frankly, in the US the IRS should be shutdown and a flat tax (with no write offs) should be enacted. As far as Australia goes, sounds like someone's trying to make points with the ever gullible public by demonizing Apple.
How would you account for inventory under such a system? Many companies would have to massively rethink distribution, yet under your suggestion they wouldn't be able to write off those costs. This is a problem with scrapping everything and starting over, not to mention the conceptual problems with your entire theory Mr. Economist. You also ignore why the article was published. If they use a big brand like Apple, it gets attention. Apple is incredible at managing PR and attracting media attention, so some of that that will be negative. The net effect of such attention remains in their favor.
Quote:
Originally Posted by Marvin
Governments need to start taxing profits based on point of sale rather than the location of the business. If they do it on a country-wide basis, that's not a problem. Businesses don't have to track individual sales locations between regions/states if they don't want to, they would just be taxed at the highest rate if they don't and the taxes divided between the areas. Apple sells to 31 countries, I don't think it would be hard to track 31 tax rates considering they are mostly the same anyway when they manage to track 100 million+ sales per year.
Much of the time the issue comes down to how profits are calculated. If allowed companies will mess with transfer pricing so that it appears they made nothing.
Governments are not a cause of the above expenses, the costs exist as an effect of the needs of the people in the country. If life expectancy goes up, social security goes up and healthcare goes up. If more people have kids, child support and education costs go up. Governments project the needs for the year and set the tax rates for all earning parties to ensure the best quality of life for everyone.
They are the cause of some of the expense. In economics class in primary school they tell you that the maker of a good works out his costs, adds a little profit for himself, and sells it at that price. But in realty goods are sold at whatever price the market will bear, even many times cost. There was an article on this site a few years ago about software price gouging in Australia, Abode CS 6 being sold for $1,299 in the US but up to $2,699 in AU. That is simply because people here are quite wealthy and can afford it.
So given the tendency of producers to sell at whatever price the market will bear, what will happen to prices in any market the government enters? They have the most money of any organisation, due to taking up to 40% of everyone's income in taxes. So I think those health care costs would be a lot lower if the sellers of health care goods and services knew they were selling to individuals and not the government.
Perfectly legal. Shouldn't be. Offshoring has been around and has stunk since long before Apple made it out of the minor leagues. Somehow it never got addressed because the largest offenders always seemed to be the 'big oil' companies who people somehow expect to be evil. The issue never really gained a lot of attention, and lawmakers are always happy to turn a blind eye for a PAC contribution.
When Exxon Mobil was in front they were getting the heat for it. Apple fans didn't notice, mostly because Exxon isn't Apple. Now Apple is the biggest offender and they get the heat.
Apple hasn't done anything wrong, but hopefully enough attention gets drawn to the issue that our politicians fix it. And by fix it I mean fix the laws, not hold hearings pretending it is the evil corporations fault for legally maximizing profits.
Ireland obviously benefits tremendously from this. US corporations, and others, get all the benefits of being US based. They use our roads, our people, are defended by our military, and benefit tremendously from higher education system. When they have an international trade dispute, they clog and congest the US court system, not the Irish one, with appeal after appeal. All those things cost money, and US taxpayers (and I'm sure Aussies, Brits, Germans etc respectively) it stinks when some of the entities benefitting the most from them are percentage wise paying the least.
Comments
http://mobile.abc.net.au/news/2014-03-06/government-commits-to-chasing-lost-corporate-taxes/5302686
Regarding ethics, Tim has already gone on record speaking about issues such as the environment and gay rights. So not everything at Apple has to be done for profit...
if it was done illegally, then Australia should prosecute. If it was done legally according to the rules of the tax code, then someone is doing their job well at Apple finance department.
I agree. It's only natural that any business will do what it can to minimise tax, but...
What's clear is that there's growing public discontent over the situation and just how low the rates of tax actually are. The fact that a conservative financial newspaper conducted and published this research is evidence of that. The rates are so low that Apple and others could be thought of as having tax-free status in the countries in which they operate and make massive multi billion-dollar profits.
What's more, the tax avoidance functions to stifle innovation and competition. Young and smaller companies that can't afford to set up and manage offshore tax havens have a higher burden so it's therefore not a level playing field. They also can't afford to defend themselves vigorously in courts the way the likes of Apple can and does so they're more of a target. The balance is clearly skewed too far towards the big multinationals. I'd prefer to see support and concessions for smaller business instead of the biggest and most profitable companies.
If there's any blame it lies with the government and Tax Office for allowing it. It should be very simple to close the loopholes but they seemingly don't want to. In the end, as always, it'll be the public that forces any kind of change. I think this will happen slowly but there are rumblings of change afoot.
completely agree with everything you wrote above. perfect.
Regarding ethics, Tim has already gone on record speaking about issues such as the environment and gay rights. So not everything at Apple has to be done for profit...
I bet that many people buy more Apple products because they want to support Apple's ethics. People really respond when companies support popular causes.
Frankly, in the US the IRS should be shutdown and a flat tax (with no write offs) should be enacted. As far as Australia goes, sounds like someone's trying to make points with the ever gullible public by demonizing Apple.
http://mobile.abc.net.au/news/2014-03-06/tax-expert-explains-how-apple-pays-193m-tax-on-27b-revenue/5303426
Donating extra would be paying above the expected rate. The rate in Australia is 30% so worst case, Apple pays $2.4b out of the $8b and they still get $5.6b.
We all know governments spend too much money and rarely spend it all the right way but the wealthiest earners skipping paying just passes the costs down to lower earners. There's a breakdown for Australia here:
http://www.abc.net.au/news/2013-05-09/interactive-budget-2013-where-will-your-tax-go/4682404
Apple's $2.4b tax payment alone won't make much of dent in ~$400b ($360b USD) but it helps. $122b of that is for elderly, disabled and kids. $65b for healthcare. $30b education. There's a huge $74b section marked 'other'. Maybe that's for buying no-brand Android tablets and should be scrapped but most of the expenses are beneficial to people and Apple gets the benefit of having a healthy, educated workforce and transport/communications infrastructure to conduct their business.
Their revenue was $26.7b so customers will have paid roughly 10% to the government in sales tax so ~$2.7b. Employees have tax deducted from their salaries before they get it, most retail staff will be paying 19%. Staff costs are in the millions though so the amount is small.
Governments are not a cause of the above expenses, the costs exist as an effect of the needs of the people in the country. If life expectancy goes up, social security goes up and healthcare goes up. If more people have kids, child support and education costs go up. Governments project the needs for the year and set the tax rates for all earning parties to ensure the best quality of life for everyone. When the wealthiest skip paying, the statement they make is that they deserve better than everyone else despite already being far better off than everyone else. The tax payment makes no difference to them, Apple can't even spend the cash fast enough. They dropped $12b on a stock buyback for very little benefit, $2.4b is a fraction of that.
The problem is international law so no single government has the responsibility. That's what the international companies rely on. They are playing governments against each other to drive down the rates. This doesn't work though because you can't use a free market tactic to drive down rates via competition and magically remove the needs of the people in a given country. The country of Ireland has a population 1/10th the size of the state of California, the tax needs can't be the same for both, Luxembourg population of 530k, Cayman Islands population of 57k. If the money passing though a country vastly exceeds the population then the tax rates to support them can be dramatically lower.
What international companies are doing is relying on the workforce and sales from large bodies of people, funnelling the massive profits through small countries that have low populations and they get the best rates while depriving the large bodies of people from support that comes from their taxes.
It is up to the government to stop them doing this but it's not a trivial matter when it involves multiple countries and when companies go to such lengths as having no tax residency at all, that's not something to be applauded. They aren't minimising their taxes for growth, they are avoiding paying what's expected in order to hoard the cash for nobody's benefit.
Governments need to start taxing profits based on point of sale rather than the location of the business. If they do it on a country-wide basis, that's not a problem. Businesses don't have to track individual sales locations between regions/states if they don't want to, they would just be taxed at the highest rate if they don't and the taxes divided between the areas. Apple sells to 31 countries, I don't think it would be hard to track 31 tax rates considering they are mostly the same anyway when they manage to track 100 million+ sales per year.
Apple would be wise to admit that these taxation policies are unethical, and make very significant payments to countries that have been 'diddled' out of taxation revenue by transfer pricing practices. It would be interesting to see how Google and Microsoft responded to this.
Donating extra would be paying above the expected rate. The rate in Australia is 30% so worst case, Apple pays $2.4b out of the $8b and they still get $5.6b.
We all know governments spend too much money and rarely spend it all the right way but the wealthiest earners skipping paying just passes the costs down to lower earners. There's a breakdown for Australia here:
http://www.abc.net.au/news/2013-05-09/interactive-budget-2013-where-will-your-tax-go/4682404
Apple's $2.4b tax payment alone won't make much of dent in ~$400b ($360b USD) but it helps. $122b of that is for elderly, disabled and kids. $65b for healthcare. $30b education. There's a huge $74b section marked 'other'. Maybe that's for buying no-brand Android tablets and should be scrapped but most of the expenses are beneficial to people and Apple gets the benefit of having a healthy, educated workforce and transport/communications infrastructure to conduct their business.
Their revenue was $26.7b so customers will have paid roughly 10% to the government in sales tax so ~$2.7b. Employees have tax deducted from their salaries before they get it, most retail staff will be paying 19%. Staff costs are in the millions though so the amount is small.
Governments are not a cause of the above expenses, the costs exist as an effect of the needs of the people in the country. If life expectancy goes up, social security goes up and healthcare goes up. If more people have kids, child support and education costs go up. Governments project the needs for the year and set the tax rates for all earning parties to ensure the best quality of life for everyone. When the wealthiest skip paying, the statement they make is that they deserve better than everyone else despite already being far better off than everyone else. The tax payment makes no difference to them, Apple can't even spend the cash fast enough. They dropped $12b on a stock buyback for very little benefit, $2.4b is a fraction of that.
The problem is international law so no single government has the responsibility. That's what the international companies rely on. They are playing governments against each other to drive down the rates. This doesn't work though because you can't use a free market tactic to drive down rates via competition and magically remove the needs of the people in a given country. The country of Ireland has a population 1/10th the size of the state of California, the tax needs can't be the same for both, Luxembourg population of 530k, Cayman Islands population of 57k. If the money passing though a country vastly exceeds the population then the tax rates to support them can be dramatically lower.
What international companies are doing is relying on the workforce and sales from large bodies of people, funnelling the massive profits through small countries that have low populations and they get the best rates while depriving the large bodies of people from support that comes from their taxes.
It is up to the government to stop them doing this but it's not a trivial matter when it involves multiple countries and when companies go to such lengths as having no tax residency at all, that's not something to be applauded. They aren't minimising their taxes for growth, they are avoiding paying what's expected in order to hoard the cash for nobody's benefit.
Governments need to start taxing profits based on point of sale rather than the location of the business. If they do it on a country-wide basis, that's not a problem. Businesses don't have to track individual sales locations between regions/states if they don't want to, they would just be taxed at the highest rate if they don't and the taxes divided between the areas. Apple sells to 31 countries, I don't think it would be hard to track 31 tax rates considering they are mostly the same anyway when they manage to track 100 million+ sales per year.
Then what you are referring to is not a problem with Apple transferring legally obtained funds from one area to another but an issue with the way the world works.
That, I suspect, belongs in a wholly separate thread...
(By the way, I agree with you, but I also believe that a single company should not be held responsible for providing the entire R&D of the world, nor it's income either. That's something that should be shared among many
)
Good old Kerry, when he survived a heart attack he equipped all the ambulances in NSW with defibrillators.
1) companies don't owe tax on revenue you owe it on profits.
2) companies are taxed where they are based not where they sell.
I agree with Kerry Packer. You should pay as little tax as possible as the government will never spend Other Peoples' Money as well as the Other People that earnt it.
Good old Kerry, when he survived a heart attack he equipped all the ambulances in NSW with defibrillators.
Another one of those beautiful ironic examples that we find in life, where one individual's selfishness benefits the many.
For another example, see 'Steve Jobs'.
And no doubt many others.
Brilliant!
I agree. It's only natural that any business will do what it can to minimise tax, but...
What's clear is that there's growing public discontent over the situation and just how low the rates of tax actually are. The fact that a conservative financial newspaper conducted and published this research is evidence of that. The rates are so low that Apple and others could be thought of as having tax-free status in the countries in which they operate and make massive multi billion-dollar profits.
What's more, the tax avoidance functions to stifle innovation and competition. Young and smaller companies that can't afford to set up and manage offshore tax havens have a higher burden so it's therefore not a level playing field. They also can't afford to defend themselves vigorously in courts the way the likes of Apple can and does so they're more of a target. The balance is clearly skewed too far towards the big multinationals. I'd prefer to see support and concessions for smaller business instead of the biggest and most profitable companies.
If there's any blame it lies with the government and Tax Office for allowing it. It should be very simple to close the loopholes but they seemingly don't want to. In the end, as always, it'll be the public that forces any kind of change. I think this will happen slowly but there are rumblings of change afoot.
Successful companies are just the next in line to get the shakedown from tax-happy government grabbers.
Frankly, in the US the IRS should be shutdown and a flat tax (with no write offs) should be enacted. As far as Australia goes, sounds like someone's trying to make points with the ever gullible public by demonizing Apple.
How would you account for inventory under such a system? Many companies would have to massively rethink distribution, yet under your suggestion they wouldn't be able to write off those costs. This is a problem with scrapping everything and starting over, not to mention the conceptual problems with your entire theory Mr. Economist. You also ignore why the article was published. If they use a big brand like Apple, it gets attention. Apple is incredible at managing PR and attracting media attention, so some of that that will be negative. The net effect of such attention remains in their favor.
Quote:
Governments need to start taxing profits based on point of sale rather than the location of the business. If they do it on a country-wide basis, that's not a problem. Businesses don't have to track individual sales locations between regions/states if they don't want to, they would just be taxed at the highest rate if they don't and the taxes divided between the areas. Apple sells to 31 countries, I don't think it would be hard to track 31 tax rates considering they are mostly the same anyway when they manage to track 100 million+ sales per year.
Much of the time the issue comes down to how profits are calculated. If allowed companies will mess with transfer pricing so that it appears they made nothing.
Governments are not a cause of the above expenses, the costs exist as an effect of the needs of the people in the country. If life expectancy goes up, social security goes up and healthcare goes up. If more people have kids, child support and education costs go up. Governments project the needs for the year and set the tax rates for all earning parties to ensure the best quality of life for everyone.
They are the cause of some of the expense. In economics class in primary school they tell you that the maker of a good works out his costs, adds a little profit for himself, and sells it at that price. But in realty goods are sold at whatever price the market will bear, even many times cost. There was an article on this site a few years ago about software price gouging in Australia, Abode CS 6 being sold for $1,299 in the US but up to $2,699 in AU. That is simply because people here are quite wealthy and can afford it.
So given the tendency of producers to sell at whatever price the market will bear, what will happen to prices in any market the government enters? They have the most money of any organisation, due to taking up to 40% of everyone's income in taxes. So I think those health care costs would be a lot lower if the sellers of health care goods and services knew they were selling to individuals and not the government.
Perfectly legal. Shouldn't be. Offshoring has been around and has stunk since long before Apple made it out of the minor leagues. Somehow it never got addressed because the largest offenders always seemed to be the 'big oil' companies who people somehow expect to be evil. The issue never really gained a lot of attention, and lawmakers are always happy to turn a blind eye for a PAC contribution.
When Exxon Mobil was in front they were getting the heat for it. Apple fans didn't notice, mostly because Exxon isn't Apple. Now Apple is the biggest offender and they get the heat.
Apple hasn't done anything wrong, but hopefully enough attention gets drawn to the issue that our politicians fix it. And by fix it I mean fix the laws, not hold hearings pretending it is the evil corporations fault for legally maximizing profits.
Ireland obviously benefits tremendously from this. US corporations, and others, get all the benefits of being US based. They use our roads, our people, are defended by our military, and benefit tremendously from higher education system. When they have an international trade dispute, they clog and congest the US court system, not the Irish one, with appeal after appeal. All those things cost money, and US taxpayers (and I'm sure Aussies, Brits, Germans etc respectively) it stinks when some of the entities benefitting the most from them are percentage wise paying the least.