Multinational tech giants like Apple often 'pay taxes nowhere,' says German minister

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Comments

  • Reply 21 of 52
    carnegiecarnegie Posts: 736member
    rwx9901 said:
    designr said:
    gatorguy said:
    rwx9901 said:
    Corporations do not pay taxes. Period. They collect taxes. Nothing more.
    Please tell that to the IRS.  Please. The corporation I control would love that to be true. The Irish and Apple already thought that as well so tell the EU too. :)
    I think you're missing what he means. Who does the corporation you control get revenue from? Those are the ones paying the taxes. It's just basically an accounting trick that makes it seem the the corporation itself is paying them.
    Thank you.  The consumer, and only the consumer, pays taxes.  Corporations do not pay taxes.  They collect taxes and nothing more.  An example would be this.  If Apple's tax burden were increased by 5% would Apple decrease their profit margin by 5%?  No.  They would more than likely pass that cost onto the consumer rather than face their shareholders and say we are going to reduce our PM by 5%.  Not gonna happen.
    Some taxes on corporations are, effectively, passed through to consumers. Other taxes on corporations are, effectively, passed through to owners (or, rather, taken from what owners might otherwise ultimately receive). It depends on how the tax functions. Corporate income taxes generally fall into the latter category. I've discussed why this is the case elsewhere, so I won't get lost in the methodological realities here. But, in simple terms, it's because X% of B is greater than X% of A if B is greater than A, regardless of what X is (unless it is 0).

    If one can increase pre-tax profit when the applicable income tax rate would be 30%, without unacceptable consequences (e.g. doing long term damage to a brand or negatively affecting install base), then they can increase pre-tax profit when the applicable tax rate would be 20%. So if they would in the former case, why wouldn't they in the latter case? That is unless the goal is to produce a set amount of after-tax profit and they don't want to produce any more than that even if they know how to (and, of course, there aren't other unacceptable consequences to doing so.) That is not the goal of most corporations. They don't, e.g, desire to make exactly $1 billion in after-tax profit and intentionally choose not to do things which might increase that amount.

    Regardless of the applicable tax rate, the way to increase after-tax profit is to increase pre-tax profit.
    edited April 11 muthuk_vanalingamrandominternetperson
  • Reply 22 of 52
    mjtomlinmjtomlin Posts: 2,028member
    They made the laws. Now they think those laws are unlawful. So, who's to blame? Certainly not the people that made the laws. (/s) Apple is not illegally evading taxes as they would like you to believe. Apple is just using loopholes in those laws to maximize profits, as every publicly traded corporation should.

    As someone else said, change the tax laws and close those loopholes.
    And as others have said, if taxes go up in the EU, so will the price of goods.
  • Reply 23 of 52
    carnegiecarnegie Posts: 736member

    rwx9901 said:
    gatorguy said:
    designr said:
    gatorguy said:
    rwx9901 said:
    Corporations do not pay taxes. Period. They collect taxes. Nothing more.
    Please tell that to the IRS.  Please. The corporation I control would love that to be true. The Irish and Apple already thought that as well so tell the EU too. :)
    I think you're missing what he means. Who does the corporation you control get revenue from? Those are the ones paying the taxes. It's just basically an accounting trick that makes it seem the the corporation itself is paying them.
    I can give you a personal example since I do have 2 corporations.

    Neither of them price their products to include corporate taxes on the profits from those sales.

    There's some years they've owed no taxes whatsoever, many more that they have. Pricing in the tax expected at the end of a year based on what profits those corporations factually realize and then adding to each of the products doesn't happen. If we could price our products higher and still maintain our sales goals we would just as EVERY corporation would. We all love profit. We can't compute "what the market will bear" and then add another fee on top for corporate taxes. That would end up counterproductive If we have already priced properly then adding the tax on top would logically result in fewer sales and in all likelihood LESS profit. 

    People that make up these stories that corporations don't pay taxes, consumers do, don't run corporations. 
    Sorry, but that's just not true.  I am a partner in a corporation.  I know how this works.  Is it your contention that you are unaware that the current corporate tax rate stands at 21%?  A corporation always knows what their tax component is and makes the necessary accommodations to their bottom line.  Always.  If it doesn't then that's just irresponsible.  Having said that my example above stands.  If the tax burden on your corporation increases from 21% to 35% would you take less in profit or would you pass it onto the consumer?  
    Let's say the applicable income tax rate is 21%. With that applicable rate a given corporation makes $1 billion in pre-tax profit, so it has $790 million in after-tax profit.

    Let's say the applicable income tax rate is instead 35%. To achieve an after-tax profit of $790 million it would need $1.215 billion in pre-tax profit.

    If it could change its practices - e.g., by increasing consumer prices - such that it would have $1.215 billion in pre-tax profit, then why wouldn't it do that in the first case just as it would in the second? Then, in the first case, it would have $960 million in after-tax profit rather than $790 million. To paraphrase, if it wouldn't that would just be irresponsible.

    The ways in which income taxes function are different from the ways in which, e.g., excise taxes function. They come at different points in various (e.g. pricing) considerations. They affect, e.g., margins and market competition in different ways. Because of that the consequences of them - and the decisions made based on them - are different.
    gatorguymuthuk_vanalingam
  • Reply 24 of 52
    gatorguygatorguy Posts: 21,301member
    rwx9901 said:
    gatorguy said:
    designr said:
    gatorguy said:
    rwx9901 said:
    Corporations do not pay taxes. Period. They collect taxes. Nothing more.
    Please tell that to the IRS.  Please. The corporation I control would love that to be true. The Irish and Apple already thought that as well so tell the EU too. :)
    I think you're missing what he means. Who does the corporation you control get revenue from? Those are the ones paying the taxes. It's just basically an accounting trick that makes it seem the the corporation itself is paying them.
    I can give you a personal example since I do have 2 corporations.

    Neither of them price their products to include corporate taxes on the profits from those sales.

    There's some years they've owed no taxes whatsoever, many more that they have. Pricing in the tax expected at the end of a year based on what profits those corporations factually realize and then adding to each of the products doesn't happen. If we could price our products higher and still maintain our sales goals we would just as EVERY corporation would. We all love profit. We can't compute "what the market will bear" and then add another fee on top for corporate taxes. That would end up counterproductive If we have already priced properly then adding the tax on top would logically result in fewer sales and in all likelihood LESS profit. 

    People that make up these stories that corporations don't pay taxes, consumers do, don't run corporations. 
    Sorry, but that's just not true.  I am a partner in a corporation.  I know how this works.  Is it your contention that you are unaware that the current corporate tax rate stands at 21%?  A corporation always knows what their tax component is and makes the necessary accommodations to their bottom line.  Always.  If it doesn't then that's just irresponsible.  Having said that my example above stands.  If the tax burden on your corporation increases from 21% to 35% would you take less in profit or would you pass it onto the consumer?  
    I should already have been passing along to the consumer all the profits that my product will bear without negatively affecting sales and the profits realized. The taxes have zero impact on that on a standalone company basis. If that were true then you'd be reducing prices in those you owed little to nothing, while other years the prices would rise, sometimes a little and sometimes a lot. It would be a constant up and down year by year. I'm pretty confident that's not what you're doing.

    If you're selling yourself short by not already optimizing prices sans taxes on profits you're not doing your job very well. 
    edited April 11 muthuk_vanalingamCarnage
  • Reply 25 of 52
    KuyangkohKuyangkoh Posts: 375member
    Hey, fixed your tax laws and im sure Corporation that operates in your country will follow that rules, capis??
  • Reply 26 of 52
    racerhomie3racerhomie3 Posts: 1,169member
     products are already taxed at 20-40% around the globe. So ,shut your mouth government.
    SpamSandwich
  • Reply 27 of 52
    rwx9901 said:
    gatorguy said:
    designr said:
    gatorguy said:
    rwx9901 said:
    Corporations do not pay taxes. Period. They collect taxes. Nothing more.
    Please tell that to the IRS.  Please. The corporation I control would love that to be true. The Irish and Apple already thought that as well so tell the EU too. :)
    I think you're missing what he means. Who does the corporation you control get revenue from? Those are the ones paying the taxes. It's just basically an accounting trick that makes it seem the the corporation itself is paying them.
    I can give you a personal example since I do have 2 corporations.

    Neither of them price their products to include corporate taxes on the profits from those sales.

    There's some years they've owed no taxes whatsoever, many more that they have. Pricing in the tax expected at the end of a year based on what profits those corporations factually realize and then adding to each of the products doesn't happen. If we could price our products higher and still maintain our sales goals we would just as EVERY corporation would. We all love profit. We can't compute "what the market will bear" and then add another fee on top for corporate taxes. That would end up counterproductive If we have already priced properly then adding the tax on top would logically result in fewer sales and in all likelihood LESS profit. 

    People that make up these stories that corporations don't pay taxes, consumers do, don't run corporations. 
    Sorry, but that's just not true.  I am a partner in a corporation.  I know how this works.  Is it your contention that you are unaware that the current corporate tax rate stands at 21%?  A corporation always knows what their tax component is and makes the necessary accommodations to their bottom line.  Always.  If it doesn't then that's just irresponsible.  Having said that my example above stands.  If the tax burden on your corporation increases from 21% to 35% would you take less in profit or would you pass it onto the consumer?  
    Are you saying you can just sell your service/product for any price - so price does not matter? Maybe this is true in a pure national environment where tax rates are theoretically the same for every competitor. But usually you would price yourself based on your cost structure and market prices (influenced by the competition). As soon as you have business in an international environment, national tax rates matter, just like national cost structures (labor costs) matter. If you as a tax paying corporation are competing with a non tax paying corporation, you will be at a significant disadvantage. Just pricing in your national tax rate means that you will be significantly more expensive than your competitor who does not have to price in the any tax.
  • Reply 28 of 52
    SpamSandwichSpamSandwich Posts: 31,511member
    Progressive politicians have two speeds: (A) Taxes and (B) More taxes.
    designr
  • Reply 29 of 52
    StrangeDaysStrangeDays Posts: 8,816member
    Progressive politicians have two speeds: (A) Taxes and (B) More taxes.
    Attempting to make it partisan or ideology-based is foolish on your part. This administration and congress has record deficit spending. It seems conservatives only care about fiscal responsibility when the other party is at the helm.
    DAalsethCarnage
  • Reply 30 of 52
    designrdesignr Posts: 540member
    designr said:
    gatorguy said:
    rwx9901 said:
    Corporations do not pay taxes. Period. They collect taxes. Nothing more.
    Please tell that to the IRS.  Please. The corporation I control would love that to be true. The Irish and Apple already thought that as well so tell the EU too. :)
    I think you're missing what he means. Who does the corporation you control get revenue from? Those are the ones paying the taxes. It's just basically an accounting trick that makes it seem the the corporation itself is paying them.
    Youre trying to argue semantics without any logical thought or understanding of the real world. 
    Insults. How delightful.

    Contrary to your opinion about me, I have a very clear understanding of the real world, as well as logic and semantics. It may in fact be a matter of semantics, but an important one. I am not incorrect on who pays the taxes. This should actually be quite obvious (and logical).
    randominternetperson
  • Reply 31 of 52
    rwx9901rwx9901 Posts: 87member
    rwx9901 said:
    gatorguy said:
    designr said:
    gatorguy said:
    rwx9901 said:
    Corporations do not pay taxes. Period. They collect taxes. Nothing more.
    Please tell that to the IRS.  Please. The corporation I control would love that to be true. The Irish and Apple already thought that as well so tell the EU too. :)
    I think you're missing what he means. Who does the corporation you control get revenue from? Those are the ones paying the taxes. It's just basically an accounting trick that makes it seem the the corporation itself is paying them.
    I can give you a personal example since I do have 2 corporations.

    Neither of them price their products to include corporate taxes on the profits from those sales.

    There's some years they've owed no taxes whatsoever, many more that they have. Pricing in the tax expected at the end of a year based on what profits those corporations factually realize and then adding to each of the products doesn't happen. If we could price our products higher and still maintain our sales goals we would just as EVERY corporation would. We all love profit. We can't compute "what the market will bear" and then add another fee on top for corporate taxes. That would end up counterproductive If we have already priced properly then adding the tax on top would logically result in fewer sales and in all likelihood LESS profit. 

    People that make up these stories that corporations don't pay taxes, consumers do, don't run corporations. 
    Sorry, but that's just not true.  I am a partner in a corporation.  I know how this works.  Is it your contention that you are unaware that the current corporate tax rate stands at 21%?  A corporation always knows what their tax component is and makes the necessary accommodations to their bottom line.  Always.  If it doesn't then that's just irresponsible.  Having said that my example above stands.  If the tax burden on your corporation increases from 21% to 35% would you take less in profit or would you pass it onto the consumer?  
    Are you saying you can just sell your service/product for any price - so price does not matter? Maybe this is true in a pure national environment where tax rates are theoretically the same for every competitor. But usually you would price yourself based on your cost structure and market prices (influenced by the competition). As soon as you have business in an international environment, national tax rates matter, just like national cost structures (labor costs) matter. If you as a tax paying corporation are competing with a non tax paying corporation, you will be at a significant disadvantage. Just pricing in your national tax rate means that you will be significantly more expensive than your competitor who does not have to price in the any tax.
    Here's what I'm saying.  If you know what your tax rate is you make the necessary accommodations to stay competitive.  I'm not arguing the point of who is non-tax paying (collecting) vs tax paying.  That's irrelevant to the back and forth.  All corporations, do what they can to alleviate their tax burden.  The lower the tax burden (tax collection) the more competitive a corporation is as they now have more capital to work with.  But you never answered my question.  If the tax rate jumped from 21% to 35% would you increase the costs of your goods and/or services to make up for the additional burden of 14%?  

    https://www.forbes.com/sites/timworstall/2011/09/22/corporations-do-not-pay-taxes-they-cant-theyre-not-people/#160f1bd16222

    edited April 11
  • Reply 32 of 52
    SpamSandwichSpamSandwich Posts: 31,511member
    Progressive politicians have two speeds: (A) Taxes and (B) More taxes.
    Attempting to make it partisan or ideology-based is foolish on your part. This administration and congress has record deficit spending. It seems conservatives only care about fiscal responsibility when the other party is at the helm.
    But they cut taxes, so as usual you’re unapologetically wrong.
  • Reply 33 of 52
    frankiefrankie Posts: 373member
    designr said:

    Apple CEO Tim Cook has famously insisted that "We pay all of the taxes we owe,"...
    Yep. And that's all I pay too. It's all anyone should pay. This political blathering is just whining about companies and people using the laws as they are currently written to their fullest advantage to keep the money they've earned. Nothing wrong with that. Don't like it? Change the laws. Jurisdictional arbitrage happening? Well, I guess that's life unless we want some kind of one world government (at least for taxation) and eliminate independent nations.
    Which is why the laws need to be changed, or these massive corps should face massive fines, not slaps on the wrists and the CEOs get actual jail time.  Enough its enough.
    edited April 11 muthuk_vanalingam
  • Reply 34 of 52
    mac_dogmac_dog Posts: 706member
    The likes of big pharma, sports franchises that build their stadiums, energy companies, telco’s and the like, have always made deals with respect to taxes. 

    But now, it’s not ok to do that? Does this only apply to tech companies? How about large companies on other sectors? Specifically, the financial sector?
  • Reply 35 of 52
    designrdesignr Posts: 540member
    frankie said:
    designr said:

    Apple CEO Tim Cook has famously insisted that "We pay all of the taxes we owe,"...
    Yep. And that's all I pay too. It's all anyone should pay. This political blathering is just whining about companies and people using the laws as they are currently written to their fullest advantage to keep the money they've earned. Nothing wrong with that. Don't like it? Change the laws. Jurisdictional arbitrage happening? Well, I guess that's life unless we want some kind of one world government (at least for taxation) and eliminate independent nations.
    Which is why the laws need to be changed, or these massive corps should face massive fines, not slaps on the wrists and the CEOs get actual jail time.  Enough its enough.
    It's fine if they want to change the laws, there's a process for that (though I personally am opposed to laws for higher taxes)...but why fines or jail time? If they have broken the law, perhaps. But in most cases this blathering is about the fact that the companies and/or rich people are simply using the laws as designed and someone doesn't like it.
    rwx9901rosse59
  • Reply 36 of 52
    Demonstrably false.
  • Reply 37 of 52
    airnerdairnerd Posts: 673member
    wow, paying no taxes?  Then prosecute them.  Wait, they aren't breaking any laws?  Then I guess get smarter people to write the tax laws.  
  • Reply 38 of 52
    gatorguy said:
    designr said:

    Apple CEO Tim Cook has famously insisted that "We pay all of the taxes we owe,"...
    Yep. And that's all I pay too. It's all anyone should pay. This political blathering is just whining about companies and people using the laws as they are currently written to their fullest advantage to keep the money they've earned. Nothing wrong with that. Don't like it? Change the laws. Jurisdictional arbitrage happening? Well, I guess that's life unless we want some kind of one world government (at least for taxation) and eliminate independent nations.
    Tim Cook also said "...we obey the SPIRIT of the law" and not just the strict wording of the law.
    That part of what he said is BS.
    muthuk_vanalingam
  • Reply 39 of 52
    designrdesignr Posts: 540member
    airnerd said:
    wow, paying no taxes?  Then prosecute them.  Wait, they aren't breaking any laws?  Then I guess get smarter people to write the tax laws.  
    It's not even a matter of smarter.

    My tax accountant once offered (admittedly his opinion) that they will never close (all) the loopholes (at least without opening others) because politicians (and people closely connected to them) benefit from these themselves (often personally).

    There's what's said publicly and what's done privately.

    My own preference would be for fewer (or no) loopholes (for everyone) in exchange for lower rates across the board. This would achieve two things: 1) the best tax results wouldn't go to the smartest or best able to hire smart people, 2) the tax code couldn't be used for any control, social engineering and manipulation strategies. It's just a revenue system to pay for services common to all citizens.

  • Reply 40 of 52
    Corporations recently received an absolutely gigantic tax cut from the U.S. government. If it's true that prices are based on taxes, then that gigantic cut should have resulted in a measurable plunge in consumer prices. Did it? No. It resulted in a measurable increase in profit taking and stock buybacks. 
    edited April 11
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