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[New York Times] How Apple Sidesteps Billions in Taxes

11K views 198 replies 81 participants last post by  ocmi_teddy 
#1 ·
apple-logo-broken.png

Quote:
Originally Posted by The New York Times
Apple, the world's most profitable technology company, doesn't design iPhones here. It doesn't run AppleCare customer service from this city. And it doesn't manufacture MacBooks or iPads anywhere nearby.

Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states.

Apple's headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company's profits, Apple sidesteps state income taxes on some of those gains.

California's corporate tax rate is 8.84 percent. Nevada's? Zero.

Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands - some little more than a letterbox or an anonymous office - that help cut the taxes it pays around the world.
Article: http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=1

Edit: Please keep politics out of this thread.

Got a problem with that rule? Then don't post in here. Simple as that.
Quote:
Originally Posted by dontpwnmebro View Post

economics is not politics.
 
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#5 ·
Quote:
Originally Posted by Munkypoo7 View Post

Not surprising at all, like so many other companies, Apple takes advantage of the broken tax codes.
Yep, I'm with you there. GE earned $14.2 billion and since something like 9 billion was from overseas they paid $0 taxes on those earnings AND received a $3.2 BILLION dollar Tax benefit.
 
#9 ·
Quote:
Originally Posted by .:hybrid:. View Post

This isn't apple specific, most large corporation do this.
Yep.

Although, I do remember a couple of years ago Apple had the nerve to ask the US Gov't for a "tax holiday" to bring their cash from foreign banks into the US tax-free, supposedly to "stimulate the economy and create jobs." I raged hard. If our tax code didn't kiss the behinds of the corporations and allow them to skirt the taxes that they owe, our deficit wouldn't be so high.

If I were in charge (and these people better be glad I'm not) they'd be paying 60% and dealing with it.
 
#10 ·
Quote:
Originally Posted by MasterFire View Post

Did they seriously put the Netherlands in that list? Because that is absolute crockery, no way they've set up shop here for the tax advantage, because there isn't any whatsoever.
Read the article, it explains the 'Double Irish With a Dutch Sandwich' technique for lowering corporate taxes.
 
#11 ·
Quote:
Originally Posted by Malcolm View Post

Yep.
Although, I do remember a couple of years ago Apple had the nerve to ask the US Gov't for a "tax holiday" to bring their cash from foreign banks into the US tax-free, supposedly to "stimulate the economy and create jobs." I raged hard. If our tax code didn't kiss the behinds of the corporations and allow them to skirt the taxes that they owe, our deficit wouldn't be so high.
If I were in charge (and these people better be glad I'm not) they'd be paying 60% and dealing with it.
you kidding? would you start a business knowing that for every dollar you earned 60 cents are taken away by the tax man?
 
#12 ·
Quote:
Originally Posted by Proxyep View Post

you kidding? would you start a business knowing that for every dollar you earned 60 cents are taken away by the tax man?
Tax percentages are figured by income amounts, as always. A starting business wouldn't net $26 billion a year. Apple is most definitely not a starting business. My tax table would be progressive but much higher than current rates on the top end - in that if you make less, you pay less (and none at all if below a certain amount), but if you make a crapload, you pay a crapload. Hence, only the largest and wealthiest of the megacorps would be paying 60%. The current rate of ~40%(?) is too low for the top end, and currently it's being skirted by lenient laws anyway.
 
#14 ·
Well since I have a job and pay taxes I know that current government just paints this horrible image of business and taxes the hell out of them. It's a legal business move. So honestly if everyone here had a company and they knew they could completely evade income tax, why wouldn't you do that. And it's legal.
- chmodlabs
 
#15 ·
Quote:
Originally Posted by MasterFire View Post

Did they seriously put the Netherlands in that list? Because that is absolute crockery, no way they've set up shop here for the tax advantage, because there isn't any whatsoever.
You don't know your legal and tax system very well then. Lots of european and american companies and eventually others, have some sort of legal presence in the Netherlands in order to pay less taxes.
 
#19 ·
Quote:
Originally Posted by Malcolm View Post

Tax percentages are figured by income amounts, as always. A starting business wouldn't net $26 billion a year. Apple is most definitely not a starting business. My tax table would be progressive but much higher than current rates on the top end - in that if you make less, you pay less (and none at all if below a certain amount), but if you make a crapload, you pay a crapload. Hence, only the largest and wealthiest of the megacorps would be paying 60%. The current rate of ~40%(?) is too low for the top end, and currently it's being skirted by lenient laws anyway.
I'm guessing you don't know anything about economics.

You hinder economic growth by overly taxing business/corporations. If you were smart you'd realize lowering taxes on corporate America is overall better for the economy.
 
#20 ·
Quote:
Originally Posted by JCG View Post

It's not Apple's fault the loophole exists. They found it exists, so they used it to their advantage. Just like anyone else would. Nothing new here ..
rolleyes.gif


/flameshield:ON
This, 100x over. The issue is these 'loopholes' are never fixed, therefore allowing this crap to continue. I wish we had a real statistic, one that showed how much money the US is losing to say the 100 most profitable countries in the US by them skirting taxes.
 
#21 ·
Quote:
Originally Posted by Al plants Corn View Post

I'm guessing you don't know anything about economics.
You hinder economic growth by overly taxing business/corporations. If you were smart you'd realize lowering taxes on corporate America is overall better for the economy.
LOL, clearly...given that the US currently has among the world's lowest corporate tax rates and yet we're in such a marvelous economic situation right now
rolleyes.gif


The failure of trickle-down economics in benefiting anyone but the corporations themselves has been made fairly obvious in recent years, especially over the last decade. I'm honestly surprised people still buy into this "taxes are bad for the economy" nonsense after all the damage done by trickle-down. Historically, the top tax rate was much higher (in the 1970s and previous).

Please explain how taxing Apple at a rate of 60% (assuming $26 billion in profit, leaving them with a paltry $15,600,000,000) would be bad for the economy. You do realize lower taxes = lower tax revenue and increased deficit, right?
 
#22 ·
sad, those taxes help to pay for the roads and infastruture that gets those items on store shelfs. There should be laws in place that curb this practice. If only we could set up a one room shop in some no tax state and never pay a penny in taxes again.... im sure someone would put a stop to that instantly. Guess that $5 left over on my pay does not grease enough palms to allow the average joe this right
rolleyes.gif
 
#24 ·
Quote:
Originally Posted by JCG View Post

It's not Apple's fault the loophole exists. They found it exists, so they used it to their advantage. Just like anyone else would. Nothing new here ..
rolleyes.gif


/flameshield:ON
I'd wager most of us use tax loopholes ourselves. Technically, if someone doesn't keep track of every dollar spent online that doesn't have state sales tax applied, they are exploiting the inability for the state to track that sale for taxes, unless they voluntarily report it. IIRC it's illegal in every state that has sales tax to not track and report online purchases, and then pay sales tax on them. If someone is not doing this, then I don't think they have a right to bash Apple for legally avoiding paying a tax. With every other business doing it, it would be a stupid move on Apple's part to disadvantage themselves like that. I'm not saying that what they are doing is right, but rather it is natural given the tax environment. If a state wants to jack up corporate tax rates, why should the corporation not relocate to where they are lesser? When my home city raised property taxes, many people relocated to just outside city limits, which put the city in a worse off position then it was before they raised them.
 
#26 ·
Quote:
Originally Posted by Dronac View Post

IIRC it's illegal in every state that has sales tax to not track and report online purchases, and then pay sales tax on them. If someone is not doing this, then I don't think they have a right to bash Apple for legally avoiding paying a tax.
Surprise surprise, I'm sure this relates to 99.9% of people on OCN.

However since the article is related to Apple being "shady", every PC fanboy here gets a little tingle in their pants and posts crap like "Another reason to hate Apple" (even though those people are most likely exploiting the tax system just like Apple is).

Oh the irony.
 
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