Apple is currently holding $181 billion overseas
theintercept.com
theintercept.com
If by "refuse to pay your taxes" you mean "refuse to pay tax on the portion of your income that you have the legal ability to not pay tax on", then yes, that is pretty great. I and many others do that on a regular basis.
If the tax department wants a company to pay more tax, it has two options: 1. legally require them to, 2. convince them that there is some other reason to. A great way to achieve option 2 is to threaten them with option 1.
Right now there's an extended negotiation happening between Apple (and friends) and the government, where both parties sure would like to avoid a whole bunch of new onerous legislation, and it would appear Tim Cook is describing the situation under which Apple would be willing to come to terms.
If there's no deal I'm sure the resulting new laws will be a huge nightmare for everyone involved, so both parties have an incentive to negotiate pretty hard without actually backing away from the table. It's an interesting look at what happens when you're a big enough company to negotiate with the government.
Not sure what all the bleating in this article is about though. You pay the tax you have to pay and no more. Has the author ever filed a tax return? Does he pay more than his required amount of tax out of a sense of patriotic duty? If not, I find this framing pretty deceptive. Nobody's giving gifts to the tax department.
- Apple makes money in the US and because of various tax loopholes, does not pay corporate taxes for those revenues
What happens in reality:
- Apple makes money in many different countries and pays corporate taxes in each of them (including the US), but if AFTER paying taxes (for example in an European country) they want to bring back some of that already taxed money to the US, they have to pay an additional ~40% in taxes.
Think of it this way, you as an employee go to work for one year in a European country. There you pay all your taxes and after that year you want to return to the US, but now the US decides you need to also pay income taxes in the US for your salary in Belgium.
Except this isn't what is happening. In Europe at least they practice the double Irish [0]. So effectively the stash we're talking about haven't been taxed yet.
Actually, the US does tax its citizens income whereever they are on the planet (past a certain threshold earned): http://www.expatinfodesk.com/expat-guide/nationality-specifi...
And please, when Apple (or Google) post losses in Spain and they take fiscal benefits because of this, it is not a totally correct claim the one about Apple and others paying taxes on Europe
[0]: http://www.out-law.com/en/articles/2014/september/european-c...
In that interview Mr. Cook says "We’ve said at 40 percent, we’re not going to bring it back until there’s a fair rate."
I wonder what he considers a fair rate?
We're not. The "Double Irish", "Dutch Sandwich" and other arrangements are about funneling the maximum possible amount of revenue through subsidiaries which can do tax-free or tax-deductible payments and transfers to each other, until finally the money ends up on the books of a company whose tax residency is Bermuda or the Cayman Islands, both of which have no corporate income tax.
As of a few years ago, it was reported that Google had gotten so good at this that 99.8% of their revenue outside the US was showing up in a subsidiary with Bermuda tax residency.
So that money wouldn't be "taxed twice" if brought into the US -- the whole point of the arrangement is that it hasn't even been taxed once yet.
Just like a Comcast monopoly in a small rural town the US government without competition would continue to soak up more money and spend it on increasingly useless things.
Meanwhile, if Apple wants to bring this money into the US, well, they can do what the US tells them to do when it comes to taxes. Apple has benefited enormously from services and infrastructure paid for by everyone else's taxes, and shouldn't get to leech off that without having to play by the same rules (and I say this as someone who pays a higher percentage of my own income in tax than Apple would even if it repatriated all its profits).
Overseas profits will end up paying for corporate infrastructure and jobs elsewhere, penalizing global activities by taxing profits which do not occur in the US is not a very forward thinking strategy for the US Government and it's why we will continue to get killed in trade with deficits until it obliterates our economy.
If those profits are never taxed, they won't. Of course, to avoid them being taxed you have to leave them sitting in accounts in Bermuda and the Caymans where that money can't be productive for the company either.
by taxing profits which do not occur in the US
The US isn't asking to tax their overseas profits. If you can't make your argument without openly lying about what's going on, I don't know how you can expect to be taken seriously.
Apple's actions seem pretty reasonable, if you worked and lived abroad as a US citizen would you be very happy if Uncle Sam reached into your back pocket for a cut of your income after paying into the local tax system? This is essentially what they are asking of Apple.. the US government should get a cut of transactions which never took place in the US.
The goverment wins because 20% of $181bn is way more than 40% of nothing, and Apple wins because they get to use the money within the US.
Partial amnesties for repratriation have been been done before, most recently in Greece as far as I know.
Cook is not saying Apple shouldn't pay taxes, he simply says the IRS has no business taking 40% of earnings not made in the US. If you were an expat you would strongly agree with him.
Otherwise, you're reading far too much into my comment. With the current tax rules as given, I merely suggested a possible compromise.
At no point did I argue for/against the rules, and at no point did I agree/disagree with what Cook is saying.