Apple Avoided Billions in Taxes, Congressional Panel Says
nytimes.com
nytimes.com
Apple evaded taxes? Now that's illegal.
I posted it on the story about the Google whistleblower, but I'll post it again here for posterity:
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes a public duty to pay more than the law demands." Judge Learned Hand in Helvering vs Gregory, 1934.
We were taught in school that avoiding taxes makes one a good accountant, evading them lands you in Levenworth. (I'm a CPA in Texas)
http://en.wikipedia.org/wiki/United_States_Penitentiary,_Lea...
Yes, yes there is. The quotes of a single person do not change this fact. The greatest good for the greatest number is achieved through the state. Witholding taxes for the purposes of greed is immoral and unpatriotic.
When it comes to taxes, I believe everyone can, and will, do everything they can to avoid paying taxes they don't believe they owe. If you want people to pay more taxes, tell them to pay more taxes by changing the law; it's unrealistic to imagine anyone voluntarily contributing more to the state than necessary.
But we're not discussing historically. We're discussing modern first world economies where the poor have been incessantly squeezed by 'free market' ideology. The NHS is a refreshing example of how to do things right.
Yes, let's ignore the past because it doesn't fit our current narrative of the future.
My main disagreement is your assertion that your opinion is fact.
Could you please explain how funding the NHS, a system helping millions and costing less than the average American already pays in taxes, is somehow immoral or wrong or warned against by history?
Can you suggest some strict lessons that show how the NHS can't possibly exist as it does?
I am not going to answer a strawman attack; the NHS is not what we're discussing and has little to do with the topic at hand. You can't just suggest one federal agency thats performing well as indicative of all money that goes to the government being well-spent.
Your position was that money given to the government is invariably good, my position is that your statement is a bit of a reach at best and ridiculous at worst. Your response is to cite one particular organization that has performed well which does nothing to validate or refute my argument.
In short, no straw men please.
> the NHS is not what we're discussing and has little to do with the topic at hand. You can't just suggest one federal agency thats performing well as indicative of all money that goes to the government being well-spent
So I can't point out a historic success story to bolster my point, but you can point out historic failures to bolster yours? It seems like you're stacking the deck in your favour there.
> Your position was that money given to the government is invariably good, my position is that your statement is a bit of a reach at best and ridiculous at worst
That was not my position. In the US or the UK, the government is the ideal means to reduce suffering as they already have programs doing just this that are short on funding.
On Mars, or in Africa, or in the 1840s this perhaps would not be true. It is however true now.
Once again, not what I said sir. I said you can't pick out one specific agency to validate your catch-all theory. You didn't say "Giving money to the government is sometimes good", you said "The greatest good for the greatest number is achieved through the state. Witholding taxes for the purposes of greed is immoral and unpatriotic." That's wrong if I can find a single counter example. The same isn't true of my position.
Your supposition that the government is ideal is only true in places where corruption and bureaucracy don't reign supreme. This is not the world we live in.
I am not arguing that Government cannot do good, I am arguing that government does not invariably do good, as your quote would suggest. Do you understand that you are attacking a position I did not carve out? I didn't say all government is bad, I said some government can be bad. YOU said government is invariably good which I can prove is false with a single example. The converse argument is not true.
Does that make sense?
Edit: To be specific, it is the dogmatic way in which you state your position that makes it difficult to accept. If you would back off just slightly and say that Government MAY be the best allocation of money, I could agree, but there's no way that the government is invariably the best distribution method for the public good. One need only look to Zimbabwe or even China to understand the error of this logic.
It's true my statement was brief, but I have made that position more clear. It's not that government is always good, but in the present UK and US situations, the state funds a number of support programs which are horrendously underfunded.
I don't think any reasonable person could justify cutting social benefits or healthcare coverage, and so my position outlines itself.
Good programs like these should be funded until poverty is eliminated. There's plenty of money around to do it and Apple having $55b instead of $50b in investments would change nothing for them, and everything for hundreds of thousands of poor people.
Plenty of people have very convincing arguments for doing both. More to the point though, many who argue at cutting those types of services at the federal level aren't necessarily insisting that they should be cut altogether (though obviously there are those that do).
My personal belief is that the federal government is the American federal government is the least efficient possible organization you can give your money to, for any reason. I would feel much more comfortable paying that money directly to charity (of which I donate considerably to, also which don't include loans to my friends, which by the way aren't tax deductible either way), or failing that, would rather pay it into a state funded initiative, where the dollars will be kept closer to home and be more efficiently spent according to the needs of the state. Obviously this works better in small states like Maryland than larger ones like California or Texas, but it still allows them more control to exercise than something handed down from the federal government.
We do need government, but we only need it for things the rest of society isn't going to do independently. Getting the government involved in something the rest of us are perfectly capable of doing ourselves isn't patriotism, it's lighting money on fire.
The NHS is one of the most efficient health care systems in the world and costs less than the average US citizen already pays in medical taxation. It was one of the world's largest employers too.
The UK government has recently started trying to split this up into smaller private groups. Everything has failed miserably, private companies have stripped the poor of benefits to force them into work with no success.
I'm not saying the state is the ONLY way to go, but it's a uniquely American belief that people should help themselves and maybe each other, but not all working together.
I will say that civil society is far, far more varied than the either/or choice of the individual acting alone or the entire nation acting together through the government. Local communities, associations, congregations, and yes, even businesses have important roles to play and can respond far more effectively to local conditions than an administrative state.
I can't speak to your experiences with the NHS, since I've got limited experience with England. I hope that it treats you better than my grandparents have been treated by the analogous system in Canada.
Potentially yes, nobody (at least, not me) is denying this, but when you're looking at how to do the greatest good for the greatest number, paying taxes goes a long way towards that. It builds roads, it cleans water, it provides healthcare, it protects the helpless.
These are real things the government does everyday, and while private charities do help, they are a stopgap.
I think we largely agree on the role of government and we only end up disagreeing on whether any one particular policy, enacted by the government, would really end up doing the 'greatest good for the greatest number' when weighed against the efficacy of the private sector / costs of the taxation to the taxpayers.
Since I believe in many cases the government, while well-meaning, does more harm than good, I really don't see how expanding the government through additional taxes can be considered patriotic. If you think the government only rarely does more harm than good, I can see how you'd have the opposite opinion.
Please highlight the total sum of things you expect to do harm, and the total sum of things you expect to do good. It's my belief that it's a very small proportion.
Then why doesn't North Korea have the highest standards of living?
In reality, the huge increases in standards of living in the past century has been due to incredible technological progress driven by free enterprise and "greed".
Because North Korea has made no attempt to pursue "The greatest good for the greatest number". Difference between "necessary" and "sufficient", and all that.
Citation needed. Trickle down economics has been roundly disproven again and again. Yes the rich do want to get richer, but so does everybody. The state pays for an AWFUL lot of scientific research already and I would much rather put another billion into NASA than into research on how to lie in advertising to sell hair cream more effectively.
That was all rhetorical. My real question: do you honestly believe the government made that all happen? Mostly happen?
Because the answer is no. You fly in planes because people were free to invest in and create airlines. You watch television because someone had the ingenuity to broadcast, receive, and display moving pictures, and other people were free to use this idea and freely pursue the enterprise of creating television and content to display on it. Etc. etc.
If by chance you do not, in fact, do this, then may I direct your attention to this page, where you may voluntarily contribute as much money as you want to the Treasury, for the purposes of reducing the public debt: http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
I can make some additional contributions but it's quite tough over here.
Private charity ≠ the state. You should re-allocate your resources as per your statement in order to achieve the greatest good.
Donating a chunk of that money, potentially up to 100% minus expenses is an extremely moral thing to do. The best option for that money is generally the state.
There's nothing wrong with charitable giving on top of taxation. It can't replace it though.
If the state is the best way to allocate resources - it should follow that you're sending all your resources to the state (so it's best allocated). You'd do this through taxation - not donation.
If you're giving money through private charity - then you obviously have SOME resources that you haven't given over to the state - which means that you're spending them (according to your own definition) less than optimally.
Unfortunately (for you), paying less taxes does not actually preclude you from giving more to charitable causes to help some of these moral outrages you suggest. By some studies, the U.S. is the most charitable country in the world [1] - which seems to be the opposite of your previous assertion that people aren't paying taxes because of "greed" (if that were the case, we certainly wouldn't be giving it away to charity either.
You're also not taking into account the parties to whom that money is donated (giving away money for the sake of giving it away isn't necessarily moral - what if you gave it to a terrorism org, etc) OR how those parties use said donation - which all would affect the "morality" of your action.
However, given your discussion throughout this thread, I doubt you actually desire to have a serious discussion and are content to incite reactions from people by painting these issues in broad & overly-generalized strokes.
[1] http://www.huffingtonpost.com/2011/12/19/world-giving-index-...
If you're expecting your money back, it's not charity. It's just a loan.
Governments and large organizations has it. You do not.
The point of capitalism is that this is not true in the general case.
It might be the case that under every moral theory[1] people have an obligation to avoid minimizing their taxes, but as it stands you are begging the question that we should all be utilitarians.
[1]: http://www.trinity.edu/cbrown/intro/ethical_theories.html
I've said it a million times, complaining about tax avoidance is akin to calling me a cheater for putting a '1' in the 'ones' column while playing Yahtzee. If I roll bunk, and it's fairly early in the game, I have the option of either putting a low value in the ones column (smart, as the max value there is 4), wasting the bonus (dumber, as the max value there is ... uhhh, I dunno, let's say 35 or so), or scratching out the Yahtzee (debatable either way). I am certainly not obligated to scratch the fours column if I was hoping to roll a high number of fours, and am perfectly justified in choosing whichever option suits me best, and that kind of good decision-making prowess is kind of the point of the game, if you ignore all the other random dice-rolling bits.
Actual cheating on taxes looks more like turning my dice over to show all sixes, when I obviously rolled something different.
Complaining about someone who played by the rules and made smart choices just seems naive, to me, but in an era where we voted in the guy who promised to tax the rich to pay for the government's bad choices, I suppose it's what we all deserve.
There is a lot of crap in the tax code (accelerated depreciation schedules for farm equipment and whatnot), but that's not what is at play here.
Of course, whoever is tasked with brokering and approving these agreements usually has a stake in that same game, either directly or indirectly (through revolving-door opportunities later on).
Note that this is not an American problem, it's a global problem. At the moment you either do it like China (you can't move any money out of the country) or you do it like US/Europe (your government gets shortchanged). This is clearly suboptimal.
Fact: "Investigators have not accused Apple of breaking any laws, and the company is hardly the only American multinational to face scrutiny for using complex corporate structures and tax havens to sidestep taxes."
NY Times going for another Pulitzer.
I don't see the headline as inaccurate at all; if anything, I figured that it is common knowledge that Apple intentionally avoids billions in taxes.
/shocker
Breaking News: America lacking social care facilities of other first world nations. Personal greed and lack of social conscience confirmed factors. No self awareness in sight.
Apple minimising the tax they pay has nothing to do with funding of social causes.
The Tories' desire to privatise the NHS has nothing whatsoever to do with Apple's tax bill.
Please stop hijacking this discussion.
In theory, that works great, but given the track record of various government programs, I'd suggest that it's not a 1:1 ratio.
I'd argue, the matter is a lack of trust in the government to allocate money wisely rather than a prevalence of greed among people who'd rather watch the world burn than pay another cent to the government.
Who would you trust more? A group of people formed explicitly to help others, with no profit motive and less fear of job loss or a group formed to make profit, organised around a profit motive?
Yeah it's not perfect and there's all sorts of fraud and corruption that goes on, but I'll take the NHS any day over the US health system, and so would almost everyone here.
The health care system is already broken in this nation because Congress broke it through wage regulation in the 40s. That same government has now professed that they want to fix it by adding more of what broke it in the first place. I think that the Affordable Care Act has some good parts to it, and hopefully it will at least work at an economy of scale to mitigate the additional layer of pay abstraction that broke it in the first place, but by no means do I think that it will fix the more recent problems it has created.
However, it should be troubling that
1. Deception is considered excusable and that Companies care little about ethics and break the spirit of tax laws (if not the letter).
Redirecting US profits or European profits to other unrelated countries (on paper) and then claiming tax exemption clearly indicates deception. If they made their money in the US and claim that all of this money belongs to a subsidiary in Bermuda, that should be a matter of concern to everyone (regardless of whether this deception is legal or not)
2. It is true that many companies indulge in this type of deception and defend it as "legal" Often, it is the companies (through their lobbyists) who created these legalities. So it is disingenuous to defend their practices as legal. Obviously, Microsoft, Google and other large companies do the same (or similar) things. However, that doesn't do much to dispel the fact that each company engages in deception.
>Apple complies fully with both the laws and spirit of the laws. And Apple pays all its required taxes, both in this country and abroad.
>Apple wants to make clear to the Subcommittee that the Company does not use its Irish subsidiaries or any other entities to engage in the following tax practices that were the focus of the Subcommittee’s September 20, 2012 hearing, entitled Offshore Profit Shifting and the US Tax Code. Specifically, Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US to avoid US tax, nor does it use revolving loans from CFCs to fund its domestic operations. Apple does not hold money on a Caribbean island, does not have a bank account in the Cayman Islands, and does not move any taxable revenue from sales to US customers to other jurisdictions in order to avoid US taxation.
Sure, it may be perfectly legal according to the law, but it seems grossly unfair. One of the premises of our tax system is that the well off shoulder a larger burden then those who earn less (for better or worse - I think for the better). But the people who don't earn as much cannot afford to spend millions of dollars on accountants to reduce their tax bills like this.
If everybody wants to work in a functioning society, where essential services are funded by the government, then there needs to be income. Everybody who can contribute, and should do their bit.
Source: my schooling. (CPA in Texas).
Repatriation holiday: http://thinkprogress.org/economy/2011/05/14/173951/repatriat...
edit: example - The administration estimates closing these Big Oil tax loopholes would save "approximately $4 billion per year in tax subsidies to oil, gas, and other fossil fuel producers."
http://www.americanprogress.org/issues/green/news/2011/01/31...
If your tax laws are full of loopholes, start by fixing them.
If it got so complicated that loopholes can't be avoided, try simplifying them.
Ranting about companies exploiting loopholes make no sense. But then, it's politics. So, I guess it's not meant to make sense..
I know individual American citizens are required to report on all income to the IRS, no matter where it is earned, no matter if they have ever set foot in the United States in their life. Failure to file is a serious offense.
Does US corporate tax law require the same?
"Apple wants to make clear to the Subcommittee that the Company does not use its Irish subsidiaries or any other entities to engage in the following tax practices that were the focus of the Subcommittee’s September 20, 2012 hearing, entitled Offshore Profit Shifting and the US Tax Code. Specifically, Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US to avoid US tax, nor does it use revolving loans from CFCs to fund its domestic operations. Apple does not hold money on a Caribbean island, does not have a bank account in the Cayman Islands, and does not move any taxable revenue from sales to US customers to other jurisdictions in order to avoid US taxation."
Wait, this isn't breaking news.
> ...Apple Operations International, which is incorporated in Ireland but keeps its bank accounts and records in the United States, and holds board meetings in California. Because the United States bases residency on where companies are incorporated, while Ireland focuses on where they are managed and controlled, Apple Operations International was able to fall neatly between the cracks of the two countries’ jurisdiction.
This is amazing, and awfully clever. A "stateless" corporation? Is this a common thing?
The NYT appears to be (somewhat clumsily) describing the "Double Irish" strategy. It is incredibly common. A large number of big companies are structured this way (among them, Google, Microsoft, Facebook, Eli Lilly, Pfizer, Adobe,...
Whats up with the Countermeasures section lol.
"General Electric Paid No Federal Taxes in 2010"
http://abcnews.go.com/Politics/general-electric-paid-federal...
"GE's CEO, Jeff Immelt Heads Obama's Council On Jobs And Competitiveness"
http://www.huffingtonpost.com/2011/01/21/jeffrey-immelt-coun...
"Former Google Exec Turns Whistleblower On Company’s Tax Avoidance Machinations In The UK"
http://techcrunch.com/2013/05/19/former-google-exec-turns-wh...