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NY Times Apple Tax Article Flawed

timothy posted more than 2 years ago | from the you-forgot-to-carry-the-one dept.

Government 193

bonch writes "Forbes contributer Tim Worstall points out that the NY Times article claiming Apple pays less than 10 percent of its profit in taxes was based on a flawed assumption of the corporate tax system. The 9.8% figure came from Greenlining Institute, who compared Apple's 2011 profits to taxes calculated according to 2010 profits. In the corporate tax system, estimated quarterly tax payments are made based on the previous year's profits until actual profits are calculated at the end of the trading year, when the balance is then paid to the IRS."

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So what? (1, Insightful)

MrEricSir (398214) | more than 2 years ago | (#39958699)

Saying NYT made an incorrect calculation and explaining why is fine. But what was Apple's tax rate, then?

If you can't answer that, then you can't say the figure itself is incorrect, only the means used to arrive at it.

Re:So what? (0)

maccodemonkey (1438585) | more than 2 years ago | (#39958725)

Well, this is entirely a blind stab in the dark, but their profits approximately doubled over last year, so the actual rate may be twice what the NYT said.

Re:So what? (3, Insightful)

MoonBuggy (611105) | more than 2 years ago | (#39958729)

It's fair to say that the figure is pretty damn likely to be incorrect. But I quite agree, the Forbes article should've gone one step further and done the correct calculation for the 2010 data (since, by their assertions, it seems that 2011 data is not yet fully available).

Re:So what? (3, Informative)

alexander_686 (957440) | more than 2 years ago | (#39958887)

Apple's 2011 fiscal year end is September 2012. And I am sure they file extensions. So, no, we would not have the data yet.

Re:So what? (-1)

Anonymous Coward | more than 2 years ago | (#39958971)

Apple's 2011 tax rate is already available in its annual shareholder filing: 24.2%.

It would be really, really helpful if people would RTFA.

Re:So what? (1)

SirGarlon (845873) | more than 2 years ago | (#39958757)

Indeed. I tried to RTFA but there's no help there -- it is basically just a flame against NYT by a rival journalist. Based on TFA's headline we can't really trust said journalist to analyze the alleged error with calm and rational professionalism.

Found it (5, Informative)

SirGarlon (845873) | more than 2 years ago | (#39958791)

OK, so if you follow a link in TFA and manage not to balk at an even more inflammatory headline, you get to Mr. Worstall's claim that http://www.forbes.com/sites/timworstall/2012/04/18/apples-9-8-tax-rate-entirely-mind-gargling-nonsense/ [forbes.com] ">Apple paid approximately 24.2%, 24.4% and 31.8% for 2011, 2010 and 2009, respectively -- which doesn't really answer the question of what they paid in 2012 but does explain why a figure of 9.8% sounds unreasonable.

Re:Found it (-1, Flamebait)

smudj (1983234) | more than 2 years ago | (#39959013)

Those are EFFECTIVE tax rates, that means that Apple is not paying 24% of their total profits. Taxes are tiered, if you make $A, then you pay the X% tax rate, if you pay $A+$B, then you pay still pay the X% on A, and you pay the increased tax rate of Y% on $B, and so on up. The statement that "apple paid less than 10% of its profits" could be correct, assuming that the 10% is the total tax paid on Apple's total profit.

Re:Found it (1)

Anonymous Coward | more than 2 years ago | (#39959141)

You are confusing "effective" rate with "marginal" rate.

Re:Found it (4, Informative)

KhabaLox (1906148) | more than 2 years ago | (#39959187)

You don't understand what Effective Tax Rate is. It is the tax rate they paid on income, after taking into account the tiered nature of taxes you described (which is how it works for individuals - I'm not sure about corporations but I'll take you're word for it). Their highest marginal rate therefore would have been higher than the 24% (and their lowest would have been lower).

Re:Found it (2)

alexander_686 (957440) | more than 2 years ago | (#39959287)

I am not sure that I am following you.

The above numbers are Apple “Effective” (I would use actually) tax rates. Apple had 33.8b operating income and paid 8.3b in taxes, or 24%. So we know that.

I think you are trying to say is that we don’t know Apple’s marginal tax rate. Which is true, but I am not sure what you are trying to drive at. Tiered taxes means the more you make the higher your marginal tax should be. (I am making a generalization here. Apple works in a lot of different tax jurisdictions and I don’t know all of them). IIRC, the top US corporate tax tier starts at 18m, which means that about 99.95% of their income is in the top tier.

Since that is basically a rounding error, I am not sure what your point is.

Re:Found it (3, Insightful)

Anonymous Coward | more than 2 years ago | (#39959127)

which doesn't really answer the question of what they paid in 2012.....

You're not going to get that number for a few more months, mate

Re:So what? (1)

medcalf (68293) | more than 2 years ago | (#39958771)

From memory, so could be wrong, Apple reports it's effective tax rate last year at about 24%.

Re:So what? (-1)

cpu6502 (1960974) | more than 2 years ago | (#39958969)

Corporate taxes should be higher. After all, they are rich.

Re:So what? (-1)

Anonymous Coward | more than 2 years ago | (#39959079)

I'd agree to that after we get the unproductive members of society off of the government teat. Get those welfare bitches in the ghettos and trailer parks to work or let their dead beat asses starve. Then we can talk about fair taxation.

Re:So what? (1, Troll)

Surt (22457) | more than 2 years ago | (#39959281)

Almost none of our taxes go to that as it is. The rate is something like 0.7%, and generally that money is targeted at the kids who are relatively innocent victims of those mothers, in the hope that they might turn things around in the next generation.

Re:So what? (3, Insightful)

flyingsquid (813711) | more than 2 years ago | (#39959709)

I'd agree to that after we get the unproductive members of society off of the government teat. Get those welfare bitches in the ghettos and trailer parks to work or let their dead beat asses starve. Then we can talk about fair taxation.

If we want to talk about who's leeching off the federal government, let's start by looking at it on a state-by-state level. The states that are most heavily subsidized by the government- the states that receive more federal dollars than they pay in income taxes- are almost entirely Republican-leaning states. So we have Democratic-leaning states like California, New York, and Massachussetts subsidizing Republican-leaning states like Alabama, Alaska, and West Virginia.

In effect, the Republicans seem to have been able to engineer things so that there's a redistribution of wealth from high-earning Democratic states to low-earning Republican states. Sounds a lot like socialism to me. It seems like the Republicans are, when you get down to it, perfectly fine with receiving government handouts, they just don't like to see other people get any help.

Re:So what? (5, Informative)

mehtajr (718558) | more than 2 years ago | (#39958777)

According to their 10K filing with the SEC: "The Company’s effective tax rates were approximately 24.2%, 24.4% and 31.8% for 2011, 2010 and 2009, respectively."

Re:So what? (1)

gl4ss (559668) | more than 2 years ago | (#39958963)

yeah but does that take into cash moved to holding to wherever? which should be the main point anyhow?

it wouldn't be a story at all to report sec filings..

Re:So what? (0)

Anonymous Coward | more than 2 years ago | (#39959189)

I think the point is the NYT was trying to make a story out of nothing.

Re:So what? (1)

alexander_686 (957440) | more than 2 years ago | (#39959381)

Yes. Apple earned 33.8b and paid 8.3b in taxes. Not neccessarly to the US goverment however.

And I wish people would stop talking about “offshore” holdings without talking about territorial tax rates.

In most countries corporate taxes are charged on income earned in that country. Income earned from offshore subsidiaries are not – because their offshore subsidiaries were charged the local corporate tax rate.

The US is one of the few places where US companies have to pay income earned overseas when it brought back onshore. Which means the same income is taxed twice. Back in the 70s ,when the US tax rate was over 50%, if the foreign countries’ tax rate was over 50%, could mean a tax rate of over 100%.

So, in order to keep our odd tax system, Congress carved out a whole host of expectations. It’s just a big mess.

Re:So what? (0)

Anonymous Coward | more than 2 years ago | (#39959547)

Back in the 70s ,when the US tax rate was over 50%, if the foreign countries’ tax rate was over 50%, could mean a tax rate of over 100%.

So, if I sold you an apple, I also paid you an apple? Huh?

A tax rate equal to, or over 100% would mean no profit could ever be made. A tax rate approaching 100% could mean a profit of .01% or more could be made.

I'm quite sure no company paid 100% of their net income to taxation. I'm willing to bet my sweet mortal life that exactly zero of them paid a premium for doing business with a profit margin that always equaled a net loss.

I swear, nerds are losing their ability to do math, provide citations to erroneous claims, or perhaps both :(

Re:So what? (1)

alexander_686 (957440) | more than 2 years ago | (#39959647)

Sigh, no Congress - not Nerds,

So, prior to a company being hit with over a 100% tax rate, companies lobbied for loopholes, expections, bilateral tax treaties, etc. so the resulting system is a patchwork of loopholes. The only good thing about I can see from it is that I get a job out of it.

One of the expectations is that profits generated overseas would not be taxed if it were reinvested in the overseas operations. Which is lovely. Discourages US companies from bring back profits to reinvest in the US. Sigh.

And tax holidays are not a fix. The last one they tried returned a lot of money but little reinvestment.

Re:So what? (1)

alexander_686 (957440) | more than 2 years ago | (#39958827)

No, but you can say it is really low. What Worstall is saying is that the NY times was using 2010 tax payments (calculated on 14b of profits) on 2011 profits (of 26b).

While the odd U.S. tax rules on territorial income (We should really join how the rest of the world does it) plus special circumstances (None that I know of, but..) will make it hard to make direct comparisons.

However, NY is assuming that a 85% increase in profits would not result in a higher tax bill. I would make the assumption (which is safer) that Apple’s taxes would be higher the next year.

Of course I am getting this info from Apple’s financial statements. And, as I know too well, financial statements to the SEC and the IRS are prepared with very different assumptions.

Re:So what? (3, Informative)

Overly Critical Guy (663429) | more than 2 years ago | (#39958833)

Saying NYT made an incorrect calculation and explaining why is fine. But what was Apple's tax rate, then?

We won't know until the actual profits are calculated at the end of the trading year, when Apple pays the remaining balance.

If you can't answer that, then you can't say the figure itself is incorrect, only the means used to arrive at it.

What?! Yes, you can. Because it was derived from 2010's, it doesn't reflect what Apple's actual tax rate will be for its 2011 profits, which were much higher than 2010's. Therefore, the figure is totally useless.

Re:So what? (1)

ZeroSumHappiness (1710320) | more than 2 years ago | (#39958881)

What he's saying is that if I claim Apple's tax rate was 208% because I'm assuming they paid $2.08 in taxes but only had $1 in profits you don't know that the final figure I came up with (208%) is wrong because through some obscene coincidence it could come to pass that Apple pays 208% in taxes. What you do know is that my calculation used really stupid inputs so my methodology is almost undoubtedly incorrect.

Not totally useless. (1)

HornWumpus (783565) | more than 2 years ago | (#39959317)

Very useful if you are trying to tell a story. NYT so I have no doubt this was deliberate propaganda.

Re:So what? (0)

Anonymous Coward | more than 2 years ago | (#39959535)

bonch, you submitted this article.

Why are you commenting about it under another account?

Re:So what? (0)

Dan667 (564390) | more than 2 years ago | (#39958915)

a large part of the problem is not what they are taxed on for profit, it is what they are allowed to write off that makes absolutely no sense unless you are a rich upper level executive (ex airplanes)

Apple has already reported its tax rates (0)

Anonymous Coward | more than 2 years ago | (#39958921)

Saying NYT made an incorrect calculation and explaining why is fine. But what was Apple's tax rate, then?

If you can't answer that, then you can't say the figure itself is incorrect, only the means used to arrive at it.

Are people dense today?

Apple's effective tax rates were approximately 24.2%, 24.4% and 31.8% for 2011, 2010 and 2009, respectively. Apple is a public company, remember? They report these things [shareholder.com] to their shareholders annually.

How did your post get +5 Insightful? Apple's report is linked right in the article!

Re:Apple has already reported its tax rates (-1, Flamebait)

smudj (1983234) | more than 2 years ago | (#39959043)

those are effective taxes, not the total percent they paid based on their profits. Do you understand what an "effective" tax rate is? An effective tax rate of 24% is not 24% of their total profit.

Re:Apple has already reported its tax rates (2)

KhabaLox (1906148) | more than 2 years ago | (#39959233)

those are effective taxes, not the total percent they paid based on their profits. Do you understand what an "effective" tax rate is? An effective tax rate of 24% is not 24% of their total profit.

Do you? No, you don't. [investopedia.com]

Re:Apple has already reported its tax rates (1)

Surt (22457) | more than 2 years ago | (#39959371)

That's actually the definition of effective tax rate. total taxes paid / total profit. It exists specifically to clarify the actual rate of tax paid after factoring in profit shifting, exemptions, progressive rates, etc.

 

Re:Apple has already reported its tax rates (1)

bws111 (1216812) | more than 2 years ago | (#39959609)

Hmm, he put effective in quotes. Must mean something important. Let's see, what does effective mean - "actual; not merely potential or theoretical". So, in other words, an "effective" tax rate of 24% is ACTUALLY 24% of their profit.

Re:So what? (0)

Anonymous Coward | more than 2 years ago | (#39958951)

The story was posted by bonch, a professional shill which is paid to astroturf for Apple and other corporations. What did you expect?

Wacky Slashdot logic (1)

Anonymous Coward | more than 2 years ago | (#39959041)

If you can't answer that, then you can't say the figure itself is incorrect, only the means used to arrive at it.

What the hell? If the means used to arrive at a figure is wrong, then the figure is wrong. What kind of ass-backwards logic is this, where the figure can still be right even if the means used to calculate the figure is wrong...? Seriously, that's one of the weirdest, dumbest things I've ever seen.

Apple already reports its tax rates in its shareholder filings. Their 2011 tax rate was 24.2%.

Re:Wacky Slashdot logic (1)

narcc (412956) | more than 2 years ago | (#39959255)

What the hell? If the means used to arrive at a figure is wrong, then the figure is wrong.

No. The figure could still very well be correct, even if it was generated randomly. A stopped watch will accurately report the time twice a day, you know.

Re:So what? (1)

roman_mir (125474) | more than 2 years ago | (#39959199)

If Apple is forced to pay any income taxes and their effective rate is over 0%, then it is too much, and it's not only true for Apple either, it's for everybody.

Re:So what? (0)

Anonymous Coward | more than 2 years ago | (#39959267)

4/10. You can do better, roman_mir. No mention of governments and lethal force and coercion?

Re:So what? (0)

Anonymous Coward | more than 2 years ago | (#39959297)

Grover? Is that you?

Hey, here's an idea; go live in a lawless freemarket society with no public streets or other infrastructure, where people die if they run out of luck for a day or two, and you can take as much from other people as you have the naked power to do so.

Let us know how that works out for you.

Re:So what? (1)

roman_mir (125474) | more than 2 years ago | (#39959373)

Shilling for government much? It is of-course NONSENSE that a nation without INCOME TAXES is a nation without public streets, without other infrastructure, without even laws.

How in the world was USA surviving and thriving before income taxes were introduced I wonder? How in the world was the productivity going up, production and consumption going up and all those cities were being built, roads, etc., and no income taxes?

Must have been 'naked power'.

Re:So what? (1)

BasilBrush (643681) | more than 2 years ago | (#39959353)

Saying NYT made an incorrect calculation and explaining why is fine. But what was Apple's tax rate, then?
If you can't answer that, then you can't say the figure itself is incorrect, only the means used to arrive at it.

Anyone can answer that very easily. It's in the 10K.

24.2%, 24.4% and 31.8% for 2011, 2010 and 2009, respectively.

Even without looking that the 10K you could have said NYT was wrong. Apple is in huge growth. Their revenue for each year is far more than the year before. So unless you match revenue year and tax year correctly you're bound to get a massively wrong number.

Color me not surprised. (1, Interesting)

PaddyM (45763) | more than 2 years ago | (#39958703)

Lately, I've seen lots of tabloid-esque headlines at Forbes supposedly drumming up controversy. I read the article and realize I was trolled. I think that magazine is not going to be around much longer.

Re:Color me not surprised. (1, Interesting)

MickyTheIdiot (1032226) | more than 2 years ago | (#39958739)

Much like CNN and Fox News, it's now an opinion organ. That's the state of factual reporting in the U.S.

Re:Color me not surprised. (1)

khipu (2511498) | more than 2 years ago | (#39958867)

That's the state of factual reporting in the U.S

... and internationally as well, for that matter, or do you really think that the small cabal of European publishers and "public" media is any more factual?

Re:Color me not surprised. (0)

Anonymous Coward | more than 2 years ago | (#39959035)

That's the state of factual reporting in the U.S

... and internationally as well, for that matter, or do you really think that the small cabal of European publishers and "public" media is any more factual?

At least in the UK they have the guts to go after Fox news and their band of outright criminals using the "news" as nothing but a profit engine in an automobile of lawlessness and hubris. In the US, on the other hand, our courts stick to the motto of "Free speech is Free speech, even if it's wrong, and ESPECIALLY if it's profitable."

Re:Color me not surprised. (1)

ArsonSmith (13997) | more than 2 years ago | (#39959385)

Anything not in the US is correct and factual. The US is always wrong. Even when they are right, they are wrong. Come on you should know this by now.

Re:Color me not surprised. (2)

PaddyM (45763) | more than 2 years ago | (#39958745)

Aagh. I misread the summary. I guess I was wrong about Forbes this time.

So color me surprised.

Re:Color me not surprised. (1)

Tharsman (1364603) | more than 2 years ago | (#39958853)

Like the Weekly World News, once in a while, they do get lucky and print a real story.

Re:Color me not surprised. (0)

Anonymous Coward | more than 2 years ago | (#39958873)

Exactly. I'm still cheesed off by this one crazy article [forbes.com] by Steve Salzberg claiming that the University of Florida was shutting down its CS department. It was only asking them to teach more as this correction [forbes.com] makes clear. Yet why is the first one still available online?

These guys are the kings of trolling.

TOTALLY missing the point (0)

Sparticus789 (2625955) | more than 2 years ago | (#39958765)

Forbes didn't even read the original article. This doesn't apply at all to Apple putting business locations in other states like Nevada to avoid paying California taxes. This only addresses half of the issue, the Federal business tax rate that Apply pays.

Re:TOTALLY missing the point (1)

Overly Critical Guy (663429) | more than 2 years ago | (#39958849)

This doesn't apply at all to Apple putting business locations in other states like Nevada to avoid paying California taxes.

Yes, they do this. So what?

Re:TOTALLY missing the point (1)

Sparticus789 (2625955) | more than 2 years ago | (#39958967)

This doesn't apply at all to Apple putting business locations in other states like Nevada to avoid paying California taxes.

Yes, they do this. So what?

I don't care where their offices are. Every company does this. Just look at the DC area. Drive around the Maryland side and it's mostly trees, some buildings but not too many. Drive around the Virginia side and there's corporate headquarters after corporate headquarters. The difference? Taxes on personal income, businesses, and property is lower in Virginia.

I was only pointing out that if Forbes was hoping to make some sort of solid argument, they failed miserably by addressing half of the issue and ignoring the other half.

YOU didn't read the article (0)

Anonymous Coward | more than 2 years ago | (#39958885)

You didn't read the article. If you had, you'd have seen the link to Forbes' previous article on the alleged tax rate [forbes.com] , where it explains how Greenlining Institute's 9.8% figure takes into account the tax dodges you're talking about.

Whatever Apple's paying (0)

doston (2372830) | more than 2 years ago | (#39958767)

It's not nearly enough. These people (er i mean corporations) should be paying taxes just like other people. Last year I paid 28%. Sound good, Apple?

Re:Whatever Apple's paying (0)

Anonymous Coward | more than 2 years ago | (#39958875)

Cause you're stupid and don't know how to shelter money (and refuse to learn). Apple - not so much!!!

When I say Apple, I mean ANY corporation and when I say you, I mean ANY of the unwashed masses that just wanna drink beer, eat cheetos, watch porn and then wonder why their wang is orange.

Re:Whatever Apple's paying (2)

doston (2372830) | more than 2 years ago | (#39958933)

Cause you're stupid and don't know how to shelter money (and refuse to learn). Apple - not so much!!!

When I say Apple, I mean ANY corporation and when I say you, I mean ANY of the unwashed masses that just wanna drink beer, eat cheetos, watch porn and then wonder why their wang is orange.

Yeah, the person named Apple has billions in cash, teams of accountants and lawyers. Other "people", not so much. And btw, I can tell from your post that you're part of the "unwashed masses". Self hate much?

Re:Whatever Apple's paying (3, Insightful)

Dcnjoe60 (682885) | more than 2 years ago | (#39959217)

Cause you're stupid and don't know how to shelter money (and refuse to learn). Apple - not so much!!!

When I say Apple, I mean ANY corporation and when I say you, I mean ANY of the unwashed masses that just wanna drink beer, eat cheetos, watch porn and then wonder why their wang is orange.

Yeah, the person named Apple has billions in cash, teams of accountants and lawyers. Other "people", not so much. And btw, I can tell from your post that you're part of the "unwashed masses". Self hate much?

I am not part of the "unwashed masses" however, if the supreme court wants to rule that corporations are people and have the same rights, then why not tax them like people? People can deduct interest paid on their primary residence from taxes. Why not only allow corporations to deduct interest on their primary headquarters? People are limited on most deductions to a percentage of AGI. Why not the same thing for corporations?

If I am a small business, employing 150 people, why should I pay more in income tax as a sole proprietor or a partnership, where business income flows through and is taxed as personal income, than if I run the same business but structure it as a corporation? (I know all the reasons to form a corporation, so please don't respond in that way).

Corporations in America get far more state and federal "welfare" than people get. We just don't call it that. Maybe it's about time they pay their fare share, too.

Re:Whatever Apple's paying (1)

doston (2372830) | more than 2 years ago | (#39959253)

Cause you're stupid and don't know how to shelter money (and refuse to learn). Apple - not so much!!!

When I say Apple, I mean ANY corporation and when I say you, I mean ANY of the unwashed masses that just wanna drink beer, eat cheetos, watch porn and then wonder why their wang is orange.

Yeah, the person named Apple has billions in cash, teams of accountants and lawyers. Other "people", not so much. And btw, I can tell from your post that you're part of the "unwashed masses". Self hate much?

I am not part of the "unwashed masses" however, if the supreme court wants to rule that corporations are people and have the same rights, then why not tax them like people? People can deduct interest paid on their primary residence from taxes. Why not only allow corporations to deduct interest on their primary headquarters? People are limited on most deductions to a percentage of AGI. Why not the same thing for corporations?

If I am a small business, employing 150 people, why should I pay more in income tax as a sole proprietor or a partnership, where business income flows through and is taxed as personal income, than if I run the same business but structure it as a corporation? (I know all the reasons to form a corporation, so please don't respond in that way).

Corporations in America get far more state and federal "welfare" than people get. We just don't call it that. Maybe it's about time they pay their fare share, too.

The whole discussion's stupid for me, because I don't agree with the supreme court ruling on corporations being people, so why should i bother getting into a serious discussion on how they should be allowed further advantage? My original post was not a serious invitation to discuss how best to work within the confines of an incalculably stupid decision by the right wing supreme court.

Re:Whatever Apple's paying (4, Insightful)

khipu (2511498) | more than 2 years ago | (#39958943)

It's not nearly enough. These people (er i mean corporations) should be paying taxes just like other people. Last year I paid 28%. Sound good, Apple?

Why? That just encourages them to move more and more of their operations overseas because they can't stay competitive if the US charges them 28% but their competitors pay a fraction of that elsewhere.

Furthermore, corporations just have to raise prices, so in the end consumers pay for it. And they pay for it in a regressive way.

And assuming you work for a corporation, those 28% that "you" paid was actually paid by your employer, because that's where all your money comes from.

Corporations should pay taxes proportional to the costs they impose on the community. Most of those are imposed through labor, and that's covered by the income tax. If they impose additional costs, they should pay for it. But just trying to milk them because you can makes no sense and only hurts people.

Re:Whatever Apple's paying (1, Funny)

HarrySquatter (1698416) | more than 2 years ago | (#39959059)

Why make them pay taxes at all? Oh and we might as well repeal all worker safety and environmental laws so that the corporations aren't inconvenienced. Don't forget to' shutdown the SEC as well because having to try to accurately report information to investors is a terrible burden.

Re:Whatever Apple's paying (1)

Quiet_Desperation (858215) | more than 2 years ago | (#39959113)

You realize you went down this slippery straw slope all by your lonesome, right?

Re:Whatever Apple's paying (0)

doston (2372830) | more than 2 years ago | (#39959073)

It's not nearly enough. These people (er i mean corporations) should be paying taxes just like other people. Last year I paid 28%. Sound good, Apple?

Why? That just encourages them to move more and more of their operations overseas because they can't stay competitive if the US charges them 28% but their competitors pay a fraction of that elsewhere.

Furthermore, corporations just have to raise prices, so in the end consumers pay for it. And they pay for it in a regressive way.

And assuming you work for a corporation, those 28% that "you" paid was actually paid by your employer, because that's where all your money comes from.

Corporations should pay taxes proportional to the costs they impose on the community. Most of those are imposed through labor, and that's covered by the income tax. If they impose additional costs, they should pay for it. But just trying to milk them because you can makes no sense and only hurts people.

If you like the Wal-Mart economy approach...a shattered peasant class with little money buying cheap crap, then you're on the right track. What you prefer depends on who you are. Rich and corporations and those stupid enough to be indoctrinated by corporations (Teabaggers, Ron Paul, etc) want lower taxes on the rich and corporations or the same as everyone else pays. The rest (people who aren't living off of capital gains, educated people who aren't subject to corporate propaganda) would prefer a more progressive tax system. If people had more money...like say things were manufactured in the US again, they wouldn't mind paying $65 more for an iPhone. And since 28% is capital gains, that means you don't know if I'm getting my money from my employer and paying in that bracket or capital gains. The fact that you assume to know where my income comes from, shows that you're not a real disciplined thinker, but more the Teabagger type who makes emo assumptions based on limited information. You know, like how teabaggers seem to think they know how the global political and economic system work even though they barely got a HS diploma?

Re:Whatever Apple's paying (1)

Surt (22457) | more than 2 years ago | (#39959469)

I have serious doubts about whether any TEA party members have a HS diploma. Your claim to the contrary is unproven to the best of my knowledge.

Re:Whatever Apple's paying (1)

doston (2372830) | more than 2 years ago | (#39959533)

I have serious doubts about whether any TEA party members have a HS diploma. Your claim to the contrary is unproven to the best of my knowledge.

Was going to say 8th grade education, but isn't dropping out before 18 illegal or something?

Re:Whatever Apple's paying (1)

Surt (22457) | more than 2 years ago | (#39959595)

Well there's a significant criminal element involved there, of course.

Re:Whatever Apple's paying (3, Insightful)

oldspicepuresport (1551767) | more than 2 years ago | (#39959521)

If you like the Wal-Mart economy approach...a shattered peasant class with little money buying cheap crap, then you're on the right track. What you prefer depends on who you are. Rich and corporations and those stupid enough to be indoctrinated by corporations (Teabaggers, Ron Paul, etc) want lower taxes on the rich and corporations or the same as everyone else pays. The rest (people who aren't living off of capital gains, educated people who aren't subject to corporate propaganda) would prefer a more progressive tax system. If people had more money...like say things were manufactured in the US again, they wouldn't mind paying $65 more for an iPhone. And since 28% is capital gains, that means you don't know if I'm getting my money from my employer and paying in that bracket or capital gains. The fact that you assume to know where my income comes from, shows that you're not a real disciplined thinker, but more the Teabagger type who makes emo assumptions based on limited information. You know, like how teabaggers seem to think they know how the global political and economic system work even though they barely got a HS diploma?

Leaving aside all the immature rhetoric and petty name calling, your comment doesn't even make sense. The current system is obviously flawed, but you don't add to your credibility by rudely portraying an ill-thought out populist idealism.

In theory everything the OP said is 100% right on the money, in practice there are too many loopholes for it to function the way it should, but don't confuse the system's current disfunction with the capitalist system that has brought more wealth and more prosperity to an enormous amount of people than any other system in human history.

Corporate taxes are in theory meant to encourage reinvestment in a company, making it cheaper to reinvest than pay yourself. The problem is that it's possible (and totally legal) to do a huge number of things which effectively allow you to "pay" yourself at the corporate rate, like loaning yourself money from the corporation or buying yourself property and then leasing it to the corporation, etc. etc. etc. The solution is to ensure that if actual people take money from a corporation (they make a financial gain), that this money is taxed at a fair rate and then be done with it. People don't have problems with companies reinvesting in themselves (it's the reason I support low corporate tax rates in theory)... people have a problem with some rich jackass rigging the system to pay way less than his fair share of taxes. Tax code reform is the key, anyone going on about tax rates for the super rich clearly doesn't understand how the system works, they don't really care if you raise their taxes as they'll find a way around them anyway.

Re:Whatever Apple's paying (0)

doston (2372830) | more than 2 years ago | (#39959615)

If you like the Wal-Mart economy approach...a shattered peasant class with little money buying cheap crap, then you're on the right track. What you prefer depends on who you are. Rich and corporations and those stupid enough to be indoctrinated by corporations (Teabaggers, Ron Paul, etc) want lower taxes on the rich and corporations or the same as everyone else pays. The rest (people who aren't living off of capital gains, educated people who aren't subject to corporate propaganda) would prefer a more progressive tax system. If people had more money...like say things were manufactured in the US again, they wouldn't mind paying $65 more for an iPhone. And since 28% is capital gains, that means you don't know if I'm getting my money from my employer and paying in that bracket or capital gains. The fact that you assume to know where my income comes from, shows that you're not a real disciplined thinker, but more the Teabagger type who makes emo assumptions based on limited information. You know, like how teabaggers seem to think they know how the global political and economic system work even though they barely got a HS diploma?

Leaving aside all the immature rhetoric and petty name calling, your comment doesn't even make sense. The current system is obviously flawed, but you don't add to your credibility by rudely portraying an ill-thought out populist idealism. In theory everything the OP said is 100% right on the money, in practice there are too many loopholes for it to function the way it should, but don't confuse the system's current disfunction with the capitalist system that has brought more wealth and more prosperity to an enormous amount of people than any other system in human history. Corporate taxes are in theory meant to encourage reinvestment in a company, making it cheaper to reinvest than pay yourself. The problem is that it's possible (and totally legal) to do a huge number of things which effectively allow you to "pay" yourself at the corporate rate, like loaning yourself money from the corporation or buying yourself property and then leasing it to the corporation, etc. etc. etc. The solution is to ensure that if actual people take money from a corporation (they make a financial gain), that this money is taxed at a fair rate and then be done with it. People don't have problems with companies reinvesting in themselves (it's the reason I support low corporate tax rates in theory)... people have a problem with some rich jackass rigging the system to pay way less than his fair share of taxes. Tax code reform is the key, anyone going on about tax rates for the super rich clearly doesn't understand how the system works, they don't really care if you raise their taxes as they'll find a way around them anyway.

First off, I am the OP. I just don't agree with low taxes on the rich and corporations. I get that you, like the majority of barely literate teabaggers, like low corporate tax rates. I think that corporations shouldn't be focused on profit, but on the health of the communites they serve and the people working in them. I also think that all corproations should be worker controlled, so you're not going to convince me that the current system, while imperfect, just needs a bit of tweaking. More like a complete overhaul. Society won't benefit further from corporations until their charters are changed from pure profit motive. I don't think they should be allowed to exist as they are. If you don't agree, that's fine. The open source movement has convinced me even more that people, working collectively for the good of the community, can create without a profit motive. The idea that people can only be motivated by money is a joke. Doubt I'll ever live to see a day when that's not shoved down everybody's throats, but I'll still have my opinions. Also, I just don't like the comparisons of Capitalism to Feudalism and slavery...yeah, I get it's better. Does that mean capitalism is the best system possible? Absolutely not.

Re:Whatever Apple's paying (1)

Thavilden (1613435) | more than 2 years ago | (#39959279)

So if the 28% he paid was actually paid by his employer and the employer (a corporation) raises prices to pay for it so that the consumers ultimately pay for it with the money they get from their employers who raise prices to pay for it and so on... I have no point, just a circle I found.

Re:Whatever Apple's paying (3, Insightful)

djchristensen (472087) | more than 2 years ago | (#39959343)

Furthermore, corporations just have to raise prices, so in the end consumers pay for it. And they pay for it in a regressive way.

That's not true. There's no economic law or theory that says a corporation MUST make a certain amount of profit. Taxes are on profits, not on revenue, so the taxes reduce the amount of profit a company makes, but they don't make it any more expensive to produce and sell a product. Saying that companies "have to raise prices" is ridiculous. Companies set prices according to what the market will bear (notwithstanding monopolies and such), and profits follow based on how efficient the company is at producing and distributing its products.

And you need to stop and use your brain for a moment. How much in taxes do you think an employer pays on the salary for an employee? If your answer is anything other than zero, think some more. That salary is an expense to the employer (along with benefits, etc) and so is not part of the operating profit. As such, no taxes were collected on that money.

Perhaps you should pick up a copy of "Economics for Dummies".

Re:Whatever Apple's paying (1)

Frequency Domain (601421) | more than 2 years ago | (#39959447)

Furthermore, corporations just have to raise prices, so in the end consumers pay for it. And they pay for it in a regressive way.

And assuming you work for a corporation, those 28% that "you" paid was actually paid by your employer, because that's where all your money comes from.

Your claims reflect a very common misconception. Basic supply/demand analysis shows how it actually works [riohondo.edu] . The relevant slides are on pages 2-3 of the handout. The question of who bears the brunt of taxes depends on the relative elasticities of supply and demand.

Re:Whatever Apple's paying (1)

swb (14022) | more than 2 years ago | (#39959489)

Why? That just encourages them to move more and more of their operations overseas because they can't stay competitive if the US charges them 28% but their competitors pay a fraction of that elsewhere.

We should pass a law that says that a corporation based in the US keeping more than N% of profits overseas is "not a US corporation" and thus ineligible for copyright or patent enforcement claims within the U.S., ineligible for H-1b or other guest worker visas, and the Departments of State and Defense will not protect or advocate on their behalf with foreign governments.

Don't want to pay the fucking freight for the benefits of being based in America? Fuck right off then, perhaps you can rely on the diplomatic, military or civil court services of the Bahamas, the Cayman Islands or wherever you're hiding your money. They'll surely enforce your patent claims, lean on the Chinese when they steal your designs or make sure your product doesn't get hijacked in international waters.

Re:Whatever Apple's paying (0)

Anonymous Coward | more than 2 years ago | (#39958947)

Considering the 2011 number was 31.8%. I am quite sure they would be glad to.

Re:Whatever Apple's paying (0)

Anonymous Coward | more than 2 years ago | (#39959153)

"I paid 28%"

Of what? Go ahead and put your 28% of a dollar on the table but don't expect anyone else to think you somehow deserve equal consideration because "hai guise I put in my 28 cents too!"

Have you heard the good news about tax software? (1)

mveloso (325617) | more than 2 years ago | (#39959357)

Wow, you must suck at doing your taxes. If you're paying the full rate you should invest in something called "TurboTax." It's a software program that helps you file and do your taxes. It also suggests tax deductions you might want to take, etc.

What you're doing is saying "I'm dumb and other people aren't - those other people should be penalized." That's patently unfair. Why should other people get penalized for your stupidity?

Re:Have you heard the good news about tax software (1)

doston (2372830) | more than 2 years ago | (#39959419)

Wow, you must suck at doing your taxes. If you're paying the full rate you should invest in something called "TurboTax." It's a software program that helps you file and do your taxes. It also suggests tax deductions you might want to take, etc.

What you're doing is saying "I'm dumb and other people aren't - those other people should be penalized." That's patently unfair. Why should other people get penalized for your stupidity?

I shouldn't have mentioned my tax rate. The point was, your insults aside, corporations should pay as much as people, since they are people, asshole. ;)

Re:Whatever Apple's paying (2)

whisper_jeff (680366) | more than 2 years ago | (#39959651)

Re:Whatever Apple's paying (0)

Anonymous Coward | more than 2 years ago | (#39959653)

Last year I paid 28%.

I bet you didn't. I bet your marginal tax rate was 28%, and I bet you paid an effective tax rate of 18-19%, which is about what you'd expect for a software engineer making about 110k per year.

Unless you actually made the ~$422,000 (single) or 575-600k (married/joint) required for you to have actually paid 28% *effective* tax rate.

What's that, you say? Effective income taxes are far lower than top marginal rate?! NO WAY!

Re:Whatever Apple's paying (1)

doston (2372830) | more than 2 years ago | (#39959685)

Last year I paid 28%.

I bet you didn't. I bet your marginal tax rate was 28%, and I bet you paid an effective tax rate of 18-19%, which is about what you'd expect for a software engineer making about 110k per year.

Unless you actually made the ~$422,000 (single) or 575-600k (married/joint) required for you to have actually paid 28% *effective* tax rate.

What's that, you say? Effective income taxes are far lower than top marginal rate?! NO WAY!

At least you "bet" and don't claim to know. Kudos for that.

Oh (3, Funny)

Overly Critical Guy (663429) | more than 2 years ago | (#39958787)

Whoops. Well, I'm sure Slashdot's comments to the previous article were totally reasonable.

Why does Apple hate America? (Score:5, Insightful)
by Anonymous Coward on Saturday April 28, @06:23PM (#39834399)

Good citizens pay their fair share, so it must be asked: why does Apple hate America?

...oh.

Re:Oh (-1, Troll)

HarrySquatter (1698416) | more than 2 years ago | (#39958825)

Sup bonch. You switch accounts now that you're main one is permanently -1 and you failed to sway anyone with this post? [slashdot.org] Aren't you supposed to tell us how even if it was true it's okay since Google does it too?

Re:Oh (-1)

Anonymous Coward | more than 2 years ago | (#39959601)

Go away bonch.

Apple tax (1)

sandytaru (1158959) | more than 2 years ago | (#39958819)

When I first read the headline I thought the "Apple tax" was that of common parlance, e.g. the overpriced hardware, the $99 iOS developer fee, etc. I had to reread it once I started to read the summary.

Tax on Profit vs Revenue (1)

sanosuke001 (640243) | more than 2 years ago | (#39958905)

Why can't I pay off expenses before taxes are levied? I want to pay my rent, student loans, food, electricity, etc with pre-tax money. Regardless of what Apple pays, it still feels unfair (even if there are good reasons for it being the way it is, it FEELS unfair).

Re:Tax on Profit vs Revenue (3, Insightful)

MightyYar (622222) | more than 2 years ago | (#39959055)

It's not unfair at all. Anyone can incorporate. Funnel your income through the corporate entity and enjoy what the Apple stockholders do - double taxation. Of course, like Apple, you can write off business expenses prior to being taxed the first time. You can also form a pass-through and only get taxed once, which is what I do as a contractor. But at no point can you deduct personal expenses... so just like Apple, you can deduct business expense rent but not your apartment. You can deduct education that is required to keep your job but not education that benefits only you. You can deduct business lunches but not food that you would have consumed anyway. You can deduct electricity used for your business, but not for your home.

Mind you, I think it is all BS and they shouldn't tax companies at all. Tax the money as it comes out - no special rates for dividends or capital gains. Not only would it make the US an attractive place to locate a corporation, it would encourage richie-riches to keep their money in their business. It might even improve politics, since it would be harder to hide corporate welfare in the tax code. Not that I have my hopes up there, since corporations have absolute free speech right now - but now we're on another topic.

Re:Tax on Profit vs Revenue (3, Informative)

Quiet_Desperation (858215) | more than 2 years ago | (#39959133)

Oh, you! With your silly facts and rational economic concepts. This is Slashdot. You must drink from the Derp-Aide, and call for ALL the taxes to be 100%!

Re:Tax on Profit vs Revenue (1)

MightyYar (622222) | more than 2 years ago | (#39959235)

Oh, I should add one part that I have run into that is VERY unfair. Retirement plans. As a contractor, I can pack away about $17,000 plus 25% of my net income. If I were an employee I couldn't get anywhere near that unless my employer was extremely generous. As a practical matter, most people can only do the $17,000 if they are in a 401(k) program plus whatever employer matching they get. If they qualify for an IRA, they can pack away an "amazing" (sarcasm alert) $5000.

There really should be just a blanket maximum for any retirement program, no matter how one is employed.

Re:Tax on Profit vs Revenue (0)

Anonymous Coward | more than 2 years ago | (#39959107)

If you have to buy your own computer, chair, desk, etc you can write those off. You could pick a super expensive apartment, buy expensive food, waste tons of electricity and pay the same taxes as someone who is starving. Actually that sounds great. That would mean that [insert super rich person] could write off their million dollar homes, their giant yacht (that's a home after all), the giant bill for such, their $250/plate dinners, etc. All pre-tax! Heck if they did it right they could end up paying $0 in taxes!

In summary, you sir or madam are an idiot.

Re:Tax on Profit vs Revenue (1)

PPH (736903) | more than 2 years ago | (#39959291)

That would mean that [insert super rich person] could write off their million dollar homes, their giant yacht (that's a home after all), the giant bill for such, their $250/plate dinners, etc. All pre-tax!

OK, that's fine. Its a start.

Now we can set tax policy based on the assumption that everyone (even those people/corporations) get the same write-offs. Now we write rules and set rates that are applied the same across the board.

Re:Tax on Profit vs Revenue (1)

ColdWetDog (752185) | more than 2 years ago | (#39959131)

Get a good accountant. You'd be surprised with what you can do.

Re:Tax on Profit vs Revenue (1)

HornWumpus (783565) | more than 2 years ago | (#39959403)

There is a fine line between aggressive accounting and tax evasion. Make sure you stay on the good side.

Re:Tax on Profit vs Revenue (1)

Dcnjoe60 (682885) | more than 2 years ago | (#39959299)

Why can't I pay off expenses before taxes are levied? I want to pay my rent, student loans, food, electricity, etc with pre-tax money. Regardless of what Apple pays, it still feels unfair (even if there are good reasons for it being the way it is, it FEELS unfair).

Because you can't buy enough of congress to get that put in place.

Yawn (0)

Anonymous Coward | more than 2 years ago | (#39959081)

Truth hasn't had anything to do with American politics for a long time.

It's the world's biggest lying contest, and the winner gets the White House.

Why? (1)

Impy the Impiuos Imp (442658) | more than 2 years ago | (#39959083)

That a successful company is viewed by many as a cash cow for government indicates a diseased thought process that assumes primacy of government over freedom and the economic might that derives from freedom.

In short, it's putting the cart before the horse. An overloaded cart with fused axels and square wheels.

Re:Why? (1)

PPH (736903) | more than 2 years ago | (#39959205)

If the cart is too heavy, it really doesn't matter where the horse is. [youtube.com]

Doesn't matter (1)

kthreadd (1558445) | more than 2 years ago | (#39959101)

According to Wikipedia NY Times is a reputible source and thus is "the truth". Sorry Apple, no original research here.

Forbes Article is Wrong (5, Informative)

jbrower (775624) | more than 2 years ago | (#39959179)

Tax Accountant Here - Whoever wrote the Forbes article is patently wrong. Large corporations like Apple cannot base all of their current year's estimated tax payments on their prior-year's tax liability (See Section 6655(d)(2) of the Internal Revenue Code), only their first quarter's estimated payment. Apple's 2011 Form 10-K shows that their current tax expense (the amount of cash taxes paid or payable on 2011 profits) was $5,415,000,000. They also have a deferred tax expense (taxes that have economically accrued on 2011 earnings but that aren't due until certain events occur in the future) of $2,868,000,000. Their total tax expense for 2011 was $8,283,000,000 on pre-tax profits of $34,205,000,000, an effective tax rate of 24.2%. They were able to "save" about $3.9 billion in taxes by keeping profits generated in foreign countries parked outside of the USA. Other tax savings came from utilization of the Research & Development tax credit ($167 Million) and the Domestic Production Activities Deduction ($168 Million).
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