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Apple Pays Only 2% Corporate Tax Outside US

timothy posted about a year and a half ago | from the villagers-with-pitchforks dept.

Businesses 432

New submitter dryriver writes with this snippet from the BBC: "Apple paid only $713m (£445m) Tax in the year to 29 September on foreign pre-tax profits of $36.8bn (£23.0bn), a remarkably low rate of 1.9%. Apple channels much of its business in Europe through a subsidiary in the Republic of Ireland, which has lower corporation tax than Britain. But even Ireland charges 12.5%, compared with Britain's 24%. Apple is the latest company to be identified as paying low rates of overseas tax, following Starbucks, Facebook and Google in recent weeks. It has not been suggested that any of their tax avoidance schemes are illegal. Many multinational companies manage to pay substantially below the official corporation tax rates by using tax havens such as the Caribbean islands."

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432 comments

Let's hear it for the beancounters (5, Insightful)

Kittenman (971447) | about a year and a half ago | (#41875079)

As long as it's tax avoidance, rather than tax evasion, nothing illegal in this. Everyone (corporations included) want to pay as little tax as possible. It's the governments job to close the loopholes. It's the beancounters and lawyars jobs to find the new ones.

Re:Let's hear it for the beancounters (1, Insightful)

skegg (666571) | about a year and a half ago | (#41875117)

You're being ridiculous. These are complex tax issues that cross national borders and therefore require difficult multi-government cooperation.

What next?
You'll expect national governments to conjure up ways to hinder / stop their citizens from downloading copyright material.

Oh wait ...

Re:Let's hear it for the beancounters (5, Insightful)

Nemyst (1383049) | about a year and a half ago | (#41875151)

And yet, if everyone respect the spirit of the law instead of finding holes in the letter of it, we as a society would most likely be a whole lot better off.

Then again, this would require such things as integrity and honesty.

Re:Let's hear it for the beancounters (5, Insightful)

Anonymous Coward | about a year and a half ago | (#41875193)

The problem with this is that the more people who play the game honestly, the greater the marginal reward for playing dishonestly.

Re:Let's hear it for the beancounters (0, Flamebait)

Malizar (553281) | about a year and a half ago | (#41875281)

You would have to convince all the Apple fanatics to quit buying Apple products because of things like this. And the masses will keep buying, so there is no reason for companies to do things honestly.

Re:Let's hear it for the beancounters (4, Insightful)

Lumpy (12016) | about a year and a half ago | (#41875341)

Sounds like a plan, now how about you explain away the fact that Google, Samsung, LG, Dell, HTC, IBM, Motorola, and Nokia ALL do the exact same thing.

Oh wait... that's not anti apple.... How rude of me.

Re:Let's hear it for the beancounters (4, Funny)

neo8750 (566137) | about a year and a half ago | (#41875367)

Oh wait... that's not anti apple.... How rude of me.

Now you're getting it!

Re:Let's hear it for the beancounters (4, Insightful)

jbolden (176878) | about a year and a half ago | (#41875431)

Why is the job of Apple customers to enforce tax law? We have an agency, the IRS whose job it is to enforce tax law. Customers should comfortably buy Apple products and if Apple is guilty they should get their ass nailed to the wall for tax evasion with no interruption in service to anyone but their shareholders who watch a nice chunk of the cash disappear in penalties and fines.

If they haven't broken the law, they law should be changed to make this sort of thing much harder. Again nothing to do with customers.

Re:Let's hear it for the beancounters (1, Funny)

Hewligan (202585) | about a year and a half ago | (#41875489)

You're right! We should all stop buying Apple products because of their tax evasion. Anything else would be blatant fanboy-ism, probably caused by some sort of reality distortion field.

Now I just have to decide which of the many technology companies who gladly pay their fair share of taxes to choose from...

Re:Let's hear it for the beancounters (5, Interesting)

hairyfeet (841228) | about a year and a half ago | (#41875303)

The problem is it has become like the days of the old west, remember the old westerns how the bandits would head for the Mexican border and once they were across not worry about shit because all the border mess kept the rangers from giving chase?

Well now with electronic banking you can do that on a planetary scale in seconds. NO country can "close the loopholes" as another suggested because we are not talking about the laws of ONE country, we are talking about the laws of ALL countries as they can bounce a billion dollars through a dozen nation s in less than a second.

Never forget the words of Thomas Jefferson, who tried to warn us of the dangers of mercantilism: "Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains." In the end they don't care if the economy of their "home" country collapses, they can have their funds moved in seconds and have offices in dozens of countries. There is no loyalty or patriotism to country, just profits.

Re:Let's hear it for the beancounters (5, Interesting)

jbolden (176878) | about a year and a half ago | (#41875457)

Of course there is something they can do. Its even in the constitution a Letter of Marque. We simply indicate a list of countries that follow a multi national tax treaty. Money kept anywhere else is considered fair game. That is we will not enforce property rights from that countries banks, so anyone working for a Cayman islands bank can rip off their customers, legally deposit the money in the US, pay about 1/3rd in taxes and keep the rest forever.

Companies will find it mighty uncomfortable once the people who work in the tax havens have such lucrative options.

Re:Let's hear it for the beancounters (1)

Nutria (679911) | about a year and a half ago | (#41875485)

Except how to stop mercantilism? Revert to an agrarian feudal society? Dictatorship of the proletariat? A one world government?

Re:Let's hear it for the beancounters (0)

Anonymous Coward | about a year and a half ago | (#41875305)

And yet, if everyone respect the spirit of the law instead of finding holes in the letter of it, we as a society would most likely be a whole lot better off.

Then again, this would require such things as integrity and honesty.

Don't give me this bullshit of "spirit of the law". It's tax evasion, plain and simple. You either do your taxes honestly, or you don't. Loopholes allow tax professionals to live in a grey area of legality, but there's nothing honest about that grey area. Haven't found one yet. That's why they call them loopholes.

Re:Let's hear it for the beancounters (1)

khallow (566160) | about a year and a half ago | (#41875529)

You either do your taxes honestly, or you don't.

If it's legal, it's as honest as taxpaying will ever get. More power to Apple. Maybe we'll get some serious tax and spending reform out of this sort of thing.

Keep in mind that Apple has an obligation to its shareholders, employees, and customers. It doesn't have an obligation to prop up corrupt and spendthrift governments.

Re:Let's hear it for the beancounters (0)

Anonymous Coward | about a year and a half ago | (#41875335)

And yet, if everyone respect the spirit of the law instead of finding holes in the letter of it, we as a society would most likely be a whole lot better off. Then again, this would require such things as integrity and honesty.

Tell that to Warren Buffet who engages in every personal and corporate loophole to avoid taxes (income tax - pays himself in stock/etc rather than a regular paycheck, death tax - donates money to Gates Foundation which he apparently believes will do more good with his money than the gov't, corporate tax, etc.)

Re:Let's hear it for the beancounters (0)

Anonymous Coward | about a year and a half ago | (#41875373)

Government spending will also, on average, exceed tax receipts. Anyone who think otherwise is a fool.

Re:Let's hear it for the beancounters (4, Informative)

TFAFalcon (1839122) | about a year and a half ago | (#41875401)

The problem with corporations is that respecting the spirit of the law goes against the corporations main purpose - making as much money as possible. And they don't have a conscience.

Re:Let's hear it for the beancounters (0)

Anonymous Coward | about a year and a half ago | (#41875425)

You are right, so long as society respects individual freedoms and gives people a way to affect change. National borders become beneficial is protecting you from the "evils" of a society you disagree with. It all comes down to perspective. To be honest I think its wrong that corporations count as citizens yet live by different standards and means then individual citizens because they have vastly more power and influence. This is were tax avoidance becomes immoral. Yet it could be seen as an appropriate means of resisting a system you no longer control. More appropriate then downright force and violence.

I mean, if I could, I would work and live in a land with low tax rates or fair and egalitarian tax rates, or no tax rates, and no special interest groups. (either option is viable to me)

But then again I'm just an idealist living in my moms basement. But I know in my heart the path we are following is wrong as a culture, nation, and as individuals and institutions in the USA. Its immoral, and unethical, and goes against everything that brings meaning to my life as something other then a slave in a system.

Sprit of the law is also using legal tax breaks (-1)

SuperKendall (25149) | about a year and a half ago | (#41875437)

if everyone respect the spirit of the law instead of finding holes in the letter of it, we as a society would most likely be a whole lot better off.

What makes you think we would be better off with more money in government, famous for wasting it on things like $600 toilet seats or unused airports named after congressmen?

But really, also your claim that companies and people "respect the spirit of the law" ignores that using legal tax breaks IS respecting the spirit of the law. Those tax breaks are there so that companies can direct production in certain ways the government deemed desirable; the companies have done so and thus they deserve the lowered taxes. Yet people like you would spit upon them for doing what they government asked with promise of reward.

Re:Sprit of the law is also using legal tax breaks (1)

Anonymous Coward | about a year and a half ago | (#41875583)

Communists think the more money government takes from everyone the more good they could do, up to and including all product of your labor.

I say the more resources you're forced to give a government, the firmer their grasp on power.

Re:Let's hear it for the beancounters (1)

White Flame (1074973) | about a year and a half ago | (#41875493)

Yes, nobody should be allowed to shop around and find the best deal. If there's a K-Mart next door, it's dishonest to shop elsewhere! They opened up that store by you because they're going to be selling to your neighborhood! How DARE you drive down the street to get a better deal elsewhere?!

Re:Let's hear it for the beancounters (1)

Hentes (2461350) | about a year and a half ago | (#41875531)

Doing business in the country with the lowest taxes is exactly in the spirit of capitalism.

Re:Let's hear it for the beancounters (0)

Anonymous Coward | about a year and a half ago | (#41875155)

Everyone (corporations included) want to pay as little tax as possible.

I thought Stephen King and others wanted to be taxed more.

captcha: author

Re:Let's hear it for the beancounters (1)

czth (454384) | about a year and a half ago | (#41875499)

I don't know about that. If he wants to pay more, nothing is stopping him. Seems more like he wants others to be forced to pay more (although his taxes would go up too and apparently he wouldn't mind that).

Re:Let's hear it for the beancounters (1)

robot5x (1035276) | about a year and a half ago | (#41875165)

the point is that in many countries individual income tax is deducted automatically at source. I work hard for a living, but I do not have the option of using 'offshore havens' or whatnot simply to try and get away with paying as little as possible. My tax is deducted before I even receive a penny of my salary - many years I have TOO MUCH deducted, and I have to jump through hoops to get it paid back.

Corporations have an inbuilt advantage over individuals in that they can essentially structure their business in order to choose how much tax they pay. This may be 'legal' but it is cynical and deceptive. I know it's cool to bash governments these days, but they could do a lot of good with an extra 10.6% of Apple's revenue.

Re:Let's hear it for the beancounters (1)

rtaylor (70602) | about a year and a half ago | (#41875219)

Register the company and have your current employer hire your firm as a contractor. Pay yourself a much lower salary.

Depending on your state or country, you may lose a ton of employee benefits by doing this.

Re:Let's hear it for the beancounters (2)

robot5x (1035276) | about a year and a half ago | (#41875391)

Yes there are some ways around even for an individual but why should I? Here in NZ I have used free hospital care for myself and my family many times in emergencies - healthcare is funded almost entirely from general taxation. I have no problem at all with paying around 30% of my income for this and many other services provided by government.

I know it's also cool to bash big business, but we're talking about just ONE company here who - if they'd paid the already low rate of 12.5% - would have increased revenue to Irish govt by around 2.5b gbp. Extrapolate that across other multi-national companies and we're talking about a shit-load of money that, at the end of the day, is OWED and would significantly help lots and lots of people if put to good use.

Re:Let's hear it for the beancounters (0)

Anonymous Coward | about a year and a half ago | (#41875501)

Ah yes the Ken Livingstone (former Mayor of London) solution. See how well that plays out for him in the polls, compared to the guy who beat him and proudly paid his fair share of taxes.

Re:Let's hear it for the beancounters (0)

Anonymous Coward | about a year and a half ago | (#41875245)

Sure you can do the same. Whatever you're doing, quit and get your boss to subcontract your old job for your old salary to you, acting as Ucorp1. Sadly, Ucorp1 is not profitable, as it has to pay outrageous licence fees to Ucorp2, headquartered in Ireland. Ucorp2 just happens to provide for your needs, but that's just a conincidence.
Oh, don't forget to publicly donate a miniscule amount of your evaded taxes to some good cause or other to show what an outstanding member of your community you are.

If a corporation does it: business as usual.
You try it: jail time.

Re:Let's hear it for the beancounters (1)

larry bagina (561269) | about a year and a half ago | (#41875291)

You can adjust your W4 form to increase or decrease the amount taken out of your paycheck. The IRS has a withholding calculator [irs.gov] that you might want to look into.

You can also structure your life (mortgage, charitable donations, tax-exempt bonds, stabbing your self in the eyes to go blind, etc) for tax purposes if you want. Maybe you don't want to but then again, most businesses don't take advantage of all the tax credits and loopholes either, only the massive ones that can afford the bean counters and former IRS agents to make it possible (like, say, GE paying a 0% rate in the US).

Re:Let's hear it for the beancounters (5, Insightful)

ozmanjusri (601766) | about a year and a half ago | (#41875217)

As long as it's tax avoidance, rather than tax evasion, nothing illegal in this. Everyone (corporations included) want to pay as little tax as possible. It's the governments job to close the loopholes.

Yet Apple is a heavy user of the government-provided resources in my country that my taxes pay for, and is one of the organisations with far more frequent access to the very politicians you're suggesting should fix the problem.

Are you suggesting I should be happy about their ability to manipulate the situation so I get to pay for their infrastructure?

Re:Let's hear it for the beancounters (3, Funny)

Anonymous Coward | about a year and a half ago | (#41875399)

Are you suggesting I should be happy about their ability to manipulate the situation so I get to pay for their infrastructure?

Certainly. There's no greater joy than helping Apple's growth. It's Jobs' will. You must now head to the nearest Apple Store to be cleansed of your sins. Two new iPads should do it.

Re:Let's hear it for the beancounters (1)

Poorcku (831174) | about a year and a half ago | (#41875551)

Steve Jobs also paid those taxes as he grounded his company. He also paid taxes like you do, in order "to buy civilization", like it is always quite fondly quoted around here.

So he "bought" his civilization: infrastructure, laws etc. and he did something with it.

You should not be happy with the Apples ability to manipulate the situation, but that is the point: the real power is the power invested BY YOU to YOUR GOVERNMENT. So, yeah. The Gov. should fix those holes.

Re:Let's hear it for the beancounters (1)

Znork (31774) | about a year and a half ago | (#41875325)

I doubt any governments are going to fix this. They've been bitching about Ireland's corporate tax rate for years now which is utterly irrelevant as the companies in question arent even paying Irelands corporate taxes.

The details of the Double Irish/Dutch sandwich scheme is even on Wikipedia and has been for years. And it will come to no surprise to anyone here, but fantasy pricing of 'intellectual property' finds yet another use as a great way to transfer profits to a shell corporation set up in a place where you just happen to have zero corporate tax.

Just wait 'til the media corps figure they should be able to deduct pirate copies on taxes and demand tax rebates of several trillion dollars.

Re:Let's hear it for the beancounters (5, Insightful)

Yvanhoe (564877) | about a year and a half ago | (#41875337)

In France we call it "fiscal optimization", which I find kind of cute : it makes it clear that corporations have an interest in being bad citizens.

The problem is that the solution is seen by many as the enemy of free-trade : it requires to put commercial barriers on tax-havens. As long as international transactions between countries are not taxed to take into account the different weight of different tax rates, you will have tax avoidance.

I don't understand why there is so much resistance to this idea : we are seeing huge border tax when we import anything physical, why couldn't money transfers be taxed similarily? Why is it an idea that only far-left or anti-globalization hippies are heralding?

As one of said "beancounters" (4, Interesting)

Andy Prough (2730467) | about a year and a half ago | (#41875435)

As an accountant myself, I think it's important to point out that a number of countries (and US states - including my home state of Texas) offer significant tax incentives for businesses that will move more of their operations to their location and create jobs. TFA does not say whether or not this was the case, but an article from Forbes this past March pointed out that Ireland lured significant Apple business to the country through creative tax reduction incentives: http://www.forbes.com/sites/kellyphillipserb/2012/03/18/ireland-continues-to-flex-tax-haven-muscles-will-their-luck-run-out/ [forbes.com]

The article points out that Microsoft, Dell, Pfizer, and Wyeth have also taken advantage of Irish corporate tax incentives. So, a lot of this isn't "beancounter magic" at all - its a carefully negotiated corporate strategy that benefits the company as well as the host country.

Make that 0% (2)

magarity (164372) | about a year and a half ago | (#41875083)

Rule 1 of corporate income taxes: taxes are an expense built into the price of products. No company pays a penny of their own in taxes, they just collect it from customers and pass it on.

Re:Make that 0% (-1)

Anonymous Coward | about a year and a half ago | (#41875127)

Lol you can apply this reasoning to every tax paying entity, individuals included. "You don't pay any taxes, your employer pays them for you"

Re:Make that 0% (1)

ceoyoyo (59147) | about a year and a half ago | (#41875143)

And your employer doesn't pay any taxes, he just takes them out of your salary.

Re:Make that 0% (1)

fustakrakich (1673220) | about a year and a half ago | (#41875299)

And you can rectify that by negotiating your net pay.

Re:Make that 0% (1)

atriusofbricia (686672) | about a year and a half ago | (#41875315)

Lol you can apply this reasoning to every tax paying entity, individuals included. "You don't pay any taxes, your employer pays them for you"

No, no you cannot. I know you're an AC and won't see this response anyway, but still. For a corporation, or any type of business really, a tax is just another cost of doing business. This is the core problem with those special people who demand higher corporate taxes. If you raise corporate taxes all the corporations, quite reasonably I might add, are going to do is raise their prices to compensate. They are not going to lower their profits because government decided they wanted a bigger piece of the pie.

The end result is either higher prices, fewer jobs or both. High taxes kill private sector jobs which are not dependent on government.

Re:Make that 0% (2)

TheGavster (774657) | about a year and a half ago | (#41875375)

For a private citizen, taxes are just a cost of business (living) as well. Just as I need to buy or grow food to survive, I must pay taxes to avoid being shot or jailed. It is more efficient today than in previous centuries, as rather than guessing how many thugs I'll have to pay for my life,I know in advance how much I need to remit to a central clearinghouse.

Re:Make that 0% (1)

atriusofbricia (686672) | about a year and a half ago | (#41875439)

For a private citizen, taxes are just a cost of business (living) as well. Just as I need to buy or grow food to survive, I must pay taxes to avoid being shot or jailed. It is more efficient today than in previous centuries, as rather than guessing how many thugs I'll have to pay for my life,I know in advance how much I need to remit to a central clearinghouse.

Interesting, and true, way of putting it. Of course, there is the difference that you cannot just raise your pay to compensate for a sudden increase in tax rates. A company, limited by what the market will pay, can and will certainly do so. Depending on how well liked the company is by their client base they could even point the finger at government for the higher prices and not have to deal with the negative impact of the price increase, or at least not as much of it.

Re:Make that 0% (1)

Nutria (679911) | about a year and a half ago | (#41875451)

Exactly. Since all tax is eventually paid by the "bottom" of the hierarchy, the solution is to push all taxes down to the bottom. No more tax evasion if everyone pays a consumption tax.

Re:Make that 0% (1)

magarity (164372) | about a year and a half ago | (#41875535)

Lol you can apply this reasoning to every tax paying entity, individuals included. "You don't pay any taxes, your employer pays them for you"

No, the individual is where it stops. Only private individuals pay taxes. The taxes paid by your employer are paid on your behalf.

Re:Make that 0% (1)

Anonymous Coward | about a year and a half ago | (#41875139)

No... that's not how taxes work... I see what you are tyring to say... in that they just pass on the costs... but the price at retail is set by what the customer is willing to pay, not by the cost of production, so any cost (including taxes) is money out of the firm's pockets.

Re:Make that 0% (1)

king neckbeard (1801738) | about a year and a half ago | (#41875319)

The retail price is set at whatever is most profitable for the retailer. This is a function of how much profit is made per unit and how many units will sell at a particular price. A change is cost will likely change the ideal price point. Usually, some but not all of the cost increases go into a higher price. So, if some new tax occurs that means Apple has to pay an extra dollar per unit, the price might go up 75 cents. The real numbers are going to vary depending on factors such as the price elasticity of demand, and be complicated further since electronics so often employ psychological price points

Re:Make that 0% (0)

Anonymous Coward | about a year and a half ago | (#41875459)

Oh my god you idiots. Taxes are not paid entirely by the company OR the consumer. For sales tax, for example, the division of the tax between the parties is determined by the elasticity of the demand for the product.

Re:Make that 0% (1)

magarity (164372) | about a year and a half ago | (#41875579)

No... that's not how taxes work... I see what you are tyring to say... in that they just pass on the costs... but the price at retail is set by what the customer is willing to pay, not by the cost of production, so any cost (including taxes) is money out of the firm's pockets.

The price at retail is set by what customers are willing to pay at a certain supply; if taxes were not built into the price, demand would press the price down by the amount of the missing tax (assuming competition).

Re:Make that 0% (2)

sheetsda (230887) | about a year and a half ago | (#41875177)

No company pays a penny of their own in taxes, they just collect it from customers and pass it on.

Not true. My company pays all of my taxes because I pass on the expense in the form of my salary.

Re:Make that 0% (1)

MtHuurne (602934) | about a year and a half ago | (#41875317)

The article says this is tax paid on their profits; if that is not considered the company's own money then what is?

Re:Make that 0% (0)

Anonymous Coward | about a year and a half ago | (#41875453)

Who can't this be said for? I don't pay my own taxes either, my company pays them for me in my paycheck. My company doesn't pay those taxes, our customers do. So on and so forth.

Re:Make that 0% (1)

sedmonds (94908) | about a year and a half ago | (#41875507)

Taxes on corporations are shared by the purchaser of its products, and by its equity holders. The equity holders are "the company". To say that it's only passed on to consumers is simplistic and misleading.

Perhaps... (1)

Anonymous Coward | about a year and a half ago | (#41875085)

The US should lower its tax rate in response to compete with the rest of the world.

Re:Perhaps... (1, Insightful)

Anonymous Coward | about a year and a half ago | (#41875293)

Like the Caribbean islands that the rich and big business, including Mitt Romney, use to avoid paying taxes. And look how it works! Antigua is flush flush flush!!! with jobs. Tax havens are always equated with job havens. Tons of jobs there.

I can only assume we don't cut taxes to Caribbean levels because we don't have enough workers here to handle the avalanche of jobs that absolutely for sure and must follow.

If I had my way (0)

Anonymous Coward | about a year and a half ago | (#41875113)

I would ensure they paid at least the very minimum required by law in every juridiction they have a physical presence in or else they cannot maintain that physical presence. Give unto Ceaser what is Caeser's...

Re:If I had my way (0)

Anonymous Coward | about a year and a half ago | (#41875393)

I would ensure they paid at least the very minimum required by law in every juridiction they have a physical presence in or else they cannot maintain that physical presence. Give unto Ceaser what is Caeser's...

That is what they are doing. They pay little taxes in the US because much of their operations (manufacturing) has moved overseas. What profit generating activity do they do in the US other than sales? The US part of Apple does not get those phones, tablets and computers from the Chinese part of Apple for free. Tax rate differences between the two regions decide whether that price is closer to actual manufacturing costs or closer to the retail price - US overhead and expenses (which include design and engineering). Since the US has higher taxes the transfer cost from China to the US is probably closer to the later.

Re:If I had my way (1)

TFAFalcon (1839122) | about a year and a half ago | (#41875477)

Well the problem is that corporations can just create sub-corporations for every country. So Apple would not have a physical presence anywhere. Apple-US, for example, would handle all the sale in the US, then 'pay' Apple 110%. So Apple-US would be operating at a loss, having to pay 0 taxes.

Tax chart? (1)

Midnight Thunder (17205) | about a year and a half ago | (#41875115)

It would be nice to get all public companies, making above a certain yearly amount, having the amount of declared tax presented in a chart. The fiscal 100?

It's nice to scream shit about companies and they probably should be paying a bigger tax amount, but we should also be putting this in perspective.

IANAA (I am not an accountant), so more information needs to be provided.

Re:Tax chart? (1)

Midnight Thunder (17205) | about a year and a half ago | (#41875125)

One thing mentioned elsewhere is that there already taxes that make part of salaries and of services or products sold. How much income tax should be paid in top of that?

Re:Tax chart? (1)

ewibble (1655195) | about a year and a half ago | (#41875223)

They should be paying tax on any money made, Sure you could say that they are the ones that pay income tax, sales tax etc since employees must be paid enough to live. But you could equally say that they pay no tax (as mentioned previously) as well since all cost are covered by the customer (at least if it is profitable).

YOU FAIL IT (-1)

Anonymous Coward | about a year and a half ago | (#41875129)

both 3elievEd that

But I'm sure they paint some fences for CSR (1)

Anonymous Coward | about a year and a half ago | (#41875135)

"Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim." - Clement Attlee

No Corporate Taxes (1, Interesting)

MyLongNickName (822545) | about a year and a half ago | (#41875159)

It may not be a popular position, but I don't think corporations should pay income taxes. Instead, we should increase tax rates on higher incomes. If owners want to reinvest their profits into a company, it is a good thing for the economy long-term. Taxes instead should come from consumption. If we had a 50% top end income tax rate and a 0% corporate tax rate, a good deal of the tax avoidance schemes would go away -- no not all of them, but a great deal of them.

That and we should get rid of the mortgage interest deduction.

Re:No Corporate Taxes (5, Interesting)

rtaylor (70602) | about a year and a half ago | (#41875187)

Why would anybody have a personal income when they can just register a company to buy them what they want?

Re:No Corporate Taxes (1)

Trepidity (597) | about a year and a half ago | (#41875205)

You would need to ensure that's not possible either, i.e. that corporate purchases are bona-fide corporate purchases not benefitting specific individuals.

It works reasonably well in Scandinavia, which has relatively low corporate taxes (lower than the U.S.) but quite high individual income taxes.

Re:No Corporate Taxes (1)

Anonymous Coward | about a year and a half ago | (#41875329)

You would need to ensure that's not possible either, i.e. that corporate purchases are bona-fide corporate purchases not benefitting specific individuals.

Really? So how about a group of people getting together where the business buys for their stuff collectively? You know, 30 "shareholders" get together to fund a car rental company. The car rental company rents all their cars to shareholders at cost of operating the vehicle (maintenance, gas, etc), but no capital costs. So basically, no taxes for the new cars!

How complicated do you want to make the loopholes? Because they will not be complicated enough. If there is a way of dodging taxes, there will be a will to do so.

There is a very good reason why CORPORATE INCOME TAXES should be at the same rates as PERSONAL INCOME TAXES. Any other scenario is rampant for abuse.

There is actually no reasonable reason as to why corporate taxes need to be any different than regular taxes. If you wish that shareholders don't pay taxes on corporate income, just make dividends deductible expense. A much lesser evil (read: loophole) than having low corporate income taxes!!

Re:No Corporate Taxes (3, Informative)

aaarrrgggh (9205) | about a year and a half ago | (#41875505)

Corporations inherently pay less tax-- their expenses count against revenue, while individuals are taxed on "revenue."

Re:No Corporate Taxes (1)

Nerdfest (867930) | about a year and a half ago | (#41875227)

That should count as income. I agree with the GP.

Re:No Corporate Taxes (1)

Carewolf (581105) | about a year and a half ago | (#41875313)

That should count as income. I agree with the GP

For that to work you would need to ensure ALL company benefits are taxed. Imagine the beaucrazy necessary to put a value on every single thing your company provides for you directly or indirectly. Do I sense you wrong, or do you really want more invasive government oversight of your personal and business life??

Re:No Corporate Taxes (1)

vlm (69642) | about a year and a half ago | (#41875301)

Why would anybody have a personal income when they can just register a company to buy them what they want?

This results in gaming the fees and licenses for incorporation papers. Well, we don't have a tax, per se, on corporate income, but it costs $10K of lawyer fees to set it up and if you don't want to get audited you'll have to spend $10K/yr on professional accountant tax filing, etc etc.

Re:No Corporate Taxes (1)

larry bagina (561269) | about a year and a half ago | (#41875411)

If your company buys you shit, that's still compensation and you still pay income tax on it.

Re:No Corporate Taxes (0)

Anonymous Coward | about a year and a half ago | (#41875427)

SHHHH, don't tell them our secrets!

Re:No Corporate Taxes (0)

Anonymous Coward | about a year and a half ago | (#41875467)

Why would anybody have a personal income when they can just register a company to buy them what they want?

That's income.

Re:No Corporate Taxes (2)

vlm (69642) | about a year and a half ago | (#41875273)

One argument for corp income tax is preventing citizen income tax evasion. Too "easy" to boost share value by accumulating tax free cash on the corporate books instead of paying out salary, and then distribute valuable shares instead of payroll, and then get to track when and how each individual share gets sold on the market and cap gains tax each share. It would pretty much have to be a package deal where the cap gains tax AND the income tax are eliminated at the same time. The point is its all inter-related so "messing around" with corp income tax is going to have all sorts of strange interaction with capgains taxes and probably many others.

Another analysis, not paying corp income taxes will mostly result in higher dividend taxes and/or higher cap gains taxes on stock sales, so the net result is more govt tax collection, which is not good. Starve the beast.

Consumption taxes work until you fight over the inevitable and corrupt 8000 exceptions. In my state, cold deli items have no sales tax and hot deli items have full tax. So there's about a 6% incentive to buy fried deli chicken out of the cooler vs off the steam table. Crazy but true. Tax avoidance scheme: Purchase educational self assembly learn electronics at home kit that happens to be a working mp3 player at 0% educational consumption tax rate, vs 50% VAT for an ipod.

News? (0)

Hognoxious (631665) | about a year and a half ago | (#41875161)

We've all known about this for 20 years. Perhaps someone could add to the discussion by posting something that's only become obvious in the last decade or so?

Re:News? (0)

phantomfive (622387) | about a year and a half ago | (#41875213)

Exactly. This is yet another group looking to get attention by mentioning 'Apple.'

Hey, Apple has a new iPad. That's news. This is not news.

Re:News? (0)

Cwix (1671282) | about a year and a half ago | (#41875521)

Apple getting a new ipad is not news either.

Designed in California.... (0)

Anonymous Coward | about a year and a half ago | (#41875173)

Great American company... LoL...

Rebalance from corp. tax to VAT (1)

Richard_J_N (631241) | about a year and a half ago | (#41875189)

Why not simply re-balance the tax-take. Over 3 years, ramp corporation tax down to 0, and ramp VAT up to 30% (while perhaps increasing the scope of some of the exemptions). Problem solved.

Re:Rebalance from corp. tax to VAT (1)

Anonymous Coward | about a year and a half ago | (#41875321)

make sure to leave all the regular income taxes in place and then add the 30% VAT on top of that. Look folks, businesses are starving for cash and the regular joes are drowning in it. It's about time someone taxes the shit out of the people to help poor businesses.

Re:Rebalance from corp. tax to VAT (1)

PCK (4192) | about a year and a half ago | (#41875349)

The problem is VAT is n't a tax on companies, it is a tax on consumers with the companies being able to claim back their VAT expenses due to them acting as tax collectors for the government. An increase in VAT would immediately be passed on to the consumer.

Re:Rebalance from corp. tax to VAT (1)

Richard_J_N (631241) | about a year and a half ago | (#41875443)

true... but if corporation tax were abolished, companies could keep their profit margins constant, while cutting pre-tax prices.

Re:Rebalance from corp. tax to VAT (0)

Anonymous Coward | about a year and a half ago | (#41875379)

in Argentina we have a VAT tax (IVA) of 21%. It was supposed to be self-regulating (non-avoidable) because everyone would request the sales ticket in order to lessen their own taxes, but it does not work quite well. End consumers often don't ask for the sales ticket because they have nothing to gain from it except making that merchant push prices up if they paid full taxes on what they sell. Since it's a significant 21%, there's a big incentive to avoid paying the tax, and it really screws up the competitors that do pay the full tax... The govenment finds it difficult to supervise so many mom and pop stores, it seems, and ends up making business owners do a lot of paperwork and other actions supposedly for making it harder to elude taxes, but it seems there's always a way around it...
High VAT taxes make the tax system non-progressive, since the poor will spend a larger part of their income on this tax on their consumption than will the better off, richer people...

Corporations always have well-paid creative accountants and tax advisors and lawyers, though.

A corporate tax with NO exemptions might be the most workable solution, perhaps? OR a VAT system coupled with a guaranteed minimum citizen income covering all the VAT taxes (and a little more) a person might reasonably spend just on food and basics, to compensate...

Re:Rebalance from corp. tax to VAT (1)

pr0nbot (313417) | about a year and a half ago | (#41875445)

Because VAT is a regressive tax, i.e. the poor pay more in VAT as a proportion of their income than the better off.

No, sh!t? (-1)

Anonymous Coward | about a year and a half ago | (#41875199)

That's money Apple could have paid to Google instead, to cover the unfair (and likely illegal) FRAND patent licensing fees Moto-Google is demanding. FTC staff have formally recommended that the government file suit against Google over it. Of course, you'll never read anything anti-Google on Slashdot.

Really? (1)

mosb1000 (710161) | about a year and a half ago | (#41875229)

I would have expected them to pay MORE taxes than they had to.

Re:Really? (1)

Osgeld (1900440) | about a year and a half ago | (#41875469)

I never agree with the more taxes than they have to argument. Due to their edge of illegal money laundering, they never have that fear.

Corporations are an argument for flat tax (1)

Anonymous Coward | about a year and a half ago | (#41875235)

The net-net here is that the very rich and corporations (where the majority of money exists) aren't paying their fair share in comparison to what the diminishing middle class is paying. A flat tax with no exemptions would fix this and normalize what all of us (individuals and corporations (since we've already decided that legally corporations are individuals)) pay.
  To me, a uniform flat tax seems fair to all since it is exactly the same percentage across everyone - one make more, you pay more - those who are not as fortunate to make as much simply pay less.

Re:Corporations are an argument for flat tax (0)

Anonymous Coward | about a year and a half ago | (#41875539)

Except paying 40 percent of gazillions of cash in tax still leaves you with gazillions more than you need to live on. Paying 40% of minimum wage (or less than minimum wage) will, more than likely, leave you starving, cold, in a miserable environment, or worse.

Good for Apple .... (1)

Anonymous Coward | about a year and a half ago | (#41875267)

At the end of the day, corporate taxes are simply hidden taxes on the consumer. Consumers are under the mistaken opinion that the corporation pays the tax but, corporations in order to stay in business simply pass all their costs along in the form of price increases. For example, let's say that corporations payed 100% of the national expenses every year... Do we really expect that that would not be passed along? Corporations simply calculate what they need at the end of the day and then calculate all their expenses set a price and make sales projections to achieve that goal.

Corporate taxes are great for politicians since corporations can't vote. Since corporations can't vote, this gives the politicians ways to achieve additional tax revenue without taxing a constituency who can vote them out of office.

As was explained to me by my congressman, surprisingly, the larger corporations actually WANT high corporate taxes. Why? The small rapidly growing companies make huge profits (in relation to their size) each year. 20-100% annual growth is not uncommon in some industries -- this makes lots of "taxable" income. Additionally, the small corporations spend a lot of money on new equipment (computers, lathes, milling machines, etc.) all of which is taxed and can eventually be depreciated off over 5-7 years provided the business can stay around that long. However, your large corporations such as IBM, GE, GM, Ford, Boeing, etc. do not typically experience such growth and hence there is much less "income" to tax. Since they have already "grown", they have about as much coming off their depreciation rolls as is going on so their "tax" on equipment is basically a wash. The corporate taxes thus act as a shield to protect the large slow moving corporations from the much more profitable fast moving start-ups.

At the end of the day, corporations can only: 1) Buy stuff (which takes people who pay income taxes to create), 2) Hire People (who pay income taxes), 3) Put the money in the bank (which results in lower income rates which people use to buy houses, cars, boats, etc. which takes people who pay income taxes to build etc.) Taxing corporations simply reduces all three of the above and provides politicians with deep pockets that can't defend themselves (by voting) to tax so that they can buy votes from their various constituencies in order to stay in office.

Re:Good for Apple .... (1)

Osgeld (1900440) | about a year and a half ago | (#41875497)

you act like cooperations only pay for things needed. Yes you will get higher prices if you make them pay more taxes, but the higher ups in the company will still receive their bonuses, yachts, mansions and etc if you taxed them at 100% or 0%

Who cares about the tax? (1)

fustakrakich (1673220) | about a year and a half ago | (#41875331)

I just want somebody else to do the paperwork. The IRS (in the US, anyway) is supposed to be a service.

Re:Who cares about the tax? (2)

White Flame (1074973) | about a year and a half ago | (#41875525)

They're a service to the government, not to the people, unfortunately.

Great news! (2)

cvtan (752695) | about a year and a half ago | (#41875369)

Since corporations are considered to be people in the US, this means we can all do the same thing and pay only 2% tax!

They still pay taxes (0)

Anonymous Coward | about a year and a half ago | (#41875397)

It's a privilege every multinational corporation uses. It's not all that significant, though, because (1) the company pays property taxes, (2) the company pays the VAT, (3) the company pays the social security and other employment taxes, (4) the employees pay income taxes and (5) the owners pay capital gains and dividend taxes.

The VAT is especially significant because it's a tax on the revenues instead of profits. In Finland, it's 23%, and Finland is not at the top of the charts.

Even after the tax optimization, it's hardly 0%.

Re:They still pay taxes (1)

Nutria (679911) | about a year and a half ago | (#41875543)

(1) the company pays property taxes,

Unless the gov't has waived them for a decade or more to entice the company to build a plant "there".

(2) the company pays the VAT,

Which they pass on to the consumer.

(3) the company pays the social security and other employment taxes,

Only half of those taxes (at least in the US).

FTC staff recommend suing Google (0)

Anonymous Coward | about a year and a half ago | (#41875409)

Is Apple breaking the law? No.
The big news is that FTC staff have formally recommended a lawsuit be filed against Google for anti-trust violations concerning FRAND patent licensing.

The government takes a passive role in protecting intellectual property rights, leaving it up to patent holders (like Apple) to protect themselves, but when it comes to the abuse of IP rights, the government plays an active role. So watch out, Google!

Why would we want Apple to pay higher taxes? (0)

Anonymous Coward | about a year and a half ago | (#41875495)

Why would we want Apple to pay higer taxes?

Apple does many, many times more good for society with a dollar than any government does.

I am happy (0)

Anonymous Coward | about a year and a half ago | (#41875541)

I am happy to say that I have never given any of my money to Apple and have never owned an Apple product.

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