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Apple Avoided Billions in Taxes, Congressional Panel Says

     
9:32 pm on May 20, 2013 (gmt 0)

WebmasterWorld Administrator travelin_cat is a WebmasterWorld Top Contributor of All Time 10+ Year Member



I can hear the distant sound of stock portfolios imploding.

Even as Apple became the nation’s most profitable technology company, it avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and surprised experts, a Congressional investigation has found.

[nytimes.com...]
10:13 pm on May 20, 2013 (gmt 0)

WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



Not surprised..only by the fact that it took this long to come out..( and not to hijack your thread..but I posted about Google and "claims" that they are doing the same ) [webmasterworld.com...]

The data that some have been considerably less honest, moral than the rest of us ..is ..finally seeing the light of day..maybe..
2:21 am on May 21, 2013 (gmt 0)

WebmasterWorld Senior Member bwnbwn is a WebmasterWorld Top Contributor of All Time 5+ Year Member



I trust anything the NY times reports about as far as I can throw a 1000 lb elephant. I have not doubt Apple made some decisions to limit their tax burden, but the question NY times as a source. Please.
2:59 am on May 21, 2013 (gmt 0)

WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



Do you trust WSJ or Fox?

Wall Street Journal:
Apple Avoided Taxes on Overseas Billions, Senate Panel Finds [online.wsj.com]

Fox Business News
Apple Avoided Billions In Taxes: Senate Report [foxbusiness.com]

WASHINGTON – Apple Inc. avoided "billions of dollars" in U.S. taxes by setting up offshore entities, a Senate report charged Monday. "Apple sought the Holy Grail of tax avoidance," said Sen. Carl Levin, chair of a Senate panel that will hold a hearing about offshore profit shifting on Tuesday. "It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere," Levin said. Apple earlier Monday said it does not use tax gimmicks and that its Irish subsidiary isn't a shell company. The report charges Ireland is an offshore tax haven for Apple.
3:10 am on May 21, 2013 (gmt 0)



Um, what multinational doesn't do this? Guess the Feds need someone to shift the public ire and attention on to.
10:41 am on May 21, 2013 (gmt 0)

WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



At least it's getting looked at.

Some are going to cry that increasing taxes will slow down business growth. There's a lot of truth in that. Unfortunately others will seek to extend that truth by claiming corporate greed money trickles down and helps the economoy. We all know from experience that's voodoo economics (as George HW Bush described it) and that experience teaches us it's a lie, a way to escape paying a fair share of taxes.

Then the others are going to say that tax cuts for wealthy multinationals shift the tax burden to the middle class and that will depress the economy. There's a lot of truth in that. But then some on the left will seek to extend that truth and try to tax the hell out of the wealthy, the way they're doing in France. We all know that's crap economics too.

The question isn't as clear cut as it appears. Politicians and vested interests keep making a money grab and fouling the discussion.
10:48 am on May 21, 2013 (gmt 0)

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personally, i can't wait to see the tax avoidance schemes of all the multinationals come crashing down.


NY times as a source. Please.


are you saying the ny times doesn't adhere to their journalistic policy or do you disagree with something in their policy?

The New York Times Company Policy on Ethics in Journalism:
http://www.nytco.com/press/ethics.html [nytco.com]
11:14 am on May 21, 2013 (gmt 0)

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NY times as a source. Please.

Why would you say that the nyt is an untrustworthy source? Did I miss something?
11:35 am on May 21, 2013 (gmt 0)

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Why would you say that the nyt is an untrustworthy source?

Because they are part of the media.

The media as a whole is untrustworthy.

The NYT is no less trustworthy than other media outlets. They are all as bad as each other.

I know, because I read an article in the paper about it.
1:18 pm on May 21, 2013 (gmt 0)

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I can't say that I blame any company for wanting to reduce their tax liabilities. However, what has been outlined in these reports sounds an awful lot like money laundering on a grand scale.
3:06 pm on May 21, 2013 (gmt 0)

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Apple HAD been reputed to be the only big company that didn't do this. Maybe finally everyone will join me in my bastion of complete impenetrable cynicism. Bwahahaha! ;)

Some are going to cry that increasing taxes will slow down business growth.


Only on small businesses who, like the middle class, don't have a lot of avoidance schemes available to them. According to 2012 estimates, Google already pays about 7% (effective tax rate) and GE pays nothing in taxes. Small businesses typically pay between 13% (sole proprietors) and 26%. Now, if we can afford tax rates like those, surely Google and GE can pony up a bit more? And you can imagine how much just a few percent more from every company that profitable would add to the tax coffers. Right now, that corporate income tax is going to individuals, most of whom are also wealthy enough to avoid paying what they should on their taxes. Some loopholes for wealthy individuals also need to be stitched up.

Disclaimer: I'm an independent and this is my own thinking. I'm disgusted with both major US parties, so if either of them are proposing this, that's just a coincidence and does not imply that I support their other loony tunes positions.
3:13 pm on May 21, 2013 (gmt 0)

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Problem is spending. If the USA didn't have such a bloated spending system there wouldn't be a need for the high tax rates it has on corporations and high income earners, and therefore not quite the level of tax law manipulation to get around it.

When I read about "its not fair", "the middle class will have to pay more", etc. I can't help but think it smacks of middle class hypocrisy. Once deductions are accounted for a middle income spectrum family of four in the USA pays an effective Federal income tax rate of 5.3%. Those in the middle fifth pay an effective rate of 11.1%.

I'll flip the question around: If "we" can pay an effective tax rate of less than 10% to about 11%, why can't large corporations also pay a lower rate like that?
3:29 pm on May 21, 2013 (gmt 0)



Lol I know of no one that pays 5.3. Please send the name of your tax man!

This is NOT to say that anyone, large corps included, should pay a higher tax rate. i still think this is just now "discovered" and released as a way to divert attention from the bad press the White House is getting lately.
3:33 pm on May 21, 2013 (gmt 0)

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personally, i can't wait to see the tax avoidance schemes of all the multinationals come crashing down.


Then they all will leave. You can't tax the rich harder than the middle class, because they have more freedom to get up and walk away.

The real answer is this country needs to stop being so dependent on taxes. There is too much waste at the government level. We're all getting taxed to death to support a bloated government.
3:36 pm on May 21, 2013 (gmt 0)

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Problem isn't taxation. Problem is spending. If the USA didn't have such a bloated spending system there wouldn't be a need for the high tax rates it has...


Now we're back to the political stuff I was talking about. The right and the left repeats a true fact then gives you a lie to wash it down with. Check out this article:

Sorry, Folks, We Don't Just Have 'A Spending Problem' [businessinsider.com]


1. ...the federal government has developed a huge budget deficit. This is because federal spending... has surged, while federal tax revenue... has stagnated.

2. Federal government spending is now running at 24% of GD; higher than almost any time in history.

3.The federal government is only collecting 17% of GDP as tax revenue, a historically low level.


So the real picture is yes, we have a spending problem. But no, we don't have a huge tax burden. It's the opposite, the Federal Government is collecting a historically low level of taxes as expressed as a percentage of GDP.

Although for the past thirty years many programs for the poor, elderly, and for children have been cut, spending must be reined in but taxes also need to be made fair for everyone. Paying taxes is a patriotic duty, it comes with being a citizen of a country. So is it wrong to consider tapping the mega-wealthy corporations that are not paying their fair share?

[edited by: martinibuster at 3:38 pm (utc) on May 21, 2013]

3:37 pm on May 21, 2013 (gmt 0)

WebmasterWorld Administrator travelin_cat is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Let's try and keep politics out of the discussion and focus on the issue which, as I see it, is corporate greed at the very least. Thank you.
4:18 pm on May 21, 2013 (gmt 0)

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They do this because it's good business and good for their shareholders. I'm with Rand Paul on this. It's not the business, it's Congress we need to be barking at.

If I had a billion dollar company and shareholders to report to, I'd do everything I could to save them money, no matter what, as long as it was within the extent of the law, and they did not break any laws.
4:18 pm on May 21, 2013 (gmt 0)

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Let's try and keep politics out of the discussion and focus on the issue which, as I see it, is corporate greed at the very least. Thank you.


When you mention taxes, politics is naturally going to be discussed. I think you're just angry that people aren't discussing what you want them to discuss. Yes, there is greed, but there are greater consequences if you don't let major corporations move money around in a global economy. They don't have to stay in America if we tax them to death.
5:39 pm on May 21, 2013 (gmt 0)

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They don't have to stay in America if we tax them to death.


1. We're not taxing big business to death.

2. They dumped America anyway for tax shelters around the world.
5:57 pm on May 21, 2013 (gmt 0)

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1. We're not taxing big business to death.

2. They dumped America anyway for tax shelters around the world.


+1.

These businesses ACTUALLY pay a smaller percentage than most small and medium businesses, thanks to these loopholes. Surely they can afford to pay the same rate I pay and still be competitive. If not, there's something wrong in business that no tax reform can fix.
6:35 pm on May 21, 2013 (gmt 0)

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1. We're not taxing big business to death.


Right, because they'd leave.

2. They dumped America anyway for tax shelters around the world.


Of course they're going to do this, they have stockholders to please. They'll continue to use the loopholes that Congress lets them use, and now Congress pretends to be shocked how bad it's gotten.

These businesses ACTUALLY pay a smaller percentage than most small and medium businesses


Of course, because they would leave otherwise. Small and medium businesses won't.

Surely they can afford to pay the same rate I pay and still be competitive.


Not in a global economy, where countries let them and their money stay there practically for free because they provide jobs.
9:00 pm on May 21, 2013 (gmt 0)

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Isn't it true that Apple (just like all the ones being bashed in the UK like Amazon, Google and Starbucks) have done nothing illegal?

If you're offered two choices: do this and pay 22% or...do this, sign there and there, set up an HQ here, start closing down offices here and here, then pay 8%, I think we all know which one you'd do.

it's the insane loopholes that need to be closed.

If they want to leave and base themselves in Dublin or Djubrovnik, fine. But then don't allow them to operate in the states. Not a single shipping center, datacenter or PO Box.

what's the bigger threat?

Apple: we'll pull out of the States and effect the fed budget 1%
US Govt.: we'll kick you out and effect your budget 25%

Apple does not hold all the cards here. You do business in the states, start paying your 15/20% on earnings.
10:54 pm on May 21, 2013 (gmt 0)

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This is being discussed to death across many developed countries. Apple merely represents a minuscule tip of a gigantic iceberg.

The only enduring solution is going to be strengthening, and expanding existing international tax treaties, as well as outlawing tax havens.

The only question is, have world leaders the political will, instead of usual empty rhetoric to act in concert?
12:31 am on May 22, 2013 (gmt 0)

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And the only answer is, no. ;)
2:48 am on May 22, 2013 (gmt 0)



Isn't it true that Apple (just like all the ones being bashed in the UK like Amazon, Google and Starbucks) have done nothing illegal?


That's right they haven't broken the law and that is the problem. This behaviour is Americas #1 fiscal problem closely followed, or possibly superseded by an unbelievably corrupt financial system. Every person on the planet suffers in some way because of this.
8:07 am on May 22, 2013 (gmt 0)

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To gain time Apple had to issue $17 Billion in bonds recently to be able to pay out dividends without bringing the money home. Money is cheap a the moment but once interest rates rise again this will not work anymore. They are only buying time.

I wonder when the shareholders will realize that the actual worth of Apple is only a fraction of the current stock price because of this schemes.

Because you can hide the money only for some time, Apple and the likes are sitting on loads of cash and do not know what to do with it. At some point shareholders will demand dividends, and then Apple has to bring the money home. And surprise, surprise a great amount of it will then disappear into paying taxes.
2:50 pm on May 22, 2013 (gmt 0)

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This is a big discussion here in the UK - (it gives us a chance to bash big successful US companies since we have so few of our own).

What the politicians know very well, but choose to ignore for the purposes of grandstanding to the electorate is this:

1. The tax avoidance they're complaining about is not illegal according to the laws THEY created.

2. Company directors have a LEGAL OBLIGATION to act in the best interests of the shareholders. Paying more tax than you are obliged to is unlikely to be in the best interests of shareholders.

So politicians are currently accepting that companies aren't breaking the law - but suggesting that they should start breaking the law so the politicians can collect more tax.

Crazy.
4:03 pm on May 22, 2013 (gmt 0)

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Well Congress allows big corp to do stuff like this, and then they turn around and act all surprised when big corp does what's allowed ..

IMHO, Congress is the one with the problem .. Not big corp .. If the Fed acted more like, and ran things more like big corp did, we wouldn't be having all of these faux problems ..
4:39 pm on May 22, 2013 (gmt 0)

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Apple did nothing illegal. The U.S. tax code is antiquated, unable to address the digital economy in which "goods" cross international boundries like magic.
4:56 pm on May 22, 2013 (gmt 0)

WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



Apple make and made most of their money by selling hardware..like phones, tablets and computers..not buy selling "digital" goods..The "digital economy" has nothing to do with it..

They don't ship "hardware" across international boundaries "like magic"..it ( hardware ) does't "just" materialise in the depots and shops..nor does it arrive via your ISP in a digital data "download"..
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