Apple chief Cook: You - senators. Get in here and redo this tax law Apple supremo Tim Cook will dare US senators to rewrite tax laws seeing as the politicians are so upset about tech giants' tiny contributions to America's public coffers. At a Senate hearing on Tuesday, the chief exec will suggest ways to persuade firms to bank their profits at home rather than in offshore accounts, a move …
... agreement Apple get should be extended to all businesses in the US large & small. And then see them try and argue why they should be a special case and everyone else not.
Freeze-n-seize their assets pending a 'thorough investigation'. $35BN would appear really fucking quickly.
If we all have to have stick sans carrot from our incompetent governments and bankers then we ALL have to have it.
Yes, they do pay income tax for most employees. Apple's payment processor withholds it from their employees paychecks, and Apple then pays it to the IRS. This is how it works for any employee who is required to fill out IRS Form W-4. In fact, a past employer of mine got in quite a bit of trouble as his company was going bankrupt and he failed to pay the IRS the taxes that were being withheld from his employees paychecks.
You're talking about withholdings which cover the base taxes on most income of lower middle class and low income earners. If you make a reasonably significant salary (about $75k or above for a single person household with no dependents) withholding probably won't cover all of your Federal or State (if your state does income taxes) if you don't have significant deductions.
Not defending Apple but income taxes are the responsibility of the worker and your employer collects them for you as a mandated convience. If employers didn't do this then people would shit when they got their quarterly or annual tax bill.
Obliging everyone to pay their own taxes by writing a check every three months or every week or even each month would work wonders for our tax system. Then everyone would understand how much they are paying in taxes first hand, rather than having the blow softened by their employers paying it for them.
Perhaps poor wording, they will pay payroll tax on their employees amongst a myriad of other taxes.
As for changing the law, the minute they try and do that their next campaign budget wouldn't buy you the cheapest item at a Eritrean garage sale. They are bought and sold like 2 dollar whores, not that I like Apple but Cook was vaguely right. The tax code does need a radical overhaul. It won't happen because the complexity is entirely intentional, all those special interests paid for those sweet little complexities that allow them to pay sod all tax.
seems to become a quite pressing issue.
I like that "Cook told the Washington Post that he planned to propose a "dramatic simplification" of tax laws" -- probable he'd like to pay only 10%, or 5 for the right to 'repatriate' the money (and please ignore how many rules we dodged/exploited/bent to get that money into untaxed accounts to start with).
The difference is that Apple adds value by brining product to consumers through iTunes.
Obama deserves none of the profits Apple earned in the UK. Apple's profits in the UK were earned and taxed under UK law. Done. To tax again before the funds could be used in the USA is plain stupid. UK companies are not taxed for funds they bring into the USA to invest so why should US companies be taxed to bring in funds to invest?
Actually the way it works is you get a credit for taxes paid elsewhere, and if the amount is less than you paid abroad, then you don't pay tax, if more, you pay the difference. I am very well aware of the nature and magnitude of this as I once was a financial analyst for bank and tech companies and calculated the difference between a morally correct rate and the actual one. I have no illusions about the former being paid, but the point of the exercise was to figure out the potential liabilities if laws were to change in an abrupt and brutal way. I spent more time walking my boss through the results than it took me to do the work.
Apple, like many other large multinationals has taken many legal steps to ensure it pays the least amount possible. There is definitely a need for laws to change to ensure that such companies pay the proper amount of tax in all pertinent jurisdictions.
As for comments about Obama, seriously, you do know that Congress is the prime controller of taxes and spending and they happen to be under Republican control, right?
As for Apple salting product, well that is old news, but once again, seriously, the developers of apps are just as value adding, but they pay taxes, as do employees, and so on. This "I shouldn't have to pay tax" fetish is disgusting. Allow me to observe that said tax protects you and Apple from me coming and taking all that you have, because if there was no government to protect you, you would be lucky if someone else got to you first. Lest you think I joke, I have a Hun/Mongol pedigree.
Finally, no one gets taxed on money brought in for investment, but they sure as hell pay taxes on the income derived from those investments. In the future, please save us your conflating of issues.
Make CEOs legally responsible for the taxes their company pays and then watch how they stop playing fast and loose with the tax code. Let him go to jail for the same length of time Wesley Snipes did for his tax problems, and see how quickly they stop trying to get away anything and everything. As it is now, if they screw up, they get a fine, associate that with some jail time, or a higher tax rate next year, something. A company with hundreds of billions of dollars doesn't fear anything, so I bet they try everything.
If there is no legal obligation for Apple to repatriate profits earned outside of the US, then Apple isn't breaking any law. Tim is right. If the idiots don't like the consequences of the law they are responsible for, surely they should change the law?
You're right, it is either the case that the corporations are acting illegally or that the politicians who drafted the tax code are incompetent, or both.
But it is very difficult for politicians to stand up and tell the world "Hey guys, we've just worked out that we're all a useless waste of space, you'd be better off without us" so they take to blaming everyone else for playing by the rules that the politicos gave them to play by.
Exactly, and you can bet your bottom dollar that the Tax laws will not be changed because too many politicos have vested interests or are doing the same thing, or are relying on "donations" from large corps.
Wait for the excuses- "We couldn't possibly do that because it would... blah-bullshit-blah" -same as in the UK.
TAX laws haven't kept pace with companies that exist in the crevices between jurisdictions. Apply, Google, Amazon, and the rest only make a profit because they benefit from society. They benefit from insurance systems, transportation systems, financial systems, from health care systems, and a whole host of other systems. They could not make any profit if they were working within a Somalian government system.
At some point they need to stop freeloading on the rest of us, and pay their fair share.
Complete and absolute CRAP John Lilburne. Companies don't benefit from any of that stuff, their employees do, and so do their customers, and owners. And that's who pays the tax in the end; read up on tax incidence.
You are just one of the greedy shits who want someone else to work hard, innovate, and make money so you can steal it off them. The only freeloaders are people like you, mate.
This whole company taxation is simply a ploy to add more stealth taxes for politicians to piss away in their attempts to gain and retain power. In the end, all taxes are paid by real people, tax a company more and that tax is paid in some combination by its customers, employees, owners, and to a lesser extent the wider "stake holders". So YOU will pay more tax, but as most people seem to be too stupid to realize it they think it's a "good idea to make those evil corporates pay".
Apple (and other companies) aren't breaking any laws. The tax codes permit them to do what they're doing.
Those tax codes are written by politicians. Politicians require boatloads of cash to get elected. Large corporations like App,e and General Electric and ExxonMobile have large boatloads of cash, which they give to politicians who make these activities legal. See the problem?
I remember the first year I started in business for myself. I incorporated as a small corporation doing Web and database programming and general consulting. Did pretty well for myself that first year, at least by the standards of a tiny operation, but you can imagine how I felt when my accountant told me at the end of the year that I would be paying more corporate income tax than Microsoft (who, you may correctly deduce, made rather a lot more profit than I did...).
I sold out Apple in 2002 when I had to pick between a bling machine and a decent rig plus a snowboarding trip. I built my own PC from parts - less than 10 it turns out - and got legit XP licence from a friend and never looked back. It was nice to see Jobs come back and save the company, the dickish public relations were well appreciated on this end. However, the whole IP thing with Samsung really killed my respect for Apple, but I digress. Cook is dead right on this one.
Committee Chair: Welcome to today's hearing on corporate tax policy. Testifying today is Apple Chairman and CEO Tim Cook. We'll open the questioning with the Senator from the great state of Iowa!
Senator: Mr. Cook, why does Apple pay so little in corporate income tax?
Tim Cook: Because the way you guys wrote the laws let's us get away with it.
Committee Chair: And that concludes the substantial portion of today's hearing. I'd like to thank Mr. Cook for attending and I would like to remind everyone that this hearing will be broadcast on CSPAN channel 2 at 3 PM Eastern tomorrow. Have a great day, and drive home safely!
Apple pays its taxes in the countries it makes its sales. The problem is the US wants to charge the difference between the country rates and the US rates when Apple tries to move the cash into the US. The result is the cash stays offshore unless the country has a >= 35% tax rates, in which case Apple can bring the cash to the US without additionnal charge.
For example, if Canada tax rate is at 25%, Apple pays 25% to Canada on sales made in Canada. But if they move the profits made in Canada to the US, the US wants another 10% on top of what Apple already paid (35% - 25% = 10%). This is where the US system is flawed.
This has absolutly nothing to do with tax dodging. Apple does do it with itunes sales in some cases (example: itunes ireland hub deserved the EU), but not with hardware. Tax dodging with software sales or ads is a major problem with Google and Amazon, but not Apple.
We pay taxes on all the products we sell in the US, and we pay every dollar that we owe.
Notice that these are not necessarily the same thing. To break them apart:
We pay taxes on all the products we sell in the US...
"We pay local and state sales tax where required by law." This does not address other tax liabilities, but it is important.
...we pay every dollar that we owe.
"If we can legally avoid paying out anything at all, then we don't, but it's legal. If we brought it into the country, we would owe it, but we don't so we're cool, right?" If the government wants some of this, it will have to change the laws. Mr Cook should be very wary (said by Walter Koenig for comedic effect), as those changes might be retroactive.
It seems that the long term strategy of many companies has been to tie up as much capital in off-shore accounts as they could, causing economic problems at home, then to wait until the government is starved and hope to negotiate a smaller tax bill in exchange for bringing it all back into the country. I say "it seems" - what do I know about corporate finance?
Tax repatriation scheme 2013-05-17 idea 2, expansion of my idea 1
Reduce the nominal 35% tax to this scheme:
-- All US corporations having substatial money abroad but wishing to repatriate it must, collectively:
-- Pay a 15% income repatriation tax for 2014-2018
-- pay a 10% income repatriation tax for 2019-2040
-- pay off all the college debt incurred but not paid off by USA citizens graduating and failing students who enrolled between 1984-2014, program to end by 2019
-- subsidize by corporate division of student pool the college or continuing education costs of students enrolling in 2013-2060
-- IRS/Uncle Sam DO NOT get to tax the students on any of the subsidy or tuition paid for by the corporations
-- The IRS/USA do NOT get to "offset downward" the obligated support to school districts
-- The corporations DO NOT get to write off the subsidies on the tuitions/grants/etc., since they are getting the right to repatriate income at a very reduced tax rate and because they will benefit from having a US education population treated the way high school students are accorded in some European countries
-- The US Dept of Education gets a number of years to fund the increase in wages/salaries to deserving and continually-educating teachers. Unions would be stripped of rights/powers to protect laggard teachers, helping to further divert funds to increase the salaries of remaining teachers.
Corporations and billionaires could just create some sort of lobby for "participatory tax application" and just tell Congress EFFYOO.
Something HAS GOT to be done about the US education system. It's broken, disproportionately funded, weak, and in need of updating.
Dictates and shilling for a larger CEO bonus by a man who uses Chinese slave labor to receive $700 Million in annual compensation. They'll listen to him about as much as they do to Bill Gates when he says that Microsucks needs to be able to hire more low wage green card holders so that they won't need to pay fair compensation to capable U.S. citizens looking to earn a decent living. Many big corporation CEOs are so evil...
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