Apple avoids taxes with ‘complex web’ of offshore entities, Senate inquiry finds

• Abe Vigoda

  

  Is this what we really want for our country? How much is fair?
  

  Apple used a “complex web” of offshore entities — with no employees or physical offices — that allowed it to pay little or no taxes on tens of billions it earned overseas, according to a Senate investigation unveiled Monday. Between 2009 and 2012, the company shielded at least $74 billion in profits from U.S. tax laws by setting up subsidiaries in Ireland under a special arrangement, the report said. While the practice of using foreign operations to avoid U.S. taxes is legal and common among multinationals, Apple’s scheme was unprecedented in its use of multiple affiliates that had no semblance of a physical presence, Senate staffers said.

  http://www.washingtonpost.com/business/technology/with-complex-web-of-offshore-entities-apple-avoids-taxes-senate/2013/05/20/a59daea6-c16c-11e2-bfdb-3886a561c1ff_story.html
• derek bomar

  

  if it's legal, they did nothing wrong.
  
  That said, we need tax reform. Badly.
• FatHobbit

  

  that allowed it to pay little or no taxes on tens of billions it earned overseas,

  I'm with derek. Tax reform is needed and they did nothing wrong.
• cruiser_96

  

  Is this a (knee-jerk, perhaps) reaction to a government that honestly believes that any and all money is theirs?
  
  And yes, tax reform would be nice.
  
  Any suggestions???
• ts1227

  

  ccrunner609;1445864 wrote:They get tax breaks anyway they can legally, this allows them to offer their products at a good price..............nothing to see here.

  
  Except their products are horrendously overpriced
• queencitybuckeye

  ts1227;1445899 wrote:Except their products are horrendously overpriced

  Only if people are somehow being forced to buy them against their will.
• gut

  In most cases, those earnings have, in fact, already been taxed once locally where earned. They then basically consolidate those overseas profits - to fund overseas operations - in places that avoid double taxation. And that's a big problem with repatriating earnings - companies don't want to be taxed AGAIN, especially at the highest marginal rate in the developed world.
  
  When dealing with multi-nationals, tax laws impact all kinds of financing and investment decisions. Not really anything to see here. I think it's pretty hard to justify the rationale where you made money in China, so you MUST bring that money back and pay taxes to the US.
• cruiser_96

  

  I don't think the overpricing of goods is unique to Apple. With that said, I would never buy an Apple product.
  
  
  
  
  
  
  
  
  Sent from my iPad.
• wkfan

  cruiser_96;1445906 wrote:I don't think the overpricing of goods is unique to Apple. With that said, I would never buy an Apple product.
  
  
  
  
  
  
  
  
  Sent from my iPad.

  ISWYDT
• cruiser_96

  

  
• ernest_t_bass

  

  cruiser_96;1445906 wrote:I don't think the overpricing of goods is unique to Apple. With that said, I would never buy an Apple product.
  
  
  
  
  
  
  
  
  Sent from my iPad.

  
• cruiser_96

  

  With today's version of the IRS...
  
  http://www.youtube.com/watch?v=7YvAYIJSSZY
• bases_loaded

  

  Yet my dads company is getting audited because our company has grown and we do business outside Ohio and send guys there to deliver cabinets and our company cards are showing uses in those states.
• QuakerOats

  So the congress, who creates the IRS and massive amounts of ridiculous tax codes and onerous corporate tax rates, is having a hearing to discuss the legal tax avoidance by a corporation. Too hilarious.
  
  
  Government creates the problems/issues, and then has a hearing to ostensibly blame the corporation for the mess government created.
  
  
  
  
  
  Long past time to DE-FUND government!!!!!!!!!!!!!!!!!!!!
• Mulva

  

  If the money was earned overseas, then IDGAF if the U.S. government doesn't get a cut of it.
• gut

  Mulva;1446368 wrote:If the money was earned overseas, then IDGAF if the U.S. government doesn't get a cut of it.

  Bingo. The US has the highest or second highest corporate tax rate in the developed world, yet they fail to understand why Apple (and other companies) won't repatriate profits so it can be taxed.
• believer

  

  I always get a kick out of those who love Big Gubmint but then complain when eeeevil corporations take full and legal advantage of the convoluted progressive tax code set-up by Big Gubmint.
  
  I'm not a huge fan of Apple but I say more power to 'em. This serves only to demonstrate once again how effin messed up the tax code is.
  
  If we want to complain about Big Business taking advantage of tax law written by Big Government the finger of blame needs pointed in the right direction.
• QuakerOats

  ts1227;1445899 wrote:Except their products are horrendously overpriced

  
  If that were the case, they wouldn't sell very many units. As it is, in reality, the market apparently finds value in their products, and tens of millions of people are more than willing to pay for their products. From an Economics 101 standpoint, supply / demand and price elasticity are converging quite nicely at Apple.
• gut

  Haha, yeah I always laugh at people railing about what VZW charges, data caps, etc..
  1) It's too expensive, yet you pay it. Maybe you can't afford it (and blows my mind that people have $500 bills for their entire family)
  2) How in the world did you ever survive just 3-4 years ago without your precious mobile data?
  
  Because people really want something they believe they need it, and therefore it's evil to profit from that need. Entitlement is a powerful thing.
• BoatShoes

  None of our conservative friends talk about moral hazard when its teh biznezz world reaping the rents. MNC's and robust national trade are only possible because of the United States Navy and they refuse to pay employing blatant fraud through transfer pricing, foreign tax credit and deferral manipulation to ensure that they don't.
  
  Let's just scrap corporate taxation and the U.S. Navy and let MNC's fund their own security measures for international trade.
• gut

  So global trade didn't exist before the US Navy? mmmkay
  
  And most of those profits are derived from goods manufactured overseas, anyway.
  
  While I'm at it, FTC/deferrals/transfer pricing are all part of US GAAP and tax law, so I'm not sure what "fraud" you speak of. Not to mention, in most cases they are also subject to international tax law. And the SEC is pretty strict about accounting fraud, too.
• BoatShoes

  gut;1446630 wrote:So global trade didn't exist before the US Navy? mmmkay
  
  And most of those profits are derived from goods manufactured overseas, anyway.

  It did...with the extreme risk of piracy.
  
  See the Barbary Wars.
  
  Apple and company are interested in free loading on their ability to freely ship their goods manufactured in China then fine...Remove the Navy from the South China sea and let Apple bear the cost of protecting the shipping of their products to parket. Additionally, even if their income is foreign sourced (which is often highly dubious due to transfer pricing manipulations among other things) the U.S. taxes on worldwide income (as they should because...like I said...the U.S. Navy basically is the police force for all international trade) and allows the FTC as is.
  
  Surely we can reduce big gubmint while we're at it and allow private market forces to be employed by these companies. Win win.
• jmog

  BoatShoes;1446640 wrote:It did...with the extreme risk of piracy.
  
  See the Barbary Wars.
  
  Apple and company are interested in free loading on their ability to freely ship their goods manufactured in China then fine...Remove the Navy from the South China sea and let Apple bear the cost of protecting the shipping of their products to parket. Additionally, even if their income is foreign sourced (which is often highly dubious due to transfer pricing manipulations among other things) the U.S. taxes on worldwide income (as they should because...like I said...the U.S. Navy basically is the police force for all international trade) and allows the FTC as is.
  
  Surely we can reduce big gubmint while we're at it and allow private market forces to be employed by these companies. Win win.

  So by your logic, every single company in the world, US based or foreign passed, that ships stuff across any waterway, should pay the US some taxes since our Navy is the "police force"?
  
  And you say you aren't a socialist...you just round about talked about taxing foreign entities, next step is one world government!
• queencitybuckeye

  BoatShoes;1446625 wrote:None of our conservative friends talk about moral hazard when its teh biznezz world reaping the rents. MNC's and robust national trade are only possible because of the United States Navy and they refuse to pay [snip]...

  So Apple paying one dollar out of every 40 in corporate income tax collected by the U.S. treasury isn't paying their fair share?
  
  Ignorant or disingenuous. The ONLY two options for a post THIS silly.
• BoatShoes

  jmog;1446712 wrote:So by your logic, every single company in the world, US based or foreign passed, that ships stuff across any waterway, should pay the US some taxes since our Navy is the "police force"?
  
  And you say you aren't a socialist...you just round about talked about taxing foreign entities, next step is one world government!

  Well that can't be inferred from anything I was saying at all really. However, as a practical matter foreign nations adopting our currency as their reserve currency functionally serves this purpose. But, since you suggest it, that's how it would work if a private firm would operate. Would be one way to ameliorate our current account deficit. And, that has nothing to do with socialism...public ownership of the means of production...in any real way than it already does. The public already owns the means of production with regard to the operation and funding of the U.S. Navy and that is socialism (with a little s at least). We just offer those services gratuitously. Charging a fee for those services wouldn't change the mode of production.
  
  And, we tax foreign controlled multinationals/entities on their U.S. source income already...so why are acting like "you just talked about taxing foreign entities" when we already do (as do other nations...hence the foreign tax credit offered to U.S. MNC's that pay foreign taxes).
  
  But just to make clear...I never really suggested anything you're saying...
  
  My post simply pointed out the moral hazard of it all.