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How Apple avoids paying taxes in CA

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Re: How Apple avoids paying taxes in CA

#31

Post by jbooth »

jrockway wrote: post #4
dot wrote: post #3

Earlier quoted context omitted.

well, the state is bankrupt. partly because companies that embody its dreams are not chipping in with the bills.

The state just needs to pass a better law. Apple is obligated by its contract to its shareholders to avoid taxes as much as possible; they are just avoiding a lawsuit. (I don't like this, but I understand it. The law just needs to catch up with the market, then everyone will be paying their fair share again.)

Sure, but whenever anyone proposes that, 40% of the country, suckers that actually pay their taxes, stand up and beat their chests and wail about the inequities of making a corporation pay taxes.

Last I heard, Exxon-Mobil, the most profitable corporation in the entire world, doesn't pay a dime in US taxes. Meanwhile, I pay every other week. This is BS.

Re: How Apple avoids paying taxes in CA

#32

Post by hop »

Article title is misleading, they only minimize some capital gains tax on their cash and investments with the nevada entity. And they certainly have a duty to shareholders to do so.

They pay hundreds of millions in income tax on their profit in California, plus everything else - property tax, payroll tax, sales tax on purchases in CA...

Re: How Apple avoids paying taxes in CA

#33

Post by barrkel »

riferguson wrote: post #10

Judge Learned Hand: "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for…

Yes, but in practice, this means that the middle classes pay most of the tax, since the poor don't earn enough, while the rich are able to afford different wealth structures that e.g. fall under capital appreciation, or are structured around shares of ownership and operated in a different state or country for tax reasons, etc.

In other words, the burden of funding of the state - the security, infrastructure and social consensus which is the foundation of all citizens' wealth - proportionately falls least on those that benefit from it most.

Re: How Apple avoids paying taxes in CA

#35

Post by ryanwaggoner »

barrkel wrote: post #33
riferguson wrote: post #10

Judge Learned Hand: "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for…

Yes, but in practice, this means that the middle classes pay most of the tax, since the poor don't earn enough, while the rich are able to afford different wealth structures that e.g. fall under capital appreciation, or are structured around shares of ownership and operated in a different state or country for tax reasons, etc. In other words, the burden of funding of the state - the security, infrastructure and socia…

Not true, the top 5% of earners in the US pay more than 50% of the taxes, and the top 10% pay almost 3/4ths of the taxes.

http://en.wikipedia.org/wiki/Taxation_in_the_United_States#T...

Re: How Apple avoids paying taxes in CA

#36

Post by jbooth »

JabavuAdams wrote: post #26
btmorex wrote: post #17

Earlier quoted context omitted.

That may be true, but the simple fact is that it's a lot easier for a large corporation to minimize its taxes than it is for a small business or individual. For example, a company like apple can afford to pay 10 people full time to move around money and assets in order to minimize taxes. Those people will save Apple far more than it costs to employ them. A 5 person company not only can't match that effort, but if the…

Your example is just an economy of scale. The same could be said of engineering support infrastructure.

The difference being the tax situation is created by laws, and engineering is governed by reality.

The laws shouldn't create a situation where big, slow-moving corporations get huge built-in advantages over smaller, more innovative companies (I know apple is more innovative than many big companies but stay with me here). Particularly, they shouldn't be getting those advantages by paying a bunch of blood-sucking lawyers and accountants to move money around and create nothing. The law should, if anything, be providing support for smaller businesses.

Re: How Apple avoids paying taxes in CA

#37

Post by dejb »

btmorex wrote: post #17
riferguson wrote: post #10

Judge Learned Hand: "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for…

That may be true, but the simple fact is that it's a lot easier for a large corporation to minimize its taxes than it is for a small business or individual. For example, a company like apple can afford to pay 10 people full time to move around money and assets in order to minimize taxes. Those people will save Apple far more than it costs to employ them. A 5 person company not only can't match that effort, but if the…

On the other hand a lot of very small business can often operate by 'cash in hand' which bypasses most taxation.

Re: How Apple avoids paying taxes in CA

#38

Post by jbooth »

ryanwaggoner wrote: post #35
barrkel wrote: post #33

Earlier quoted context omitted.

Yes, but in practice, this means that the middle classes pay most of the tax, since the poor don't earn enough, while the rich are able to afford different wealth structures that e.g. fall under capital appreciation, or are structured around shares of ownership and operated in a different state or country for tax reasons, etc. In other words, the burden of funding of the state - the security, infrastructure and socia…

Not true, the top 5% of earners in the US pay more than 50% of the taxes, and the top 10% pay almost 3/4ths of the taxes. http://en.wikipedia.org/wiki/Taxation_in_the_United_States#T...

Yeah, but they make more than 50% and more than 3/4 of the income, respectively.

Richer people pay lower taxes as a percentage of their income than the middle class. Much lower. It'd be lower even if they did it all by the book and didn't hire expensive accountants and use offshore accounts, tax havens and all of that. Once you add that stuff in it's significantly lower.

It's a bug, not a feature. Meanwhile, presumably you're not a multi-millionaire, and you're actually cheering for them to pay less off their income in taxes than you do. Pretty funny stuff.

Re: How Apple avoids paying taxes in CA

#39

Post by Scott_MacGregor »

It would be nice if California became the most business friendly state in the nation. One of the reasons we chose Austin over California for our startup is the high California taxes and loads of red tape to operate.

Texas seemed a lot more business friendly to us, the only downside we can see is the humid climate.

Re: How Apple avoids paying taxes in CA

#40

Post by jbooth »

harshpotatoes wrote: post #23
technomancy wrote: post #6

MS does the same, though they have to buy off statesmen to get away with it: http://boingboing.net/2010/04/23/microsoft-wins-its-1.html

MS brings in far more money for the state then these tax right offs, which is why the state is so nice to its largest employers. Wa would much prefer to keep MS headquarters here, then pocket a few hundred grand in taxes and lose MS. The state is equally kind to Boeing, who regularly makes threats to move their headquarters elsewhere, and very recently Boeing did just that. So i think in the immediate future WA will…

Yeah, taxes come out of worker paychecks, so it doesn't matter that the big corporate entity with billions in the bank doesn't have to pay any. We can just hit up the workers with their mortgages and families.

Personally, I'd prefer a little more honest accounting, and maybe some more money going the workers' way, a little less going investors' way.

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