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How Apple avoids paying taxes in CA

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Re: How Apple avoids paying taxes in CA

#51

Post by harshpotatoes »

jbooth wrote: post #40
harshpotatoes wrote: post #23

Earlier quoted context omitted.

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.

At least in Washington, there is no state income tax, the only thing removed from a workers paycheck is federal tax and social security. The taxes come a bit more indirectly, in the form of spending from employees. With a 9% sales tax, and at least 50,000 employees each for Microsoft and Boeing, Washington still gets money. Additionally, both Microsoft and Boeing more directly support the state economy in other ways (many donations, and support of public works, etc etc). Obviously, these tax breaks do lose the state some money, but there are some benefits to keeping these huge employers happy.

Re: How Apple avoids paying taxes in CA

#52

Post by jbooth »

ryanwaggoner wrote: post #47
jbooth wrote: post #44

Earlier quoted context omitted.

Yeah, and he did all of that because we have a society that enabled him to do it. Good for him. Seriously. But if he doesn't feel obligated to pay back towards that society then he's either missing something inside or fell victim to a convienent ideology that told him it's good to be selfish. Whatever happened to noblesse oblige? Not to mention, of the millionaires I've met, most aren't entrepreneurs and didn't creat…

Are you donating all the extra money you have to the IRS? Are you skipping all deductions, even if you're eligible for them? Why not? Your argument is essentially that we have a duty to pay as much tax as possible. But this is predicated on the belief that paying taxes is the best way to benefit society with your resources. Obviously, this is a long-standing debate that we won't solve here, but I would argue that the…

I'm in the band of income that pays the absolute highest taxes as a % of income. I just want rich people to pay the same % as I do, or a tiny bit higher since they'll miss it less. I don't complain about paying my taxes, I see them as membership fees to live in a society with laws and running water and OSHA.

It's not about "small govt" or "big govt", those are just buzzwords. The government's hugely in the red either way. Who convinced you that this was ideological, rather than a matter of simply paying their fair share?

Re: How Apple avoids paying taxes in CA

#53

Post by jbooth »

harshpotatoes wrote: post #51
jbooth wrote: post #40

Earlier quoted context omitted.

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.

At least in Washington, there is no state income tax, the only thing removed from a workers paycheck is federal tax and social security. The taxes come a bit more indirectly, in the form of spending from employees. With a 9% sales tax, and at least 50,000 employees each for Microsoft and Boeing, Washington still gets money. Additionally, both Microsoft and Boeing more directly support the state economy in other ways…

Thanks

Re: How Apple avoids paying taxes in CA

#54

Post by cjy »

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…

But big companies also receive more scrutiny from regulators. The small business can take advantage of tax loopholes and is much less likely to be audited. There are always gray areas when it comes to taxes and small business don't have to spend as much energy/time defending themselves.

Re: How Apple avoids paying taxes in CA

#55

Post by jbooth »

chrisbolt wrote: post #49
jbooth wrote: post #38

Earlier quoted context omitted.

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, presumab…

Yeah, but they make more than 50% and more than 3/4 of the income, respectively. No, the linked Wikipedia page says: the top 5% with gross income of $137,056 or more pay 57.1% (earning 33.4%)

Well, the wikipedia cites the WSJ, which is behind a paywall. I suspect that they're either wrong or creatively fudging things.

After 100k your FICA payments taper off to nothing. That's money off the top, right into your pocket. Additionally, the capital gains taxes are only 15% compared to much higher for income. This means that the wealthy have a hugely advantageous tax situation.

Although, I thought that the bottom of the top 5% was higher than 137k. Another wiki here: http://en.wikipedia.org/wiki/Household_income_in_the_United_... puts it at 157k, which is probably high enough to tilt the math towards what I was saying. Certainly over 150-200k your tax burden as a % of income starts going down, due to the decreased FICA contribution and potentially a share of income from capital gains.

Re: How Apple avoids paying taxes in CA

#56

Post by eli »

towndrunk wrote: post #7
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.

I hardly think the states issues with money are Apples problem to solve. The state is bankrupt because its congress spends more than it takes in.

Congress? That doesn't really explain why the state is bankrupt. Don't you think Sacramento deserves just a wee bit of blame? That and California's ridiculous constitution that has voters deciding on complex matters of state finance instead of legislators.

Re: How Apple avoids paying taxes in CA

#57

Post by andrewf »

hop wrote: post #32

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...

Does anyone know what percentage of Apple Inc's shares are held by California residents?

I'm guessing that if Apple returned its nest egg to shareholders as a dividend, rather than investing it, California wouldn't see much out of it.

Re: How Apple avoids paying taxes in CA

#58

Post by orangecat »

jbooth wrote: post #31
jrockway wrote: post #4

Earlier quoted context omitted.

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.

Last I heard, Exxon-Mobil, the most profitable corporation in the entire world, doesn't pay a dime in US taxes.

You heard wrong: http://blogs.forbes.com/energysource/2010/04/07/exxon-says-i...

Re: How Apple avoids paying taxes in CA

#59

Post by _delirium »

hop wrote: post #32

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...

I don't think there is actually a "duty to shareholders" to reduce taxation by jurisdiction-shopping. At least, having done some research, I'm unable to come up with a single case where a shareholder lawsuit against a company that declined to do so succeeded.

Re: How Apple avoids paying taxes in CA

#60

Post by _delirium »

ryanwaggoner wrote: post #47
jbooth wrote: post #44

Earlier quoted context omitted.

Yeah, and he did all of that because we have a society that enabled him to do it. Good for him. Seriously. But if he doesn't feel obligated to pay back towards that society then he's either missing something inside or fell victim to a convienent ideology that told him it's good to be selfish. Whatever happened to noblesse oblige? Not to mention, of the millionaires I've met, most aren't entrepreneurs and didn't creat…

Are you donating all the extra money you have to the IRS? Are you skipping all deductions, even if you're eligible for them? Why not? Your argument is essentially that we have a duty to pay as much tax as possible. But this is predicated on the belief that paying taxes is the best way to benefit society with your resources. Obviously, this is a long-standing debate that we won't solve here, but I would argue that the…

I don't know about other people, but I don't go out of my way to avoid taxes. I certainly don't create new companies or change how I do business in order to avoid taxes. If there's an actual deduction box on a form that I'm eligible for, sure, I'll check it. But I don't really spend days thinking up ways to hide my income. Any time I would've spent on that could be much more productively spent by just making more income.
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