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How Apple Sidesteps Billions in Taxes

nytimes.com

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Re: How Apple Sidesteps Billions in Taxes

#141

Post by notJim »

byrneseyeview wrote: post #130

This indirectly brings up the point that it's hard to make the case for directly taxing corporations at all, aside from the fact that it's convenient. Ultimately, all corporations are owned by tax-paying people (or nonprofits). So why not tax their distributions as income? If I forgo working, and instead develop some skill that I could use to raise my income, nobody taxes me on the increase in notional wealth I have…

Another person suggested this idea and the thread, and this was the problem I had with it:

> Ultimately, all corporations are owned by tax-paying people (or nonprofits). So why not tax their distributions as income?

Many companies don't pay dividends and sit on their profits for a long period of time, so in practice, that money might never be taxed.

Re: How Apple Sidesteps Billions in Taxes

#142

Post by prostoalex »

aakil wrote: post #18

There really should be some sort of movement to shame apple (and hopefully other California companies) for doing this. They've benefitted immensely from the infrastructure we've provided and are doing nothing to invest back into it now that they're on top. At the very least they should help with the rising tuition costs at public schools (UCs, Cal States, etc.)

It feels that California was a random choice for Jobs family, not a calculated decision, like Microsoft's move from New Mexico to Washington. On tuition, feels like these guys should start a fund http://www.sfgate.com/webdb/ucpay/

Re: How Apple Sidesteps Billions in Taxes

#143

Post by jarek »

RawData wrote: post #135
yequalsx wrote: post #87

Earlier quoted context omitted.

Your first sentence of your last paragraph shows one of the problems with globalization. We have seen in the U.S. municipalities competing with each other to see who can give the most subsidies to large corporations. The effects have not been so desirable. Now we are seeing this played out on a grand, global scale. It's potentially a race to the bottom. I think globalization without a proper international regulating…

> Most people don't have this luxury. Why not? Seriously. What's stopping anyone from doing this exact thing? Inertia...that's really all - when you get right down to it..

Where do you currently live? What are the immigration requirements to move to, say, Australia?

Re: How Apple Sidesteps Billions in Taxes

#144

Post by temphn »

notJim wrote: post #139
robomartin wrote: post #82

Earlier quoted context omitted.

There's also the very real and reasonable question of where capital might be used more efficiently. Having seen first-hand how government agencies make spending decisions it is my opinion that a huge percentage of tax dollars is wasted. Private industry is almost always far more efficient in allocating resources out of necessity. I have seen cases where government agencies pay double --or more-- what a private entity…

I'm not really convinced that private industry is any better at avoiding waste than government. I must admit I haven't worked in government, but when I worked at large companies, I was shocked and appalled by how incredibly inefficient and wasteful their internal affairs were. Furthermore, many of us [of course, you may disagree] would like for the government to provide more services, and that money has to come from…

There is something called "career status" in the federal government that is worth taking into account:

http://www.aphis.usda.gov/mrpbs/hr/job_opportunities/fed_emp...

  Permanent – Career status as a federal employee is 
  achieved by fulfilling 3 years of substantially continuous 
  service as a career-conditional employee in the 
  competitive service.
http://ohmygov.com/blogs/general_news/archive/2010/08/18/dea...

  The service requirement for Career Tenure is 3 years of 
  substantially continuous creditable service to become a 
  career employee, i.e. obtain career tenure...Obtaining 
  Career status is crucial for federal employees, 
  especially, during times of instability and economic 
  downturn like we are in today.
In short, after just three years in the federal government, you effectively cannot be fired except for gross malfeasance. This radically distorts the cost structure of the federal government.

There are many additional checks and balances on private companies. Perhaps the most important is that a poorly managed company will eventually go bankrupt, while the federal government can defer that for decades via quantitative easing.

Re: How Apple Sidesteps Billions in Taxes

#145

Post by jarek »

mhartl wrote: post #68
pclark wrote: post #46

Well I'll just say it as I do not think anyone else has: I find this disgusting and it seems like capitalism gone too far. California is struggling and would benefit from the contributions of the worlds largest contributions that reside within its borders.

California is "struggling" because of atrociously bad management. It's not like the state lacks in physical or human capital. I mean, Jeebus, the Golden State is home to the capitals of two of the world's greatest industries (entertainment and technology). It takes world-class incompetence to squander such riches. Don't blame the state government, though. The problems are structural, not personal. If we replaced the…

What if pushing capitalism far enough results in California being run like an Enron, a Blockbuster, a Lehman, or any number of tech bubble 1.0 darling businesses instead of like Apple? Apple is pretty lean and is winning the market cap game right now, but the largest companies haven't always been as good.

Re: How Apple Sidesteps Billions in Taxes

#146

Post by gaius »

taligent wrote: post #136
protomyth wrote: post #64

Earlier quoted context omitted.

If they repealed all the Bush era tax cuts, the deficit would still be growing at a higher rate than before. Obama has run up the deficit at a faster pace (approaching double) than Bush and those tax cuts aren't even the major part of it. The biggest problem is the lack of a passed federal budget in over a 1,000 days. This is causing a lot of budget increasing in a time when we cannot afford it. What the media and po…

Sorry but what a load of rubbish. It has been clearly demonstrated time and time again that in periods of depression you DO NOT dramatically cut government spending. All it does is hamper growth which results in less tax income. I have no idea why the US debt is being touted about as being the number one priority when surely increasing growth rates and reducing unemployment are key.

You're referring to Keynes - who also said, in the good years, pay down your debt. You can't borrow your way out of debt (well, I suppose you could if you have a negative interest rate). All you can do is debase your currency. Which the US has been able to do to date, but the instant OPEC decides to trade in EUR instead, they're toast.

Re: How Apple Sidesteps Billions in Taxes

#147

Post by chernevik »

notJim wrote: post #140
ImprovedSilence wrote: post #112

Earlier quoted context omitted.

In private industry, you promoted and seen a valuable if you make money for the company. In the government, you are promoted and seen as a power player if you spend more money. There are lots of super-competitive A-types in govt work who will spend a million dollars just to get another feather in their programs hat.

This seems like you have an idealized vision of private industry. From what I've seen, politics and being friends with the right people is the determining factor in both fields.

Private industry is ultimately disciplined by a marketplace. It can take a while, but managements seeking goals other than returns ultimately lead their companies into losses. The companies either improve or are bankrupted and their assets transferred to more capable managements.

U.S. auto companies are an edifying exception.

Re: How Apple Sidesteps Billions in Taxes

#148

Post by el_presidente »

byrneseyeview wrote: post #124
_delirium wrote: post #111

Earlier quoted context omitted.

What's annoying to me is not that companies choose jurisdictions based on taxes, but that they get away with playing shell games to fake moving between jurisdictions entirely on paper, which also gives them an advantage over smaller companies and individuals that can't do that. I lived in California for some years. If it were possible for me to open a P.O. box (or even rent a small office) in Reno, book all my non-Ca…

The maneuver you describe is equivalent to incorporating in Delaware (or Nevada, I suppose). You can compound your wealth in the low-tax environment, but you will pay taxes when you try to transfer it to yourself. Just like Apple, in this case. Under the current legal regime, they have successfully deferred taxes, not evaded them. It's the same way I carefully evade sales taxes by saving some of my money instead of s…

How much of your paycheck do you save? Apple can afford to wait until the government passes a Homeland Investment Act type law to avoid paying those taxes. OTOH, most people need to pay for things like food, clothes, whatever they're using to post comments on websites, etc.

Re: How Apple Sidesteps Billions in Taxes

#149

Post by chernevik »

notJim wrote: post #139
robomartin wrote: post #82

Earlier quoted context omitted.

There's also the very real and reasonable question of where capital might be used more efficiently. Having seen first-hand how government agencies make spending decisions it is my opinion that a huge percentage of tax dollars is wasted. Private industry is almost always far more efficient in allocating resources out of necessity. I have seen cases where government agencies pay double --or more-- what a private entity…

I'm not really convinced that private industry is any better at avoiding waste than government. I must admit I haven't worked in government, but when I worked at large companies, I was shocked and appalled by how incredibly inefficient and wasteful their internal affairs were. Furthermore, many of us [of course, you may disagree] would like for the government to provide more services, and that money has to come from…

The sheer size and complexity of government in the US has reached the point of effective opacity. It's no longer possible to really assess what the government is doing, or what the costs of those activities are. The political class has every incentive to enhance this opacity. Their poor understanding of economics and management -- they are neither selected for nor disciplined on these skills -- only add to the confusion.

At this point all we really _know_ about the government's activities is that they are overpriced, under-effective, and understated in their size.

There is no rational discussion of government's role until these conditions are resolved.

Re: How Apple Sidesteps Billions in Taxes

#150

Post by CapitalistCartr »

RawData wrote: post #135
yequalsx wrote: post #87

Earlier quoted context omitted.

Your first sentence of your last paragraph shows one of the problems with globalization. We have seen in the U.S. municipalities competing with each other to see who can give the most subsidies to large corporations. The effects have not been so desirable. Now we are seeing this played out on a grand, global scale. It's potentially a race to the bottom. I think globalization without a proper international regulating…

> Most people don't have this luxury. Why not? Seriously. What's stopping anyone from doing this exact thing? Inertia...that's really all - when you get right down to it..

Try emigrating from China to the USA. Its not inertia. There are many millions of people who would gladly move to another country given the opportunity.
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