In Praise of Apple's Low Taxes

[georgephillip]

Bill Black has spent decades studying white collar crime:

"William Kurt Black (born September 6, 1951) is an American lawyer, academic, author, and a former bank regulator.[1] Black's expertise is in white-collar crime, public finance, regulation, and other topics in law and economics. He developed the concept of 'control fraud', in which a business or national executive uses the entity he or she controls as a "weapon" to commit fraud."

He's makes the case in this recent interview that Apple and its Irish shell are felony violations of US tax laws:

"JAY: Go back to the Apple case. How do they get the money into their U.S. bank accounts and then don't have to pay tax on it? And how do they call it--claim that it's in Ireland if it's sitting here?
BLACK: Okay. So here the series of things. First, Ireland deliberately became a tax haven as a strategy about 20-plus years ago when it reduced its corporate tax rate to half the regular corporate tax rate in Europe. So that's the beginning of the story. And a lot of U.S. corporations in particular go to Ireland.

"Now, the second part of the story is a key scam which is not being treated as unlawful, even though it should be treated as unlawful and people should be punished for felonies for doing it. And this goes by the arcane name of transfer pricing. And what transfer pricing means is I jiggle the accounting to make it appear that the vast bulk of the
earnings occurred in the nation with the lowest tax rate, which of course is back to Ireland.

"Now, this is easier in the context of high-tech companies, because the earnings, of course, you know, not that much of the cost is attributable to the glass and the electronics; it's mostly the marketing and the technology, the intellectual property. And so you assign virtually all the profits to the intellectual property component.

"JAY: And then you assign the rights to the intellectual property to your shell in Ireland.
BLACK: That's correct. You create a shell, except that the shell isn't really in Ireland, necessarily. It's of course actually run out of the United States. But to the Irish, they're told that that is a U.S. entity, and the Irish corporate tax is not assessed on earnings of U.S. entities that are not located in Ireland."

This is hysterical nonsense and completely ignores that each country in which a company does business has an army of tax collectors to get as much as they can.

Tax treaties exist between countries in order to deal with the double taxation issue. (The lunacy in the U.S. right now is insisting on double taxation - taxing income earned in other tax jurisdictions). Transfer pricing is done for an operation to take on its share of the company's cost structure. If development is done in the U.S. for a product that is sold around the world, the international sales pay a royalty (transfer price) for their share of that expense base.

There are also variants for the nature of the business entity (marketing or liaison office, which are generally handled on a cost plus basis up to full subsidiaries, which recognize revenue and pay royalties or full transfer pricing).

Countries, such as Ireland, use low tax rates to encourage business to locate there. Quelle surprise! We see Texas, Utah and other low tax states doing the very same thing in the U.S. today. Is it TAX AVOIDANCE for Google to have an office in Texas instead of locating employees in CA?

You Total Economic Illiterates With Severe Cognitive Dissonance persist in the idea that taxes don't affect behavior. Yet you favor taxes on cigarettes to discourage smoking and high gas taxes to discourage gas guzzlers. Well, what do you think high taxes on business are supposed to accomplish?

While Corporate Sluts Who Swallow Every Wall Street Load Twice (that would be You) never quite make the existential connection that corporations, whether they manufacture cigarettes, or gasoline or computers, do not even exist without a governmental charter.

This process has taken place entirely through the courts; no US voter ever had an opportunity to cast a vote regarding corporate citizenship.

Hence corporate citizens should be required to pay for the entire cost of operating courts in all countries they sell their products in; think that might affect corporate behavior?

Think the 1% might have to alter their rich-bitch lifestyles, Leona?

 

[AmazonTania]

I have nothing but disdain for Apple's tax evasion.

Do you have an accountant? If so, why?

Because corporations working through lobbyists have bought enough federal influence to make American tax codes byzantine labyrinths filled with gordian knots. In a decent country no law would be too complex for the average citizen to understand, and all law would be across the board rather than targeted to specific sectors or constituents through opaque legal veils.

The amount of money decent people spend on cultural parasites in finance and law is as much of a crime against the citizens of the United States as the sale of influence to lobbyists.

As many have observed, the real crime in America today is what is legal.


The law is the law. If Apple has done nothing illegal, there it is. All honest people can agree not all laws are good laws.

That doesn't answer my question.

Do you have an accountant? If so, why?

 

[whitehall]

It's a side show created by the democrat majority in the senate to take the pressure off the dozen scandals in the Hussein administration. Some of the whiny democrat senators made the rules and now they complain that somebody is smarter than they are. Hint...everybody in the private sector is smarter than Carl Levin.

 

[AmazonTania]

Hey you corporation lovers. IF Apple gave their lobbyists enough money to influence Congress to the point where, instead of Apple paying taxes to the US Treasury, the US Treasury had to pay Apple 5 billion dollars, would that be a good thing and OK with you all?

Yep.

I mean, Apple could go to China. Wait a minute, Apple is IN China. Wouldn't it be great to have millions and millions to spend on lobbyists to make things happen just for YOU? Like Apple and other major corporation do?

We don't seek to have lobbyist make things happen for us. You want Government to have an increasing role in the economy, therefore giving it more power to influence the marketplace and power so it can be influenced by corporations. What exactly did you think was going to happen? If Apple can effectively influence the Government, good for them. But you have no one to really blame but yourselves.

BTW don't buy Apples' product if you don't like Apple. Only apples I own are on the kitchen counter.

I do like Apple, and I do purchase Apple products. Thanks for the advice, though.

 

[AmazonTania]

No it's not.

Apple didn't take it upon itself to act in an ethical manner in relation to tax law.

Quite the opposite. It used it's success to help cobble a system that keeps them from paying their fair share.

That is the ethical manner. If you don't like it, change the tax laws or lower taxes. Either way, Apple is not investing in America for a very long time. As are many other US corporations.

 

[ScienceRocks]

Corporations help make the world go around. They give people what they want...

You leftist bastards would love to make everyone poor like you make people in Cuba.

 

[ScienceRocks]

We enjoy their products
We enjoy their invention
We enjoy cheap food
We enjoy the choices

Corperations aren't our enemy. It is kind of a weird relationship we have with them.

 

[AmazonTania]

Apple has the choice to go to China or somewhere else. This is the way it is.

Yup.

And that tax law makes it profitable.

That's a problem.

It doesn't make it profitable. It just encourages it. China's tax laws and regulation compliance cost are vastly lower than that of America. Even still, the only thing Apple can do is keep their offshore profits, offshore. The moment they try to repatriate those profits, they'll get hit with a 35% corporate tax.

Apple is far from profiting off of the US tax code, but they are doing much better investing aboard than they are investing here.

 

[Dugdale_Jukes]

Do you have an accountant? If so, why?

Because corporations working through lobbyists have bought enough federal influence to make American tax codes byzantine labyrinths filled with gordian knots. In a decent country no law would be too complex for the average citizen to understand, and all law would be across the board rather than targeted to specific sectors or constituents through opaque legal veils.

The amount of money decent people spend on cultural parasites in finance and law is as much of a crime against the citizens of the United States as the sale of influence to lobbyists.

As many have observed, the real crime in America today is what is legal.


The law is the law. If Apple has done nothing illegal, there it is. All honest people can agree not all laws are good laws.

That doesn't answer my question.

Do you have an accountant? If so, why?

Actually this

Because corporations working through lobbyists have bought enough federal influence to make American tax codes byzantine labyrinths filled with gordian knots.
​

did answer your question, although the "yes" isn't literally there which appears to confuse victims of modern public education.

 

[AmazonTania]

Actually this

Because corporations working through lobbyists have bought enough federal influence to make American tax codes byzantine labyrinths filled with gordian knots.
​

did answer your question, although the "yes" isn't literally there which appears to confuse victims of modern public education.

It doesn't answer my question, because it's not a direct answer in relation to the question. On a test, even if you answer a question on an answer sheet, if you don't directly answer the question, you get the question wrong. Even victims of a modern public school education can understand this.

Now again, do you use an accountant to file your taxes? If so, why?

 

[Crackerjaxon]

But in fact it's the politicians who deserve condemnation, not Apple.

Absolutely spot on correct.

No it's not.

Apple didn't take it upon itself to act in an ethical manner in relation to tax law.

Quite the opposite. It used it's success to help cobble a system that keeps them from paying their fair share.

What, exactly, is Apple's fair share?

 

[Flopper]

I have nothing but disdain for Apple's tax evasion.

It's not tax evasion to file tax returns that are perfectly legal.

Of course it's legal. It's just not ethical, but big business is not about ethics, it about maximizing profits using whatever legal means is available. I don't hold Apple responsible. They are what they are. They're no better or worst than other businesses. I hold the politicians responsible. They made the laws and refuse to do anything about them.

 

[Dugdale_Jukes]

Hey you corporation lovers. IF Apple gave their lobbyists enough money to influence Congress to the point where, instead of Apple paying taxes to the US Treasury, the US Treasury had to pay Apple 5 billion dollars, would that be a good thing and OK with you all?

I mean, Apple could go to China. Wait a minute, Apple is IN China. Wouldn't it be great to have millions and millions to spend on lobbyists to make things happen just for YOU? Like Apple and other major corporation do?

BTW don't buy Apples' product if you don't like Apple. Only apples I own are on the kitchen counter.

There are two kinds of corporation lovers: the filthy fucking credentialed parasites who would be starving in a competitive economy with a rational tax code, and white trash halfwits.

I admired Apple until it was clear Jobs was a megalomaniac. He finally found his place, but that was years after it became clear to me that IBM and Microsoft were in fact the lesser of two evils.

My niece got me an ipod a couple of years ago. There were two challenges, one was not throwing it in the trash. The other was biting my tongue long enough to convince her my hearing is too impaired to want to risk making it worse with those ear things.

In a little aside here, it isn't possible for me to take people seriously if they listen to music with those ear inserts. Years ago it was clear to me that people who wear baseball caps backwards are, on average, 20-30 IQ pts below the norm in my world. Those ear plugs are a similar indicator.

 

[ScienceRocks]

We're damn lucky we have the invention of these corperations. Are they greedy, yes!!!

 

[Crackerjaxon]

Bill Black has spent decades studying white collar crime:

"William Kurt Black (born September 6, 1951) is an American lawyer, academic, author, and a former bank regulator.[1] Black's expertise is in white-collar crime, public finance, regulation, and other topics in law and economics. He developed the concept of 'control fraud', in which a business or national executive uses the entity he or she controls as a "weapon" to commit fraud."

He's makes the case in this recent interview that Apple and its Irish shell are felony violations of US tax laws:

"JAY: Go back to the Apple case. How do they get the money into their U.S. bank accounts and then don't have to pay tax on it? And how do they call it--claim that it's in Ireland if it's sitting here?
BLACK: Okay. So here the series of things. First, Ireland deliberately became a tax haven as a strategy about 20-plus years ago when it reduced its corporate tax rate to half the regular corporate tax rate in Europe. So that's the beginning of the story. And a lot of U.S. corporations in particular go to Ireland.

"Now, the second part of the story is a key scam which is not being treated as unlawful, even though it should be treated as unlawful and people should be punished for felonies for doing it. And this goes by the arcane name of transfer pricing. And what transfer pricing means is I jiggle the accounting to make it appear that the vast bulk of the
earnings occurred in the nation with the lowest tax rate, which of course is back to Ireland.

"Now, this is easier in the context of high-tech companies, because the earnings, of course, you know, not that much of the cost is attributable to the glass and the electronics; it's mostly the marketing and the technology, the intellectual property. And so you assign virtually all the profits to the intellectual property component.

"JAY: And then you assign the rights to the intellectual property to your shell in Ireland.
BLACK: That's correct. You create a shell, except that the shell isn't really in Ireland, necessarily. It's of course actually run out of the United States. But to the Irish, they're told that that is a U.S. entity, and the Irish corporate tax is not assessed on earnings of U.S. entities that are not located in Ireland."

This is hysterical nonsense and completely ignores that each country in which a company does business has an army of tax collectors to get as much as they can.

Tax treaties exist between countries in order to deal with the double taxation issue. (The lunacy in the U.S. right now is insisting on double taxation - taxing income earned in other tax jurisdictions). Transfer pricing is done for an operation to take on its share of the company's cost structure. If development is done in the U.S. for a product that is sold around the world, the international sales pay a royalty (transfer price) for their share of that expense base.

There are also variants for the nature of the business entity (marketing or liaison office, which are generally handled on a cost plus basis up to full subsidiaries, which recognize revenue and pay royalties or full transfer pricing).

Countries, such as Ireland, use low tax rates to encourage business to locate there. Quelle surprise! We see Texas, Utah and other low tax states doing the very same thing in the U.S. today. Is it TAX AVOIDANCE for Google to have an office in Texas instead of locating employees in CA?

You Total Economic Illiterates With Severe Cognitive Dissonance persist in the idea that taxes don't affect behavior. Yet you favor taxes on cigarettes to discourage smoking and high gas taxes to discourage gas guzzlers. Well, what do you think high taxes on business are supposed to accomplish?

While Corporate Sluts Who Swallow Every Wall Street Load Twice (that would be You) never quite make the existential connection that corporations, whether they manufacture cigarettes, or gasoline or computers, do not even exist without a governmental charter.

This process has taken place entirely through the courts; no US voter ever had an opportunity to cast a vote regarding corporate citizenship.

Hence corporate citizens should be required to pay for the entire cost of operating courts in all countries they sell their products in; think that might affect corporate behavior?

Think the 1% might have to alter their rich-bitch lifestyles, Leona?

Let's see...

You can't do business without permission from the government. Then you owe the government for permission.

 

[ScienceRocks]

This is why I feel the extreme left is also anti-civilization.

 

[AmazonTania]

Of course it's legal. It's just not ethical, but big business is not about ethics, it about maximizing profits using whatever legal means is available.

Ethics are relative. Why is it not ethical? Because you disagree? That seems like a logical reason. What exactly makes you believe that anyone is entitled to another person's labour?

I don't hold Apple responsible. They are what they are. They're no better or worst than other businesses. I hold the politicians responsible. They made the laws and refuse to do anything about them.

Or they could enforce the laws, and Apple can choose to employee less services at Apple locations.

 

[Dugdale_Jukes]

Actually this

Because corporations working through lobbyists have bought enough federal influence to make American tax codes byzantine labyrinths filled with gordian knots.
​

did answer your question, although the "yes" isn't literally there which appears to confuse victims of modern public education.

It doesn't answer my question, because it's not a direct answer in relation to the question. On a test, even if you answer a question on an answer sheet, if you don't directly answer the question, you get the question wrong. Even victims of a modern public school education can understand this.

Now again, do you use an accountant to file your taxes? If so, why?

Like a bad statistician you attempt to direct my answer to your desired result.
That is not going to happen.
You have my answer.

 

[AmazonTania]

Like a bad statistician you attempt to direct my answer to your desired result.
That is not going to happen.
You have my answer.

I don't require any result but a yes or a no. But I already know what the answer to the question is by your refusal to answer. In which case, you are a hypocrite. Shocker...

 

[Dugdale_Jukes]

post moved for easier visibility