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Uncovering Apple’s Tax Havens

Apple in the hot seat.  Lawmakers say the company dodged billions in taxes on overseas profits.  We’ll look at the world of offshore tax escapes.

Apple CEO Tim Cook is sworn in on Capitol Hill in Washington, Tuesday, May 21, 2013, prior to testifying before the Senate Homeland Security and Governmental Affairs Permanent subcommittee on Investigations hearing. (J. Scott Applewhite/AP)

Apple CEO Tim Cook is sworn in on Capitol Hill in Washington, Tuesday, May 21, 2013, prior to testifying before the Senate Homeland Security and Governmental Affairs Permanent subcommittee on Investigations hearing. (J. Scott Applewhite/AP)

The headlines looked pretty bad for Apple this week on taxes and offshore shelters.  “Gimmicks.”  “Schemes.”  Billions dodged.  Stateless subsidiaries paying taxes nowhere, on giant revenues.

Then on Tuesday, Apple CEO Tim Cook in the hot seat in Washington, insisting that Apple is proud to be an American company, that it’s broken no laws.  Reminding Congress of the billions it does pay in U.S. taxes.  Apple is not the only U.S. corporation working the edges of tax law in the global economy. It’s a big deal.

Up next On Point: Apple’s taxes, American law and offshore escapes.

– Tom Ashbrook

Guests

Jesse Drucker, investigative reporter for Bloomberg News and author of the journalism series “The Great Corporate Tax Dodge.” (@JesseDrucker)

Kara Swisher, co-executive editor of the technology news website AllThingsD. (@karaswisher)

Edward Kleinbard, professor of law at the University of Southern California’s School of Law. He served as Chief of Staff of the Joint Committee on Taxation.

Alan Auerbach, professor of economics and law at University of California Berkeley and director of the Burch Center for Tax Policy and Public Finance there. He also served as deputy Chief of Staff of the Joint Committee on Taxation.

From Tom’s Reading List

Politico: Tim Cook Defends Apple Tax Policy – “Apple CEO Tim Cook on Tuesday vigorously defended his company on Capitol Hill against charges that the tech company stashes billions of dollars overseas to lower its U.S. tax bill. In his first appearance before Congress, Cook told a Senate investigative committee that the company is a leading U.S. taxpayer that’s generated thousands of new jobs. And he countered that the U.S. Tax Code itself is faulty because it hamstrings ‘American corporations in relations to our foreign competitors.’”

Bloomberg Businessweek: Google Joins Apple Avoiding Taxes With Stateless Income – “Google, for example, has used a pair of tax shelters known by tax attorneys as the ‘Double Irish’ and ‘Dutch Sandwich’ that move foreign profits through Ireland and the Netherlands to Bermuda to avoid about $2 billion in income taxes a year, according to the company’s filings in the U.S. Like Apple, Mountain View, California-based Google shifts profits into an Irish subsidiary that doesn’t pay taxes in Ireland. In Google’s case, it says the unit is managed in Bermuda, which has no corporate income tax.”

Slate: Scrap The Corporate Income Tax – “If you’re bothered about companies like GE, scrap various tax breaks. If you’re worried about companies paying high rates, lower the rate. If you’re annoyed about Apple, go after foreign accounts. But looking at them all simultaneously suggests an alternative to reform. Just give up. Though the corporate income tax as presently constructed supports a small army of accountants, tax lawyers, lobbyists, and CNBC talking heads, it doesn’t raise very much revenue.”

The Economist: Tax Havens: The Missing $20 Trillion  — “Getting rich people to pay their dues is an admirable ambition, but this attack is both hypocritical and misguided. It may be good populist politics, but leaders who want to make their countries work better should focus instead on cleaning up their own back yards and reforming their tax systems.”

Tweets From During The Show

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  • Wm_James_from_Missouri

    American corporations paying wages to foreign workers, to produce products that will be sold here in the US at or near the same old price are as guilty as Apple, in that, they are subverting the payroll income taxes, Social Security and Medicare taxes and increasing the US deficit. If these corporations were pricing these goods under correct leadership, ( All political parties are at fault ! ) Americans would have the excess capital we need to sustain our Government and grow our economy ( probably at double digit rates ). Instead, we give too many of the wrong types of tax breaks to US producers producing overseas for our markets. These companies are able to roll their profits into retained earnings, which produces unwarranted capital gains, that will be taxed at lower rates than earned income. It is worth noting, that some of these profits are reabsorbed by corporate elites and other power brokers, thereby, further, subverting stockholder’s possible gains ! Criminal ! Once again; please support a law to force profitable corporations to pay cash dividends. This is the answer !

    Note: Many will try to tell you that such actions boost corporate stock prices, which effectively trickle down. Don’t believe them. If this were true we would be awash in wealth by now ! You have eyes and a mind . Use them ! !

  • Shag_Wevera

    Hammer ‘em, I guess.  Just remember, people are greedy and immoral and businesses are greedier and even less moral.  You could have a cast of thousands just chasing tax cheats around.  This is a failure by definition.  You base your society on greed and the pursuit of wealth, then try to get people to willigly have a percentage taken from them.  You’ll never win.

    • StilllHere

      Governments are the worst.

      • margbi

         Governments are terrible – until you need them. Then they better be quick with relief.

        • StilllHere

          Well I’d like to think the trillions they get does more than assure lifetime Viagra for their retirees.

          • Shag_Wevera

            How about just the promised SS payments and medicare?  I’d happily settle for that.

          • StilllHere

            Contractually you’re only entitled to what you paid in, no more.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Out of ideas already?

            I mean, if ever pixels could make the sound of the bottom of a barrel being scraped empty, your post would be it.

      • Shag_Wevera

        I don’t understand your comment, beyond you don’t like government.

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          You’re selling StillHere short: He obviously gets everywhere on a jetpack, drinks water he distills from his own liquid waste, and has a force-field around his home (plus a portable one around his car) which precludes the need for ever calling 911/

      • jefe68

        Remember that when you need a cop, or your house is on fire.

      • http://www.facebook.com/NewtonsBob Bob Kavanagh

        Move to Sudan, please, quickly.

      • Jasoturner

        What about finding an eel in your kayak?

    • http://read-write-blue.blogspot.com/ RWB

      How much extra money do you donate to the government?  What tax deductions don’t you take advantage of?  If you don’t do these things then how can you ask others to do them?

      • Shag_Wevera

        I pay what I’m supposed to.  I use the deductions I’m aware of.  I don’t break or bend any laws.  I don’t take questionable deductions.  I don’t hire a team of experts to get me out of the taxes I’m supposed to pay.  I’m not talking about legal deductions…  I think I even used the term “tax cheats”, didn’t I?

        • http://read-write-blue.blogspot.com/ RWB

          Apple claims to pay just what they are supposed to pay as well.  How come you think that they need to pay more? 

          • Shag_Wevera

            Legal, moral, and patriotic are all different things.

          • http://read-write-blue.blogspot.com/ RWB

            So how much of your resources do you commit to your patriotism?  Do you choose to buy more expensive American made products over cheaper products from foreign manufactures?  What do you do that proves you are so much more patriotic than Apple?  

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            More patriotic than Apple? That’s any of us, almost by default.

            Apple doesn’t need to pretend it’s “patriotic” until they need the US government to do something for them.

            A century-plus ago that “something” was gunboats protecting United Fruit’s bananas in Central America. Now it’s tax avoidance that makes people blanch, and when Apple needs US law on intellectual property rights or tariffs, nobody in the government’s gonna make Apple pass any test that one needs to get TANF or housing assistance.

          • http://read-write-blue.blogspot.com/ RWB

            If you can’t answer the question then don’t.  If you want to quote from “War is a Racket” you could start your own thread.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            You’re the one who wanted “proof” from an ordinary citizen that they were “more patriotic” than a corporation.

          • http://read-write-blue.blogspot.com/ RWB

            You offered no proof in answer to my question.  All you attempted was to redirect the conversation.  And I do not think of Shag_Wevera as ordinary.  

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Basing your argument on “I think some ciitizen’s income is akin to a big multinational corporation’s is not gonna get you very far.

            If you can, rephrase.

        • Gregg Smith

          Experts cannot get you out of taxes you’re supposed to pay. They can point out taxes you are not supposed to pay.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            I think ~8.30am is a bit early to find out that this will be “nothing but semantics day”.

          • Gregg Smith

            Certain things are either allowed or they are not. Lawyers can clarify all of that.

    • Shag_Wevera

      BTW, I’d happily pay twice my current taxes if like say Germany, we had universal healthcare and free higher education for children.  I don’t pay enough taxes, and neither do you.

      • http://read-write-blue.blogspot.com/ RWB

        You are welcome to pay extra taxes and to provide free services to the government.  You are also welcome to decline any government benifits you wish.  

        • Shag_Wevera

          Huh?

          • http://read-write-blue.blogspot.com/ RWB

            If you believe that the government can make better use of your resources than you can, you logically, should handover your resources to the government. 

    • notafeminista

      Hold on there – we’ve been told repeatedly that businesses aren’t people.  Can’t expect something that isn’t a person to have morals like you know…a person.

      Make up your mind.

      • Shag_Wevera

        Actually, the Supreme Court has determined that they are people, right?

        • notafeminista

          The Supreme Court did.  Are you saying you agree?

  • StilllHere

    It’s time for Carl Levin to retire, but at least he realizes it as well.  He has only himself to blame for the tax system he created during his long, long tenure.  Michigan, you can do much better.

  • http://read-write-blue.blogspot.com/ RWB

    FTA:
    “Tell me one of these politicians up here who doesn’t minimize their taxes,” Paul told the committee. “Tell me what Apple’s done that’s illegal… I’m offended by the spectacle of dragging in American companies for doing something that isn’t illegal.”

    http://rt.com/usa/rand-paul-apple-congress-595/

    • Shag_Wevera

      Legal and moral are not equal.

      • http://read-write-blue.blogspot.com/ RWB

        Please explain the moral justification for Apple to pay more taxes than they owe.

  • madnomad554

    The NFL rakes in $10 billion per year, yet it is tax exempt and has been since 1966.

    At least for those who own all 5 iPhones and I know there are many, at least you can catch your tax exempt game in the palm of your hands. Right?

    If there is going to be any complaint about the tax status of any corporation, then ALL need to be complained about, even the NFL. I wonder if there is just one diehard football fan willing to turn it off this fall, in protest of its tax free status?

    But for the diehard football fan, that would be sacriligious. “Not in my backyard” says the football fan.

    So I guess the whiners and complainers will cherry pick which billion dollar behemoths to complain about.  

  • adks12020

    Here’s the thing. What Apple, and many other corporations for that matter, are doing is certainly deplorable in the current economic climate. Heck, we all know the government needs money.

    However, in reality the people we need to blame for it sit in Congress. The U.S. tax laws are written in such a way as to allow this type of tax avoidance to occur. Congress needs to change the laws or shut up. Attempting to make an example of a corporation for doing something that, while slimy, is totally legal is ridiculous.

  • MadMarkTheCodeWarrior

    So if my business makes tens or hundreds of thousands of dollars in profit, I pay taxes for infrstructure, emergency services and other services that the USA affords me, like the protections of US legal system and our armed services, BUT, if my empire makes billions, even though use and benefit a thousand times more from those services, I can afford to buy loopholes for myself and yachting buddies so we pay zero taxes… Congressional ownership has its privileges.

    Congressional prostitution must have consequences… Seriously negative consequences.

  • donniethebrasco

    Apple, GE, all private equity firms, Monsanto, etc. got all of the tax havens they paid for.

    Senators and Congressmen would not get as much money for their campaigns if these companies paid their “fair share.”

    They are all lobbying (or extorting) Congress to reduce the tax rate in order to “repatriate” these earnings.  What they don’t understand is that keeping all of this money overseas hurts their potential customers.  Which hurts their revenues.

    They might be able to squeeze more profit out of their companies, but they won’t get substantial top line growth if they continue to pursue their “pennywise, pound foolish” tax management strategies.

  • http://read-write-blue.blogspot.com/ RWB

    FTA:
    McKinley provides a perspective that is unique among the books that I have read about the financial crisis.  Unlike works of pure journalism, McKinley situates the most recent financial crisis and bailouts within a historical pattern; unlike scholarly work, McKinley draws upon extensive information drawn from Freedom of Information Act requests and other primary research to provide direct evidence of the thought-processes of those acting during the financial crisis.  Throughout he weaves in the direct comments gleaned from the published memoirs and reporting on the government’s response to the financial crisis.  The book presents a real-time glimpse inside the corridors of power as government officials muddled their way through the financial crisis and its aftermath.

    http://www.libertylawsite.org/book-review/the-next-financial-crisis-what-will-the-markets-expect/

  • http://read-write-blue.blogspot.com/ RWB

    “I have never understood why it is “greed” to want to keep the money you have earned but not greed to want to take somebody else’s money.”

    Thomas Sowell,  Barbarians inside the Gates and Other Controversial Essays

    http://www.amazon.com/Barbarians-inside-Controversial-Essays-PUBLICATION/dp/081799582X

    • Shag_Wevera

      The money you have earned…  The answer to this insular smug quotation lies within these words.

      • http://read-write-blue.blogspot.com/ RWB

        Are you arguing that Apple did not earn the money  that was recorded as profit?  If so that would be a crime and would be illegal.

        • jefe68

          Not paying taxes is a crime.
          However they are just using the loopholes provided by our arcane corporate tax laws.

          If you believe that $22 billion was made in Ireland by Apple I have a bridge in Brooklyn you might be interested in.

          • http://read-write-blue.blogspot.com/ RWB

            But they were not brought before the committee because they broke any laws.  This is political theater.  This is an attempt to make voters believe that politicians are holding the rich and powerful to account.  This is an abuse of power exactly like the IRS mishandling Tea Party applications.  

          • John Cedar

            If you have information about where the $22 billion was really earned then why don’t you post it? But unless it was earned in the USA then it shouldn’t change their US tax liability. In fact, if they paid more taxes in other countries it could reduce their US tax burden.

            I think they testified under oath where their income originates, and that they did not transfer intellectual property out of the country.

            BTW…Obamakare-atosis has harsh penalties for failing the economic substance doctrine.

            It makes no economic sense to treat multinational companies as if they earned all of their income in the US and it isn’t fair either.

      • Ratsandwich

        You are definitely an unemployed hipster.  

  • donniethebrasco

    Harvard, MIT, etc. are also tax exempt.  Professors live in property tax exempt housing and take advantage of local services.

    University administrators also eat at tax-free on campus restaurants and have local caters feed them and don’t pay sales tax on these meals.

    Areas around universities are usually blighted.

    • Jasoturner

      Harvard Square is a disgrace.

      • http://read-write-blue.blogspot.com/ RWB

        I always liked the Plough & Stars. And that little cafe on Arrow Street.   

        • Jasoturner

          Yeah, I had some great nights at the Plough.

          I remember that cafe.  Halfway underground, with a few more tables outside.  Run by a little french lady, right?

          I miss the Tasty myself, and am still in mourning over Club Casablanca closing…

          • http://read-write-blue.blogspot.com/ RWB

            We should meet at the Plough for a pint and talk politics one afternoon.

          • Jasoturner

            On a nice day, the biergarten at Charlie’s is tough to beat…

        • Jasoturner
          • http://read-write-blue.blogspot.com/ RWB

            Yes, they make great chocolate mouse.

  • donniethebrasco

    Speaking of freedom of information, the State of Massachusetts refuses to provide the 10 largest balances on EBT cards.

    There are reports that some EBT cards have millions of dollars on them, but no one at the state will verify or deny these reports.

  • Andrew_MN

    How is this at all ‘slimy’ or reprehensible? No one, corporations included, has any duty to pay more in taxes than is legally required. Apple actually has a fiduciary duty to minimize their tax obligations and to maximize profits.

    What the senators are really up in arms about seems to the issue of Apple not wanting to repatriate these profits. Which would, of course, lead them to have to pay another 35% to the US Govt.

  • creaker

    This is the real failure of the IRS – why is Apple in front of Congress instead of auditors?

    It’s also the failure of Congress. Instead of grilling Apple, Congress could be working out agreements with countries like Ireland so that the shell game with taxes is not possible. But it’s probably too much to expect they’d actually be doing something about it.

    • jefe68

      Actually why is Congress not investigating itself. 
      They wrote the tax laws.

      • http://read-write-blue.blogspot.com/ RWB

        I think it could be an interesting use of RICO laws.

  • Nancyonguard

    What about foreign-based corporations with US subsidiaries? They must be shifting profits out of the US – profits that would never be repatriated via dividends – not with a foreign parent. What about the states – can’t they do something? What about worldwide combined reporting – a state developed method that was approved by the US Supreme Court in their Colgate-Palmolive and Barclays Bank decision by votes of 9-0 and 7-2!

  • madnomad554

    I wonder how many in Congress own an Apple product? What percentage of the mass consumer owns an Apple product, but take the shame on Apple position regarding these tax havens?

    They have billions because their product is mass consumed. How can one do there part in giving them billions of dollars and then turn around and complain their not paying their fair share.

    Shame on you for not paying your fair share, but hey, “when is iPhone 17 due out”?

    STOP GIVING THEM YOUR MONEY!!! Stop mass consuming the damn product.

    • http://www.facebook.com/drpmeade Paul S Meade

       You sort of beat me to the punch. This tax avoidance strategy has been employed by many businesses for many years.

      Methinks someone in Congress got screwed on an Apple product and want some form of retribution. Funny thing is that you can’t just single out Apple if you want to reform the system and fat chance of that happening considering how many other businesses do the same thing AND are lining the pockets of the politicians with the money they aren’t paying in taxes.

  • William

    GE paid nothing on it’s profits and for some reason they are not in the “hot seat”. 

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Really? You really got some blinders on to not have heard about GE’s situation. Liberals have covered it often.

      This is another thing which, coming from an honest broker, might have a point. But from you, I’m just waiting for the cavalcade of crap regarding NBC / MSNBC, a.k.a. the “liberal networks” which Joe Scarborough is somehow on three hours a day and have that hack David Gregory say “BothSidesDoIt” because he knows his job rides on promoting false equivalence.

      • William

         You ramble on like some deranged follower of Ted Kaczynski.

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          Pathetic. Your quiver’s empty, isn’t it?

          • Ratsandwich

            Dude. No quiver stuff OK? Don’t get all Elizabethan OK William Tell? There will be nothing covered on this show that we all don’t already know. Tax reform is needed; Won’t Happen. Govt. corrupted by lobbyists; No kidding… Whole show. 

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Look up mediascape and get back to us.

          • http://read-write-blue.blogspot.com/ RWB

            You should work for NPR.

        • http://read-write-blue.blogspot.com/ RWB

          I think you were a little harsh there.   

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Yeah, William really left a mark had me doubled over in laughter at him.

      • http://www.facebook.com/people/Joan-Marie-Davidson/1031260734 Joan Marie Davidson

        HUH? oh, that’s for folks who watch TV . It passed right over my head, sorry.

  • DrewInGeorgia

    An engineered feature does not a loophole make.
    We’re always getting mad at someone else because we shot ourselves in the foot.

  • RolloMartins

    There are no large American corporations. They are international. The rest is all theater.

  • WorriedfortheCountry

    Rand Paul had it exactly right.  It is outrageous that Congress dragged the CEO of a major company into the hot seat when they’ve simply followed the law.  It is Congress itself that should be on the witness stand since they created the law.

    • OnPointComments

      I agree.
       
      I find it perplexing that so many direct their ire at Apple, or GE, or other companies, or for that matter “rich people.”  Congress passed the laws, not the companies.  The ultimate in hypocrisy is listening to members of Congress scold Apple for daring to comply with the laws that Congress passed.
       
      “Frankly, I’m offended by the tone and tenor of this hearing. I’m offended by a $4 trillion government bullying, berating, and badgering one of America’s greatest success stories … If anyone should be on trial here, it should be Congress. I frankly think the committee should apologize to Apple. I think Congress should be on trial here for creating a bizarre and byzantine tax code that runs into the tens of thousands of pages, for creating a tax code that simply doesn’t compete with the rest of the world.”  –Senator Rand Paul

      • sickofthechit

         So when Apple, GE, or the wealthy use their wealth and their power and
        well paid lobbyist to make changes in the tax law that benefit them and
        as a result the rest of us either see a drop in government services or
        an increase in our own taxes how is that fair?  How is that
        sustainable?  How long can civil unrest be put off? charles a. bowsher

    • sickofthechit

       So when Apple, GE, or the wealthy use their wealth and their power and well paid lobbyist to make changes in the tax law that benefit them and as a result the rest of us either see a drop in government services or an increase in our own taxes how is that fair?  How is that sustainable?  How long can civil unrest be put off?

    • Roy Merritt

      And I’d like to see Paul and his father in the docket with the rest of them.  The very idea that these two are doctors is disgraceful considering the father once insisting he’d let a man die if he had no insurance.  But what was even more disgusting was the response from the Republican audience of Tea Partiers who applauded it.  And I would wager most of them were people who go around screaming about the govt. keeping its hands off of their medicare indicating they are totally ignorant of the notion that medicare is a govt. policy.  

  • Jasoturner

    Man, talk about a red herring.  Apple played by the rules and saved a boatload of money.  It isn’t about Apple.  It’s about the rules.  Hey congress, we’re not that stupid, and we know who made the rules…

    • http://read-write-blue.blogspot.com/ RWB

      Maybe not all of us, but too many for them to keep getting awaywith it.

  • Anthony Austin

    There are no such things as “taking advantage of tax loopholes”, “tax minimization strategies”, “using technicalities to reduce taxes” and other similar pejorative terms for any legal tax activity. There is simply paying the taxes you owe, or overpaying. The tax code is law and it is not criminal to understand and follow the law as written. If our government is counting on companies and citizens to overpay their taxes based on not understanding the law, there is a very clear problem in our tax code. Which, of course there is.

    • http://www.facebook.com/NewtonsBob Bob Kavanagh

      Why are the rules the way they are? Does Congress write them with no input from international corporations?

      • http://www.facebook.com/people/Joan-Marie-Davidson/1031260734 Joan Marie Davidson

        Ha ha.  HA!

      • Anthony Austin

        Congress wrote the rules the way they are because Congress and the Office of the President are venal.

        • http://www.facebook.com/NewtonsBob Bob Kavanagh

          Did the corporations who use these laws unduly influence Congress to pass these laws? Do corporations have more influence then ordinary citizens in writing tax laws?

  • Steve__T

    General Electric spent $235.2 million in political money since 2000 paid no federal income taxes in 2008, 2009, and 2010 G.E. has targeted contributions to members of the congressional committees responsible for tax policy.

    Apple has only made one political contribution in the entire year of 2012, so far.

    • StilllHere

      What is political money?  Federal, state, city, county, muni?  What country?  How much did they give to charity over the same period in cash, equipment and employee time?

      2012 is over, check the calendar.

  • Elizabeth_in_RI

    Wow- Apple claims they played by the rules – but forgets to mention that they and their corporate brethren essentially WRITE THE TAX LAWS through their high priced lobbyists. And since they all have also basically bought Congress we all are left holding the bag – again. It’s actually interesting that Congress is trying to shine a light on this – maybe it’s time for we the people to stand up…

    • Steve__T

       If they had bought congress like other large corps, they wouldn’t be in the hot seat.

  • Ratsandwich

    Apple juice. 

  • geraldfnord

    Large corporations owe the Government NOTHING—it’s not as if they were in any way actually creations of government. (The amazing superpower known as ‘limited liability’, which is government’s way of saying ‘Beyond a limited point, we will not use State violence or countenance individual violence to collect from you your debts and damages’  is just a right bestowed by God on His Elect…after all, your ‘individual responsibility’ ends where the individual created by the State’s begins.)

  • toc1234

    Why didn’t Levin bring in Jack “I know nothing” Lew to give his personal experiences with tax havens?

    • geraldfnord

      If Mr Lew has in fact used tax-havens, then I am gladdened—one of the smartest things Reagan’s Favorite President did was to bring in one Joseph Kennedy, a man who knew exactly the legal limits of all one could do untowardly on Wall Street, to rein-in those limits.

      (And if Mr Lew had been in a position to have known what was going on, he and his administration would have had to indulged in a level of micro-management of employees that were itself bad governance—though he and they should have been aware of the inadequacy of the agency’s staffing, and fought harder for more funding to correct that, since that certainly would have been a popular move that would have made it through the House with ease.)

    • StilllHere

      The other “I know nothing” Jack will be here on Friday.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    Can Rand Paul squeeze “American” into that speech one more time?

    I mean, he must be bright enough to realize that Apple is pushing taxable income made in the US to places that don’t tax it.

  • http://www.facebook.com/profile.php?id=100000753377770 Joachim Kriegel

    While the average citizen and small corporations pay their taxes, they are paying for these greedy companies like Apple. To pay the outrageous salaries to their executives and of course so called “Tax Transfer Accountants” to show them how they get around paying any taxes, those crazy Politicians seem outraged but unable to make tax laws that are fair. The craziest thing I heard from Cook is to say that should create tax laws that brings those sheltered funds back to the U.S. They should pay dearly like everybody else taxes and if necessary import duties on I-stuff that is produced overseas and not taxed in the US

  • http://www.facebook.com/people/Joan-Marie-Davidson/1031260734 Joan Marie Davidson

    Here goes McCain again, full of hot air and ignorance.
     Congress—little men who are making busywork at our expense with their hearings that lead to naught. Hey Congress, of you don’t like it why not change the laws?Oh, becauser they make such big contributions to your re-election? oh…I get it.

  • George_Dedham_MA

    If you want the rules to be fair then get the big money donors out of politics. Otherwise don’t complain.  The big money get congress to make the rules the way they want. Don’t criticize people for following inane arbitrary rules specifically written to get rich donors what they want.  All this is really ONE ISSUE big money donors so politicians are in their pockets.

    • Elizabeth_in_RI

      Great idea – but how do we do that when the people who benefit the most are the ones that need to change the laws? And now even the supposedly nonpartisan Supreme Court has bought in to supporting the current corrupt system with the insane concept that corporations are people too. How do we stand up to a system that designed to keep us down. Remember the Occupy movement and how many “upstanding” put them down?

    • George_Dedham_MA

      I wish I knew. Hope people become better educated and that they then vote for legislators not in the pockets of big corporations – unfortunately most people vote against their own (and our) interest.

  • DrewInGeorgia

    What’s the annual total bill for IRS operations, tax related accountants and CPAs, and last but certainly not least, related attorney fees and litigation costs?

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Good question.

      On the one hand, a big corporation sees the expense of X million dollars in tax attorneys as an investment (such as lobbying).

      On the other hand, some people have the bright idea that cutting the IRS’s budget government’s accounts receivable department is a step towards collect taxes fairly, completely, and properly.

  • toc1234

    does Jesse know how much Levin receives in campaign contributions from the accountants/lawyers lobby?  probably the more pages Levin adds to the tax code, the more cash he gets…

  • Yar

    Money is not wealth, it is only an indicator, paper wealth is not real, it isn’t even on paper.  It is a number inside another number; the balance in an account; a few bytes in a computer file.  It is a promise and it is a false promise.  If the very rich actually tried to consume their paper wealth, they would find it isn’t real, and the world would also turn on them through revolution.  Inflation is a tax, and inflation will cause free flow of capital back to the US.  The whole world is saturated with our currency.  
    The best tax would be a minimum wage indexed to the cost of energy.  Better than a gold standard, a energy standard built from the bottom up.  Economists don’t want to understand, because they have their own ax to grind.

    • http://read-write-blue.blogspot.com/ RWB

      Intriguing.  How would that work 1 person-hour = 10 ENG Dollars?  Please explain.

  • MadMarkTheCodeWarrior

    There they go again… Using the code words ‘revenue neutral’ in the same sentence as closing loopholes in the tax code… In other words ya, we’re dodging taxes but legally so, and we don’t want to pay a dime more so rewrite the codes in our favor so we can layoff our financial engineers, accountants and tax lawyers that we use to figure out these loopholes and be even more profitable.

  • mochajava13

    Apple and other companies make their money because of the intellectual property rights afforded to them through our government, paid for by tax dollars. The US patent office (where Apple files its patents), the federal courts (where Apple asked the US government to enforce these IP rights) are all provided by the government. Want to have these IP rights? Pay up and stop using tax loopholes to dodge paying a fair share.

    • http://read-write-blue.blogspot.com/ RWB

      You have a basic misunderstanding of the word rights.  In the American system rights are preexisting of government action.  They are not contingent on paying taxes.

  • Ellen Dibble

    Thanks for this show.  For a long time, since the bubble burst in 2008/09 and the beginning of Republican cries for small government and paying down the national debt (not by taxes but somehow else) — all that time, we hear that our welfare depends on minimal taxes for corporations, Or Else, those corporations will go locate on Bermuda, or Ireland.  I’m sick of those arguments.  Our town gives a tax break in order to bring new jobs, and then it falls to homeowners (and renters, through rent) to pay higher taxes to cover the needs of that employer.
         Going global, multinational corporations might want to consider bang for the buck.  Are they paying for the enormous bounty of systems and skills that Ireland is bestowing on them? What does Christine Lagarde think of that?

  • Boca Ratso

    The point not being discussed–Corporations write the tax loopholes for Congress!  They get Reps to attach tax breaks.
    Now, the Corporados are saying “It’s Congress’s fault.
    Hasn’t Silicon Valley spent hundreds of millions on lobbiests?

     

  • Ratsandwich

    I am really hoping this drives down the stock so I can buy some before it shoots back up. 

    • BHA_in_Vermont

       No hurry, it is still on the way down. Give it a few more months.

      I’d rather they lower the price of their products so I could afford to buy some ;)

  • bsorcs

    To perhaps interject some balance, might it be relevant to mention the taxes paid or ‘accountingly avoided’ by entities such as Citibank et al, Chevron/Texacoet al, Goldman et al, GE et al, Ford et al, Microsoft, Google…the list goes on?,

  • toc1234

    did Ed just say that congress should be worried about Apple not paying enough taxes to other countries??

  • InsideJoke3

    Many economists will tell you that corporations do not really pay taxes.  Ultimately, they are paid by customers (as higher prices), shareholders (as lower dividends and capital gains), and employees (as lower wages).   

  • Boca Ratso

     Corporations pay little or no taxes..now they tell us they’d pay…IF taxes were lowered to zero!  Huh?

  • dockovich

    Two things: 

    1. The profits that Apple aren’t paying taxes on are earned abroad and shielded from foreign markets like the UK as a result of EU member country agreement. The US is getting their fair share of taxes on US profits, and they’ll get another bite at the apple (pun intended) if the profits are repatriated. For now, UK and other large Euro markets have a much bigger gripe.

    2. Lost in this “bottom line” debate is the pure amount of public wealth and revenue generated by corporations. Constantly buying, selling, creating millions of economic transactions that are all taxed by the US including compensation payments to thousands of employees and owners. They, and other large corporations, have made our citizens and government richer through the way we all want–with innovation and success in the free market system. The bottom line debate misses the point. 

  • Markus6

    GE and Apple are wonderful attention getters, but aren’t representative of most of the companies doing work internationally. My company would be at a significant disadvantage competitively if we paid the US corporate tax on all revenue. So, we take advantage of the code where we can. 

    • Tyranipocrit

       then it stands to reason that the biggest MUSt be taxed severely so smaller companies are obliged to pay taxes and the rules and can compete–thats why we have laws and live in a society.  You make excuses that prolong the problem. You are part of the problem.  make the big companies accountable.

  • MadMarkTheCodeWarrior

    Why don’t we shame Congress for prostituting itself and doing nothing for the fiscal health of the country… They have plenty of time to take meetings with K-street and write and pass loopholes for their friends with money but god forbid they should close a single loophole! Shame on them!!!

  • http://www.facebook.com/theodore.blood Theodore Blood

    The big corporations in our country are sending an unequivocal message to citizens: It’s okay to follow the letter of the law but not its spirit if it satisfies their greed. The common good is irrelevant. The fact that average taxpayers will need to make up the difference isn’t important. All that counts is that they can  keep billions more than they already are. If the rich and powerful aren’t doing the right thing, why should the rest of us?

  • BHA_in_Vermont

    The rich and powerful have the money.
    The rich and powerful make the rules.
    The rich and powerful make rules that allow them to legally avoid taxes.
    The rich and powerful have lawyers to get around rules that do not benefit them.

    The rest of us just pay.

  • Omaha Guy

    1.  Other countries also have tax deductions.  They get good things we get bad things.

         a.  If an Apple Store in Berlin builds a renewable energy lab for the local technical high school… tax deduction.

         b.  When Apple has expenses for moving jobs from California to China… tax deduction.

    2.   Physical money should have an expiration date.  When it is in a bank in the continental USA, it can be easily renewed for the small cost of re-printing. 

        a.  When money has to come back to be renewed, it has to be reported as income by somebody, and taxed.

  • Scott B

    This isn’t just Apple. Not even close :Amazon, Google, and many many others use this scheme to pull what’s commonly known as “The Irish” in business.  Learned that right here on NPR.

    If they do business here, they should pay taxes here.

    Listening to Apple say they pay every penny they owe is exactly the same as when Mitt Romney was saying he paid all the taxes he owed and not a penny more. True, but that was only on the money he didn’t have squirreled away in the Caribbean and Switzerland, and even then it was still an 11% effective rate.

    Some business leaders have suggested, off the record, that they’d be willing to pay higher persona taxes if the taxes on business was lowered.  But then we’re back to the Mitt Romney issue of them stashing it all over creation.

    • BHA_in_Vermont

       ”Some business leaders have suggested, off the record, that they’d be
      willing to pay higher personal taxes if the taxes on business was
      lowered. ”

      Those would have to be people who OWN the business. I seriously doubt any Fortune 500 CEO would agree to higher taxes on their personal income if their company paid lower taxes.

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        “People who own the business” puts us back into the definitions and misconceptions of what is and is not a “small business”, in number of employees, gross revenue, etc.

        Of course, that sounds like a whole show on its own.

  • DrewInGeorgia

    Exactly Tom, we keep hearing 35%. Nobody (since Companies are people too) actually pays it.

    • StilllHere

      Wrong, they all pay 35%; it’s 35% of what is the question.

  • MadMarkTheCodeWarrior

    Right now, does this money have anything to do with their competitiveness? If they’re keeping it in a mattress in Ireland, they’re not using it for anything…

    And please stop disingenuously speaking of lowering our corporate tax rate when we have one of the lowest effective corporate tax rates in the world among industrialized nations.

    • Davesix6

      A World Bank study of corporate income taxes in 185 countries for 2013 finds that cash tax payments are higher for companies operating in the United States as a percentage of income than the average of other OECD and non-OECD countries.
       The U.S. cash effective tax rate (ETR) of 27.6 percent is more than 12 percentage points higher than the average of other OECD countries and 11 percentage points higher than the average of non-OECD countries. 
       The U.S. cash effective tax rate is the highest in the G-7 and the second highest in the OECD after New Zealand.

      Bussness Rountable
      -Published: April 24, 2013 http://businessroundtable.org/news-center/bottom-line-u.s.-effective-corporate-tax-rates-rank-among-the-highest/

  • DrewInGeorgia

    We haven’t created a monster, we ARE a monster.
    Now what are we going to do about it caller?

  • MadMarkTheCodeWarrior

    Flat taxes in practice hurt the lower and modest income earners and benefit the wealthy. So look at who advocates flat taxes before supporting it.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    I was going to say something about how flat taxes are a sham “compromise”, because some corporate tax lawyer wants ordinary citizens to feel so helpless that the flat tax seems like the only improvement that will ever get any traction.

    But the guest (Kleinbard?) just said “Herman Cain’s 9-9-9″, and made the point succinctly.

  • gonzo

    Piffle.  Yes, there is moral indignation, but start with the fact that corporation exist for the sole purpose of creating profits.  Do I agree with this? No, but it is the truth.  Apple is just doing what it is suopposed to do.  The issue then becomes should we/how do we rein in corporatiions to serve citizens.  And what the heck are our representatives doing to protect us and ensure “equality” (what ever that means) when they can not get re-elected without groveling at the feet of corporate entities.  we have money changers in the temple and that is what we are willing to accept.

    • notafeminista

      Apple served its CUSTOMERS (and quite ably from the sounds of it).  Apple does not exist to serve all citizens comrade, only those who wish to use its goods and/or services.  Hence the phrase “mutually beneficial relationship.”  Apple just benefited more than some thought it should (never mind that NONE of those have anything to do with the operation of Apple) and decided it was time to “make them pay.”

  • John Cedar

     If you don’t agree that corporations are people then that is fine. you could even tell us what you think they are, if not a collection of people? But to call the concept insane is not an argument in your favor.

    I agree that eveil corporations are a big problem. Such as ACORN incorporated or New York Communities For Change.
    They result in $800 billion “stimulus” spending on themselves within weeks of their guy taking office.
    Then you have the DOE forecast to earn $51 billion from student loans. But unlike Apple, they don’t produce a good product.

    • Tyranipocrit

       according to your reasoning, a slave-plantation is a person.  Afterall–it is a collection of people.  is a nation a person.  Do you understand english or basic human concepts.  A group of people is not a person.  Sounds like communist collectivism to me–we are one we are the borg we are person.  Enough of your BS propaganda all ready.  sit down joker.

    • sickofthechit

       The $800 billion dollar “Stimulus” you are still upset about was split into three parts.  One third of it went to continue funding the “temporary” bush tax cuts, one third went to help out state budgets for teachers, fireman and police, and the last third went to actual stimulus projects.  You have been told  a lie so may times you believe it is the truth.  Please do yourself and others a favor and find other info sources than Faux news or Rush.

  • John Cedar

     Doubt the money is in a mattress. The money is “working” for someone somewhere.

  • TheDailyBuzzherd

    Ethics 101 Thought of the Day:

    Just because something is legal, doesn’t mean you should do it.

    After all, slavery was legal once. The fact that corporate governance is stocked with a gauntlet of legal council speaks volumes. Actions by today’s international corporations of all stripes are in direct challenge and denial of classic ethical theory.

    • John Cedar

      Slavery and taxes? Or are you talking about the 39%++ of my income they take in taxes is akin to slavery?

      • StilllHere

        Sounds like slavery to me.

      • sickofthechit

         Sorry, no sympathy from me for anyone in the 39% tax bracket.  charles a. bowsher

  • John Cedar

     Not only do companies actually pay it but then the stockholders pay on the dividends again. and then the estate pays a third time. Throwing out terms like “effective rate” is naive voodoo accounting..

  • WorriedfortheCountry

    Now we have a top IRS official taking the 5th to avoid congressional testimony.  Time is overdue for tax reform.  The code is 70K pages today.  Let’s make a goal of reform simplification.  Simplification that dramatically reduces the $billions in compliance costs.  Can we even dream of simplification and reform that allows the elimination of the IRS?  Maybe elimination of the IRS should be a goal of tax  reform.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Can we even dream of simplification and reform that allows the
      elimination of the IRS?  Maybe elimination of the IRS should be a goal
      of tax  reform.

      When you say that, I think, “Let’s eliminate all the police cars and let people write their own tickets for violations and accidents”.

      You’ve got bad dreams. And that’s even without the idea that any combination of right-wingers and mushy-mouthed-moderates who’re going to “reform” anything are not to be trusted.

    • TheDailyBuzzherd

      I agree the tax code is beyond complicated.

      “Any fool can make something complicated. It takes genius to make something simple.”

      The dumbest aspect to the code is how we pay them to process our returns only to have them pay us back in the form of refunds. What. Is. That. If Unca Sam wants to tax us, FINE, but just tell us exactly what we owe and KEEP it instead of wasting our money doing things backwards.

      Look at the code this way: When software companies realize their code is outdated and writing atop old code doesn’t cut the cheese anymore, they start from scratch. Time to put all the accountants and tax attorneys to real work and craft a permanent solution that is fair and realistic.

      Yeah, I know. Good Luck.

    • StilllHere

      It’s hard to believe anyone in the government would have to worry about incriminating themselves.  They are all angels.  If only more people could work for the government.

  • 2Gary2

    All corporations are tax cheating scum.  Simply look at the % of government funding  corporate taxes paid in the past and the % they pay now.  Case closed.   All the cash wasted on 8 and 9 figure CEO salaries, not to mention all the VP d-bags under the CEO making a ton of money.  Corporations have a ton of money that the gov needs to take and redistribute to the people.  Corporations have been under paying people for years–Where are my productivity gains increase?  In some a-hole CEO pocket.

    • donniethebrasco

      Do you “work” for the government or get government assistance?

      My mistake, do you have a government job?  “work for the government” – that never happens.

      • StilllHere

        Only the rest of us work for the government.

  • Trond33

    A lot of this is media frenzy.  Apple is a US corporation, but does it have the responsibility to pay US taxes on products manufactured and purchased in foreign markets?  

    In the 1990s, the US government (Ex-Im Bank and US Department of Commerce) and large banks used to host seminars around the US to teach US companies how they could use off shore banking in locations such as the Cayman Islands to keep from repatriating earnings made overseas.  I always thought this was highly immoral, as these goods were manufactured in the US and exported for sale overseas.  The US does have a right to tax those profits, yet here the US government was teaching SMEs how to dodge their tax responsibilities.  

    • Trond33

      Of course, the real issue here is the involvement large corporations have in writing tax codes and regulations.  It is easy to comply with tax laws when you have a hand in writing those laws.  Corporations are serving their own self-interest.  The moral breakdown is with Congress failing to uphold their oath to The People in deference to the moneymen pulling their strings. 

      • twenty_niner

        Not as easy is that. Ireland offered Apple low tax rates in the 90s to attract investment. The landscape is global now; a company can pick up its ball and go elsewhere.

        • John Cedar

          In the David Cay Johnston book “Perfectly legal”, the thing that sticks out the most is that…half of it is not perfectly legal.

          • StilllHere

            I wouldn’t trust Johnston’s judgment on what is legal.

  • phever

    This is why we shouldn’t be taxing businesses or, economic activity. We should tax only personal income which is the only true measure of how well you are doing. If a business owner wants to keep his profits as retained earnings or reinvest in his business then we should not tax those profits. If however, he takes it in income (i.e. outrageous CEO salaries) then he pays a flat percentage tax and so do all of the employees as well as everybody else.

    • andic_epipedon

      I like the logic you are bringing to the table. A business can’t really spend any money that doesn’t go back into the company unless they give it to shareholders or employees.  My concern is that CEO’s and others will find a way to hide all their income within the corporation.  I don’t know how you prevent that.
        I can’t go there with you on a flat tax structure for everyone unless you don’t tax anyone that makes less than 500,000 a year.  Flat tax structures invariably make it difficult for people to pursue life, liberty and property.  The first tax structure in the US only included the rich because they knew that it would be hard for the average person to be able to get a leg up with taxes. 

  • kjsch

    Talk about how these large companies influenced the writing the tax code that is so much to their advantage, mostly through so
    much complexity that they are unfathomable, ineffective.

    • harverdphd

      Here’s a quarter…call the president…

  • StilllHere

    Ireland got the idea to be a tax haven from the US, as part of its WWII reconstruction effort.

    Apple sells its products in over 100 countries.

    • Tyranipocrit

       apple sucks

  • bmj789

    You should do a show about the new report from Harvard on the conflict along the Sudan-South Sudan border: http://hhi.harvard.edu/sites/default/files/publications/Sudan%20Anatomy%20of%20a%20Conflict_Signal%20(1).pdf

  • andic_epipedon

    It’s unfortunate we are moving towards this Orwellian future where the Corporation has all the power.  It’s going to take an immense effort to change this as the corporations are so deeply entrenched.

    • harverdphd

      “…immense effort…”    Yar…you listening?

  • TomK_in_Boston

    What can you say? This is all about the “unwinding” from yesterday. American corporations used to be American, distributing wealth in America as wages, benefits, R&D, reinvestment, taxes etc. Now they’re internationalist organizations with internationalist executives who see all the above as burdens to be minimized. I don’t care how it’s done, but I’m in favor of anything that collects more of their profits as taxes and anything that discourages offshoring.

    The low-information faux and rush types actually think the poor corps (and the poor 1%) are way over burdened with taxes, and atlas is gonna shrug any day. That is false. Here are 2 useful charts below. Remember, profits are at record highs now. We’ll keep “unwinding” if we keep asking less of those who should be giving back to the USA. 

    “Shared sacrifice”, anyone, or is that only when they want to cut SS and medicare.

    http://cloudfront.mediamatters.org/static/images/item/corp-taxrate.JPG

    http://cloudfront.mediamatters.org/static/images/item/corptax-percentage.JPG 

    • harverdphd

       Of course you don’t care how it’s done…you’re hardly more than a bolshevik retread out of useful ideas.

      “Hyper-partisanship makes people stupid.”  – MadMarkTheCodeWarrior  – 05/02/13

      • Tyranipocrit

         tarded troll

      • StilllHere

        So true.

      • TomK_in_Boston

        Not a good advertisement for harverd community college.

  • Tyranipocrit

    understood.  but then why do we allow such monstrous entities to exist?  They are anti-soceity, they are destructive, they are our undoing–and those who enter such fascist regimes are part of the problem.  Why would someone voluntarily enter a fascist regime designed to destroy the fabric of society?  We the people have a duty and responsibility to obliterate them. The congress is them-and cannot be trusted or counted on.  The congress must be obliterated.  We need a constitutional convention.  Ending the corporation and enacting earth first laws into constitution. 

    • Gcrea

      T – From your comments, you seem to be both anti-government and anti-capitalism, so I’m not really sure how to respond.  I obviously dont know you personally, but in my experience, people who are anti-everything are generally just unhappy with the way their lives in progressing.  There is nothing inherently wrong for wanting to “change the world”, but to get anything “real” accomplished, you need to operate within its confines.  Otherwise, you just end up like the driftless the Occupy movement.  One man’s view.

      • Tyranipocrit

        you dont understand capitalism. ok–so u want to attack my happiness now–u know nothing john snw.  corporatism and free trade is not th eonly form of capitlism.  But i see what you are doing here–a common tactic of the uneducated as well as fascist disciples who rush to be a part of fascist organizations without ever thinking or considering ther mght be another way–and then selfishly violently defending that ridiculous cruel way of life.  I feel sorry for you.  I am not the one unahppy.

        being against corporate capitalism and corruption is not anti-everything–get a grip joker!!!

  • Tyranipocrit

    corporatins are a drain on the economy.  corporations are welfare-queens.  We need to to implement austerity.  its time to stop the state-socialism of corporate welfare.  

  • Tyranipocrit

    tim crook

  • Walt Bogner

    What is the difference between what Apple is doing and those like Mitt Romney? Where is ethics more important – in corporations or presidential candidates?? Where was the outrage when it became known that a presidential candidate was keeping tax-free cash off shore??

    • StilllHere

      It wasn’t tax free, get your facts straight.

  • John Cedar

    Yeah…jokers like me…
    and the SCOTUS

  • 1Brett1

    These large corporations claim they would bring more of their business back to being based in the US if tax codes were simplified and they could have a lower corporate tax rate….Sounds as though Apple is now paying nothing in some circumstances, and as little as 2% in others. 

    So, do they really expect people to believe US corporate tax rates will come all the way down to benefit these corporations in the way they benefit from their tax haven shell game now? If the US corporate tax rates are lowered considerably (although they would still reasonably be higher than these companies enjoy now) but offshore tax havens/loopholes were stopped, would these corporations expect people to believe they prefer that to what they have now (which is pretty gravy)? 

    Let’s give them a much lower corporate tax rate but close the tax haven shell game…yeah, sure, they won’t go for any deal the us would make to ease their tax “burdens,” even if their rates were zero in the US. 

    If tax laws change to benefit smaller companies based solely in the US, competition would increase. But I doubt, if that were to happen, anyone should be holding their breath waiting for large global companies to do anything any differently to benefit the US than they do now, even if their tax rates were zero.

    The US tax codes should be changed to give incentive to smaller companies that are based solely in the US, but we don’t need to give large global companies any breaks; in fact, the practice of tax havens should be limited…they’ll be fine.

    • HonestDebate1

      I disagree but I won’t quibble so I’ll ask it this way: Does the fact that Americas’s corporate tax rate is among the highest on the planet help matters?

      • Mike_Card

        Depends on whether you’re talking about marginal, stated, or effective tax rates.  Income taxes are visible and seemingly understandable, but they’re hardly the only drivers of corporate actions.

        This stuff doesn’t just happen–lobbyists exist for a very fundamental economic reason.

        • HonestDebate1

          Fair enough but doesn’t it work both ways? In other words, if lowering them won’t necessarily help then raising them won’t automatically help either. I understand that no one is advocating raising the corporate tax rate but they are complaining Apple is not paying enough despite their compliance with the law. It’s a distinction without much of a difference. Wouldn’t it be better to focus on jobs so even if the corporations don’t pay higher taxes they are keeping gazillions of taxpayers (aka employees) in this country?  Is that best accomplished by haranguing the employer? I don’t think so. 

          • 1Brett1

            Would corporations like Apple create  gazillions of jobs if their tax rates were reduced? There’s no proof you can provide that would indicated such. If, due to Apple utilizing tax havens pays somewhere around 2% in taxes now would they suddenly create jobs for Americans if the US dropped its corporate tax rate to 25%? 15%? 10%? 5%? Zero (considering labor is cheaper in other countries)? 

          • HonestDebate1

            I don’t know about “create” but more might stay here.

            “Little or no taxes for corporations plus allowing them to have all of the tax havens they want?”

            Who suggested that?

          • 1Brett1

            That’s what large corporations like Apple have now.

          • HonestDebate1

            No, America’s corporate rates are among the highest on the planet. That may be offset by loopholes (AKA the law) but they don’t have both.

          • 1Brett1

            Except that large corporations with offshore tax havens don’t pay much of that “highest on the planet” stuff. 

      • 1Brett1

        I didn’t say that taxes for businesses should not be lowered, but how low should they be? How many tax havens should they be allowed to have?

        In fact, I said competition for smaller businesses would increase if taxes were lowered and the tax rates were simplified (for smaller businesses); this could especially be an incentive for companies who keep their operations in the US. 

        There is a big lie, however, that large global corporations would base their operations in the US if corporate tax rates were lowered. Considering many are paying very little, percentage-wise, now, it would take the US not having any corporate taxes for them to bring their operations home; and, then, because there is cheap production labor in third-world countries, large corporations would clamor to have minimum wage abolished before they’d bring their operations home…on and on.

        I don’t even think tax havens should be absolutely prevented/stopped, just limited.

        Apple has no intention of changing the way it conducts its business, no matter what the US tax rates are.

        • HonestDebate1

          I was very carful to not put words in your mouth. Mike Card make a good point below. But the fact remains, America’s corporate tax rate is among the highest in the world. I just think we should not be hostile to business.

          • 1Brett1

            Thanks, Gregg, for not putting words in my mouth.

          • HonestDebate1

            But dragging the CEO into hearings when no laws were broken is.

          • 1Brett1

            Well, we could agree that this political circus/theatre of a hearing isn’t going to be the best way to get at this…I don’t know, do congressional conservatives have an investment in introducing legislation that would limit tax havens while lowering corporate tax rates (which would actually make a company like Apple pay more than they do now by not allowing their shell games with offshore havens)? It seems their only interest would be to lower corporate tax rates in the US, which in my view would not be enough in and of itself to entice companies to keep operations in this country.

      • TomK_in_Boston

        I assume you know that the effective, vs statutory, corporate rate is on the low side.

        http://thinkprogress.org/wp-content/uploads/2012/02/corporatetaxcharts0222.png

        What difference does it make if the nominal rate is high if there are so many loopholes you don’t have to pay it?

        One answer is that small companies can’t do all the tricks as well as big companies, putting them at a relative disadvantage. I’d be happy to see that fixed. 

        • 1Brett1

          “One answer is that small companies can’t do all the tricks as well as big companies, putting them at a relative disadvantage. I’d be happy to see that fixed.”

          I agree with that whole-heartedly, Tom, and that would be a good place to start with some bipartisanship effort. But, necons don’t want to have a conversation; they don’t want to work with any viewpoints that they can’t build a straw man over and knock down. Your sentiment here is perfectly reasonable. 

    • ExcellentNews

      You are thinking too much! You need to watch some Fox News and some Republican debates. This will take care of that pesky thing called logic….

  • MadMarkTheCodeWarrior

    A hundred billion here, a hundred billion there… pretty soon you’re talking about real money.

  • sickofthechit

    Apple is rotten!

    Boycott Apple now!

    charles a. bowsher

    • HonestDebate1

      I’m not with you, sorry. (Posted from a MacbookPro)

  • ExcellentNews

    Here is the real “everything we do” statement of Apple:

    1) Everything we do is based on technology funded by the US taxpayer and US government.

    2) Everything we earn comes from the US and other Western-style democracies.

    3) Everything we make comes from slave-labor countries with no human rights and environmental standards.

    4) Everything we pay back (zero) is based on laws written by corporate shills in Congress.

    BTW, if you think this is unfair beating of Apple, keep in mind that every large corporation does the same thing.

    If we the people allow this to continue, we deserve to become like the peons in the third world who make the Apple products.

  • http://www.facebook.com/jack.modelia Jack Modelia

    In the case of Apple, one can argue whether the techniques it put together in 1980 (when international sales of any kind were miniscule) are valid forms of tax avoidance.  My guess is that members of the EU and other countries should and do have a bigger beef then the US does with respect to sales of products outside of the US.

    I can’t believe this, but this particular program was very poorly put
    together, with no context provided for what Apple and other companies
    do, by truly considering US tax law as compared to those of countries
    around the world.  It was cursorily pointed out that unlike most of the world, the US looks to tax on where profit is earned (based on where value is created) vs. looking at where the sale occurred.

    Since Apple is primarily a hardware company, it is fairly easy to calculate where a sale occurs, and since 2007 when the iPhone was introduced, increasingly Apple’s sales are primarily international (roughly 2/3 of the total). For all sales in the US (and the rest of the Americas), Apple pays the US rate, which is how they come up with the roughly 30.5% effective rate. 

    For international sales, the US would like to still tax that at 35% (less any credit for taxes paid to foreign countries… which for many multinationals is low due to Irish holding companies, etc.)  Well, most countries around the world do not tax income based on sales outside the home country (including many EU members, Japan, etc..).

    So Apple keeps that money abroad so to speak, in order to avoid a 35% tax on earnings from sales abroad.  As an example, the biggest competitor to Apple by far is Samsung, a company whose ruthless tactics in its home country and internationally over decades have been well documented (and a company if had been incorporated in the US would long have been broken up by antitrust authorities.)  Samsung does not get taxed at home for any sales in the US. As an aside, one might argue that for Samsung, value is created in Korea, so they should not pay any US taxes on profits from sales in the US, since it could be argued that profit was earned in Korea.

    So, after all these tax avoidance methods, Apple’s worldwide effective rate of income tax is very comparable to Samsung’s effective worldwide rate.  One might say that if Apple were forced to bring its foreign income earned home at a 35% tax rate, it would be at a competitive disadvantage to a foreign company, one who just got pentagon clearance by the way. Oh, and compared to a foreign company, the vast majority of Apple employees are in the US, and they live, consume, and pay taxes… in the US.

    We have a 20th century tax system that was based on the way the world looked in the 19th century now trying to be applied to the world as it is in the 21st century.  Closing a few loopholes without fixing the tax code overall may increase short term tax revenue from corporations, but it may have long term negative economic consequences. I can’t see why rates cannot be dropped to a lower number (e.g. 25%), all loopholes closed, and have a permanent repatriation rate (e.g. 7-8%). 

    • StilllHere

      You make way too much sense.

      • John Cedar

        Not the part where he thinks the US would have broken up any company for antitrust. When was the last time an 800 pound gorilla was reminded that the biggest gorilla  on record was only 600 pounds? Laissez faire is everywhere.

        In order to shift earnings, you must do inter-company transactions. The IRS can scrutinize any inter-company transaction they wish. They could argue with Apple that they are not charging a subsidiary enough for intellectual property or license, if they so desired. But there is not much time for that when you are busy harassing Tea Party types.

        And again, there is the economic substance doctrine bolstered in Obamakeratosis, that could be argued. Although, in a country where Nutella has to pay settlement money in class action suits, it never makes sense to not get your assets out of the reach of the US courts.

        • http://www.facebook.com/jack.modelia Jack Modelia

          I am fairly sure that if Samsung were an American company, it would not have been allowed to be as large as it is.  Off the top of my head, the only US company that comes close to being the chaebol that is Samsung is GE.

          In any case, I get what you are saying. The last major breakup that I can think up is at&t back in the 80s. Even though it is pretty much a national company again, with the merging of all the baby bells, one can argue that the mere fact of breaking it up allowed innovation to flourish in communications and so today, we are in a position where landlines are becoming less and less relavant.

  • Sy2502

    As far as I can tell, Apple didn’t break any law. So they are under attack for being smart. Sad.

  • Roy Merritt

    The operative words here are “fictional transactions” as the journalist Mr. Drucker asserted.  Fictional as I understand it is not the truth. What is most disgraceful as I perceive it is these companies i.e. Google and Apple have endeavored since their manifestation to promote the notion that somehow they are more sympathetic toward the common man that they only wish to make the world a better place.  Well the truth as I see it is they are just as greedy, just as eager to forfeit any sense that they are the least bit patriotic as any of the other corporations that claim they are American.  These people don’t care one whit about the country and use countries like Ireland, Bermuda or any of the other venues that offer themselves as tax havens and it hasn’t even been to their benefit either since Ireland of late has seen itself considered one of the nations in Europe that has failed to keep it’s finances in order.  It does their citizens no good that their governments have prostituted themselves to these corporations or this country either.  It seems greed is an international concern.  What do these people think they can do live in a stateless world and continue to reap financial rewards? They are no better than a criminal that would stick a gun in your face and take your wallet.  This will eventually result in worldwide revolution which is always the result of such disgraceful behavior.  It seems their answer to this problem is that they shouldn’t pay the first dime in taxes.  

  • Roy Merritt

    Robert Reich who was Labor Secretary under President Clinton and is presently a professor at Berkley said it succinctly some years ago when he stated that universities who specialized in teaching business no longer teaches ethics.  That all they are concerned with is the bottom line and nothing else.  They have jettisoned any concern for the countries in which they are located in or for the citizens of that country either.  It is disgusting and doesn’t bode well for them in the future that is to come.  If they think they can keep comporting themselves in such a selfish manner I’ve got news for them they won’t.  A lot of good gated communities will do them when those same citizens are storming those gates and determined to bring them to justice for this overt thievery.   

ONPOINT
TODAY
Apr 23, 2014
In this Thursday, Dec. 20, 2012, file photo, Chet Kanojia, founder and CEO of Aereo, Inc., shows a tablet displaying his company's technology, in New York. Aereo is one of several startups created to deliver traditional media over the Internet without licensing agreements. (AP)

The Supreme Court looks at Aereo, the little startup that could cut your cable cord and up-end TV as we’ve known it. We look at the battle. Plus: a state ban on affirmative action in college admissions is upheld. We’ll examine the implications.

Apr 23, 2014
Attendees of the 2013 Argentina International Coaching Federation meet for networking and coaching training. (ICF)

The booming business of life coaches. Everybody seems to have one these days. Therapists are feeling the pinch. We look at the life coach craze.

RECENT
SHOWS
Apr 22, 2014
This undated handout photo, taken in 2001, provided by the Museum of the Rockies shows a bronze cast of the Tyrannosaurus rex skeleton known as the Wankel T.rex, in front of the Museum of the Rockies at Montana State University in Bozeman, Mont. (AP)

As a new Tyrannosaurus Rex arrives at the Smithsonian, we’ll look at its home – pre-historic Montana – and the age when dinosaurs ruled the Earth.

 
Apr 22, 2014
Security forces inspect the site of a suicide attack in the town of Suwayrah, 25 miles (40 kilometers) south of Baghdad, Iraq, Monday, April 21, 2014. Suicide bombings and other attacks across Iraq killed and wounded dozens on Monday, officials said, the latest in an uptick in violence as the country counts down to crucial parliament elections later this month. (AP)

We look at Iraq now, two years after Americans boots marched out. New elections next week, and the country on the verge of all-out civil war.

On Point Blog
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The Week In Seven Soundbites: April 18, 2014
Friday, Apr 18, 2014

Holy week with an unholy shooter. South Koreans scramble to save hundreds. Putin plays to the crowd in questioning. Seven days gave us seven sounds.

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Our Week In The Web: April 18, 2014
Friday, Apr 18, 2014

Space moon oceans, Gabriel García Márquez and the problems with depressing weeks in the news. Also: important / unnecessary infographics that help explain everyone’s favorite 1980′s power ballad.

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Some Tools And Tricks For College Financial Aid
Thursday, Apr 17, 2014

Some helpful links and tools for navigating FAFSA and other college financial aid tools.

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