
 Tim Cook tells Congress why Apple won’t move $100 billion back home - bluetooth
http://arstechnica.com/apple/2013/05/tim-cook-tells-congress-why-apple-wont-move-100-billion-back-home/
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glurgh
Apple's argument seems to be -

They pay taxes in the US on US profits (along with payroll taxes, etc)

They pay local taxes on profits earned overseas. Then they gather up those
profits in an Irish subsidiary, where they get the most most favourable tax
treatment available to them.

Why would they, as a multinational company, not do that? Why would they
repatriate those profits, not earned in the US to the US and take a second tax
hit?

If the contention is that they are somehow hiding US profits by
misrepresenting them as overseas profits to avoid taxes, then that would
obviously seem rather sleazy. But if that's not the case, what's the moral or
legal argument against what they're doing? Or are they misrepresenting what
they're doing? It's hard to get a handle on the underlying issue with all the
congressional posturing.

~~~
ghshephard
I agree with you, but playing devil's advocate, American Citizens pay US taxes
on their income, regardless of where they live
([http://americansabroad.org/issues/taxation/us-taxes-while-
li...](http://americansabroad.org/issues/taxation/us-taxes-while-living-
abroad-faq/)) - so why shouldn't US Corporations be required to Pay US Taxes
on their income, wherever they make it?

Note - my answer to that is very, very quickly you would find that successful
US companies re-incorporating in other countries, in much the same way wealthy
Americans will sometimes give up their US citizenship.

~~~
nknighthb
> _why shouldn't US Corporations be required to Pay US Taxes on their income,
> wherever they make it?_

Because the law doesn't say they have to. That's enough for me.

I'm a left-wing, pro-high-tax guy, but I can never understand people who get
angry at corporations for obeying the law. Besides being nonsensical, it's
actively counter-productive. So long as people are focusing their attention on
the corporations, nobody is pressuring the politicians to fix the actual
problem.

~~~
venomsnake
That will be true if corporations were forbade to enter the political debate
at all.

But a corporation obeying a law they helped draft, lobbied for, water down, or
prevented from changing is somewhat different in my opinion.

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sgift
This is amusing and sad at the same time. International companies play the
national egoisms of countries against each other. If all countries agreed to
one framework for taxing (yeah, purely hypothetical) all could profit. But
every one of them fears to get "less" in such an agreement. So, in the end
nothing happens and no country gets anything - all money stays with the
companies. Divide and conquer.

~~~
calpaterson
If everywhere had the same tax levels, why would anyone bother to be resident
anywhere other than the London/New York/Tokyo. A tax cartel probably won't
happen - it is against many governments' interests.

~~~
nknighthb
> _If everywhere had the same tax levels, why would anyone bother to be
> resident anywhere other than the London/New York/Tokyo._

My question is, why would I ever _want_ to be resident in any of those places?
Never in my life have I ever considered living there. I barely tolerated San
Jose for 9 months before I moved to Santa Clara.

There are plenty of reasons to live outside megacities, taxes are way down on
the list.

~~~
calpaterson
If you're a huge multinational, megacities have a lot of advantages.

------
mtgx
Let's just admit that what these companies are doing is pretty sneaky, and
unfair. If they _actually made_ $5 billion with their business in Ireland,
then I'd be fine if they only paid 1% in taxes or whatever are the taxes in
Ireland. Same for their businesses in any other country. Maybe they pay 5% in
some, 15% in others, 30% in others and so on.

They should abide by local laws, and pay taxes on whatever they are making
there. They are doing business there, so clearly they believed that market is
worth it for them, and it should be worth to pay the taxes there, too - after
all if they do pay a lot in taxes, most of that will be transferred to the
consumers in those local markets anyway. But what they're doing is taking
their cake and eat it, too. Making those customers pay more, but then avoiding
paying the taxes that were most likely already included in the price the
consumers paid there.

Then taking virtually all the profit from all the countries and transferring
it to Ireland so they pay the absolute minimum, while _pretending_ they are
barely making anything in all the other countries, because they get their
Ireland subsidiary to take all the money, so there's "barely anything left" to
tax in other countries - _is not okay at all_.

Some may say that it's Apple's "duty" to do this, but it's their duty in the
same way it's their "duty" to sue many other companies for infringing on
"slide to unlock" and other such trivial patents, by (legally) _abusing_ the
patent system.

So just because it's not illegal to do something, and it's their "duty" to
maximize profit _by any means necessary_ , doesn't mean we should pretend it's
"morally okay". It's also the governments' duty to fix these loopholes, and
restrict the companies from doing this as much as possible (some international
treaty is going to be necessary). And I also think it's the consumers' duty to
not be okay with this, and protest against it.

~~~
foolrush
Well said.

Since the great depression, corporate shares of taxes has been steadily
falling. One can only speculate where it might lead.

2011 USA Taxes:

Total corporate tax: 200.8 Billion.

Personal income tax: 1.1 Trillion.

[http://www.npr.org/blogs/money/2012/04/13/150441259/what-
ame...](http://www.npr.org/blogs/money/2012/04/13/150441259/what-america-pays-
in-taxes)

------
akeeble
"Senators ask why Apple moves profits into an Irish company that pays no
taxes"

Didn't they just answer themselves!

~~~
bluetooth
The best part is that current tax code means Apple earning investment income
through AOI is actually legal. Apple has paid their taxes and is playing by
the rules - yet Levin is still upset.

Edit: I would appreciate it if someone told me what I said was incorrect or
wrong in anyway.

~~~
venomsnake
Because you made a slight typo. You wrote the best when you obviously meant
the worst.

~~~
bluetooth
Guess conveying sarcasm over the internet is not one of my strengths. I
suppose I meant more of a "your tax code allows this type of activity, yet you
are still surprised it happens" type message.

~~~
manicdee
Give the guy a break, he was clearly educated in the USA.

~~~
venomsnake
Not at all. Just poe's law in action <http://en.wikipedia.org/wiki/Poes_law>.
If any of the discourse team are reading this - sarcasm/intention tag will be
much appreciated.

------
mike_esspe
Why zero corporate tax is an outlandish idea? Why not tax only individuals?

1) Corporate tax is only about 10% of total budget revenues.

2) Zero corporate tax promotes business growth.

3) Corporate taxes are ultimately paid by individuals.

~~~
pyre
Well, corporations use resources that cannot be pinned to a single individual.
The example that comes to mind would be putting out trash for the city to
collect[1].

[1] I realize that companies pay separately, or use private collection in many
cases. It's just an example of a company using a resource that can be (and in
some cases _is_ ) paid for by taxes.

~~~
mike_esspe
Probably there should be a resource tax, not profit tax?

~~~
nknighthb
How do you efficiently administer a road tax[1]? How do you measure a
company's use of the military defense of a nation? The police protection that
makes their locality safe for business in the first place? What about the
nearby public park that attracts families who frequently go to a nearby ice
cream shop? What about the fact that the local bar attracts people who get
into fights on the sidewalk?

[1]Gas taxes are obviously not the answer.

------
tsotha
Instead of berating companies for not being stupid, Congress should think
about lowering the US's stupidly high corporate income tax.

~~~
manicdee
And perhaps the Congress of the USA can accept that the US has no right to
expect a share of profits from sales made in Australia of goods made in China,
shipped by an airline registered in Singapore.

------
Claudus
Reading about this issue, it seems like the mentality of the Senators is that
the money belongs to them, and Apple is keeping it away from them.

This mentality is also common among thieves, who rationalize their thefts by
believing they are taking things that they are somehow owed.

~~~
crm416
I see your point, but isn't it also common among those from whom the thieves
have stolen?

~~~
sbuk
Are you suggesting that Apple, by selling products in foreign territories and
profiting from this, are somehow stealing from the US Government? IMHO, that
is backwards. The USA have absolutely no entitlement to money _any_ business
(or for that matter, any individual) makes outside of it's borders.

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noonespecial
It won't be long now until the large multi-national corporation will be a kind
of nation-state in its own right. Distributing assets all around the planet
making them inaccesible to any single government is the ultimate defense
against nationalization. Without that threat hanging over them, they begin to
act like sovereign nations.

~~~
sgift
As written (or predicted?) in various Cyberpunk novels:
<http://en.wikipedia.org/wiki/Megacorporation>

~~~
camus
That is the dystopian future we will live in , Corporations replacing states.
Everything will be private and own by corporations , like everything used to
be owned by kings,royal families and the "blue blood".

