
Apple Pays No Tax on Much of Its Overseas Income, Senate Panel Finds - jedwhite
http://online.wsj.com/article/SB10001424127887324787004578495250424727708.html?mod=WSJ_hpp_LEFTTopStories
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kstrauser
> "What they often leave out is the second part of the story, that Apple is
> one of the largest tax avoiders," said Sen. John McCain (R., Ariz.), who
> described Apple as the "most egregious offender" among U.S. corporations
> trying to avoid tax bills.

That's ludicrous. Apple followed the byzantine tax rules that Congress put in
place to benefit their friends and punish their enemies. The correct
interpretation of McCain's statement is that Apple is the best at obeying the
law in a way most favorable to themselves.

I don't think anyone has a moral obligation to pay more taxes than the law
says they owe. If the tax codes are poorly written - as ours most obviously
are - then fix those instead of blaming the entities who are working within
that framework.

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tolmasky
Somewhat relevant talk by Milton Friedman that I found enlightening when
thinking about these tax matters (economics of tax shelters, tax cuts being
the "product" politicians "sell", etc.):
<http://www.youtube.com/watch?v=TruCIPy79w8> (I strongly recommend watching
all of it, but around 5:50 in he talks about why the tax system will remain
complicated if you have an internet attention span).

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thasmin
It may be hard to legally define which companies should pay U.S. taxes on
products made in Taiwan and sold in Japan.

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evv
Apple dodged all the taxes they could, and saved $1.9 trillion overseas. When
they got called out on it, they hit it right back and said "go right on ahead,
fix the loopholes we're using, tax us more, let us help."

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ryguytilidie
But then GE would have to pay those taxes too. And with the campaign
contributions they make, we can't be having that.

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sinnerswing
right. let's not start pointing fingers.

Google, Microsoft, GE, etc.

"General Electric Paid No Federal Taxes in 2010"

<http://abcnews.go.com/m/story?id=13224558>

"GE's CEO, Jeff Immelt Heads Obama's Council On Jobs And Competitiveness"

[http://www.huffingtonpost.com/mobileweb/2011/01/21/jeffrey-i...](http://www.huffingtonpost.com/mobileweb/2011/01/21/jeffrey-
immelt-council-on-jobs-and-competitiveness_n_812005.html)

"Former Google Exec Turns Whistleblower On Company’s Tax Avoidance
Machinations In The UK"

[http://techcrunch.com/2013/05/19/former-google-exec-turns-
wh...](http://techcrunch.com/2013/05/19/former-google-exec-turns-wh..).

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coldcode
Stupid headline, well, duh, it's overseas. They pay 7 Billion here.

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colechristensen
While Apple likely isn't breaking the law (at least not seriously) what you
seem to be missing is that as an American, you are liable to pay income tax
regardless of where in the world you earn it. 'Technicalities' are allowing
Apple (and many many many other companies) to avoid a large amount of the
income tax fairness suggests they ought to pay. The article states that Apple
pays little to no income tax to _any_ foreign government.

~~~
kstrauser
But those "technicalities" are the law, as it was written. The rules say "if
you meet these conditions, then use this algorithm to calculate your tax
bill". The inevitable result is that every company with a halfway competent
accounting department pores over the tax code to find the algorithm that
results in the lowest tax bill, then figures out how to meet the necessary
requirements to use it.

Please note that in no way do I think this is a _good_ thing to do, or that
I'm remotely in favor of the current situation. It sucks and I'm not. But
Congress _made_ that game, and they completely lack the moral authority to
complain about others playing it.

Put this in coding terms, where each tax code requirement is a conditional
branch in a `calculateTax()` function. If you write a function with 50,000
conditionals, you simply can't be surprised that someone figures out a way to
call the function with arguments that give the best possible output for them.
Even worse, _you can't close those loopholes by adding more conditionals_. By
definition, you're only creating more optimization paths for them to choose
from.

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colechristensen
I'm not sure what point you're trying to make.

Should Congress not try to fix structural problems in the tax code which allow
plenty of corporations avoid tax obligations?

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kstrauser
Yes, and that's only possible by removing many exemptions, deductions, special
cases, etc. Congress should absolutely reform the tax code, and it must be by
reducing the number of ways it can be worked around.

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cryptical
When your tax rate is high enough, it pays to optimize your cash flows to
avoid taxes. If tax rates were more reasonable it wouldn't make sense.

