
5 Completely Insane Facts About the Apple Approach to Taxes - philipcamilleri
http://www.vanityfair.com/online/daily/2013/05/the-five-most-completely-insane-facts-in-the-new-york-times-story-about-the-apple-approach-to-paying-taxes?mobify=0?intcid=full-site-mobile
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trapezoid
This article, and others like it, imply that what Apple is doing is unethical.
However, the opposite is true: it would be negligent for Apple not to do this.

Apple's responsibility is to its shareholders, and that responsibity is to
maximize profits. Because it stands to lose billions of dollars in taxes if
its income is reported naievely, it makes perfect sense for Apple to spend
millions, tens of millions, or even hundreds of millions to optimize its tax
flow.

As long as nothing illegal is happening, this is just an exams of a company
fulfilling its fiduciary duty to its owners.

If people think this behavior is egregious and needs to change, the solution
is to pass new laws to that extent. No one is going to voluntarily overpay on
their taxes.

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philipcamilleri
But that's exactly it: at what point does tax "avoidance" become unethical or
"civically irresponsible". After all, Apple is operating in the USA: doesn't
it have a responsibility to the country (and state), along with it's
shareholders and customers?

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snowwrestler
The point is that Apple is not just operating in the USA; it is operating
around the world and makes profits around the world. No one disputes that
Apple pays U.S. taxes on their U.S. operations, and no one has accused them of
moving U.S. profits overseas to avoid taxes. The big to-do is entirely about
their earnings overseas.

The question of the ethics of international taxation is complicated by the
fact that most countries in the world do not expect their companies to pay
both local taxes and domestic taxes; the U.S. does. So it is not like Apple is
violating some broad standard of behavior. If anything the U.S. tax system is
the aberration.

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yread
> in 2011, individual income taxes contributed $1.1 trillion to federal
> coffers, while corporate taxes added up to $181 billion.

amazing. Corporations pay 5 times less taxes.

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scarmig
Why tax corporations at all? It's not like they're a magical pot that you can
tax without taxing people. People disagree with how much corporate taxes fall
on consumers vs shareholders, but if what you're concerned about is equity you
can pretty easily target an income tax hike toward rich folk.

I'd say taxing corporations is a fool's errand anyway, because they'll always
have the resources and the centralized control to figure out how to escape
taxes as much as possible and carve out further special tax breaks for
themselves. Disaggregate individuals can't do that.

Limited liability is one externality that needs to be corrected for, but the
idea that it adds up to hundreds of billions of dollars strikes me as
implausible.

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philipcamilleri
My lawyer cousin always said it's all about the difference between "avoiding"
versus "evading" taxes. But this just seems to take things to another
extreme...

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bornhuetter
There is a difference between avoiding and evading, but it's often difficult
to tell when a company is doing one or the other. When people say "well they
either did something illegal and should be punished, or they didn't and
everyone should shut up", they usually don't understand how complicated the
situation is.

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jellicle
It's really crazy how fast Apple tax stories get flagged off the front page.

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samspenc
Agreed.

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protomyth
If your CFO is not doing everything legal to reduce your company's tax burden,
then s/he is negligent in his/her duty and cheating the stock holders. Apple's
CFO is very good.

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lowmagnet
Why not just link to the NWT piece instead of this VF blogspam/linkbait?

