“Apple is the target of a Senate hearing next week investigating offshore tax practices,” Anna Palmer reports for Politico. “Apple CEO Tim Cook is expected to testify at the Senate Permanent Subcommittee on Investigation’s hearing Tuesday.”
“Apple has been under fire for its tax practices. The company recently avoided paying as much as $9.2 billion in taxes by buying back stock with debt instead of offshore cash, Bloomberg reported,” Palmer reports. “Apple has a reported $100 billion in offshore funds.”
Palmer reports, “The hearing is part of the panel’s continued examination of how companies shift profits offshore and how that impacts the tax code. Representatives from Microsoft and Hewlett-Packard testified in September 2012 in a hearing on the same topic. Apple spokesman Steve Dowling told Politico that the company has been working with the subcommittee and welcomes any further questions it might have.”
Read more in the full article here.
MacDailyNews Take: Apple did not “shift profits offshore.” Apple earned those profits offshore, where they were taxed in the countries as allowed by law. Hence Apple’s aversion to bringing the money into the U.S. in order for it to be taxed twice.
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]
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The District of Criminals needs to put the Senators and Representatives behind bars. They are the real crooks constantly stealing from “We the People”.
Hypocrites.
God doesn’t ask for more than 10%, so why should government?
I agree with what you said here 100%……
None of my thousands of gods ask me for a single cent.
Why is your god so greedy and demanding?
Maybe none of your thousands of false gods is as smart as his one god.
The son of your one god (is he a god too?) detested money dealings. Didn’t he?
“Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.” – Jesus Christ
Was that quote from Jesus Christ or Jesus H. Christ?
The two get mixed up since their names are similar.
His god is less greedy than your government. Does your gorvernment think it is entitled to more money than all your gods?
Government in modern western countries is you and me. It is human behavior to ask for everything today and then pay for it sometime in the future, preferably kicking the can down the road to the next generation if possible. Sadly, in the USA, both corrupt political parties — lapdogs for international corporations without a shred of loyalty to any country — have become experts in doing exactly this.
God, also a human invention, works in the exact opposite. The charlatans who claim to speak on god’s behalf take your money today, with some pathetic unverifiable promise that your financial contributions to their lavish, tax-free lifestyles will get you a better position in an imaginary parking lot in the sky.
The former costs are understandable and, even if they can be better managed, do contribute to measurable improvement in our lives here and now.
Theological taxation, on the other hand, has always offered as much if not more misery & war as it has comfort & peace. And if you think your government is corrupt, you haven’t been keeping an eye on your church’s business accounting, have you? It seems nobody does after they swallow the faith pill which kills off all logical reasoning ability.
What? Need more money…. Cut welfare, food stamps, and ObamaCare.
Problem solved. Stop begging the successful people who know how to use money wisely.
Sickening! Why does ANYONE want to hang on to more money than they could spend in a thousand lifetimes? If they were being guided by the most elementary of Christian principles they would not even have to be asked (never mind begged)… they’d be putting most of their vast wealth to direct use for the benefit of others.
By the way, the parable of the Good Samaritan is not, “Help others — unless in your small-minded, shrivel-hearted judgement, you decide they are parasites and freeloaders.”
Why waste money on building inefficient bureaucracies filled inept government workers sucking money from the citizens to fund ineffective programs to support generations of lazy and uninspired sloths? I would rather given a neighbor a hand than be forced to supply a handout….repeatedly. After spending trillions to cure poverty we now recognize that government is the problem and not the solution. It is impossible to promote opportunities for wealth generation, encourage thrift, and stimulate economic freedom once the government gets involved in confiscating money from one citizen to give to another. It is theft by decree and only makes the receiver feel entitled.
People need to understand that globalization is happening nowadays. I mean, yes it means we have to outsource jobs to other countries. It’s been frustrating that we can’t build quality products in America. Rumor has it that Apple is building a factory in Texas, so hopefully, iPhones will have the “Made in USA” label.
That’s kind of strange. Because Americans build by far the best aircraft. Maybe it’s that Americans can’t build quality stuff for extremely low wages! http://www.f22-raptor.com/about/history.html
Some of the best heavy equipment. Catapilar, jet engines, industrial compressors, turbines, just to name a few. All the crap about USA not able to mfg is FUD slung around by liberal press so they feel good about driving their BMW’s and Hyundais. They love Samsung too!
Crap, how many times do I have to repeat this? Answer: Until all those that don’t understand how tax policy impairs our ability to compete in foreign markets, and that same policy gives advantages to offshore (foreign) manufacturers.
We, the USA, tax production (aka taxes based on income and profits), while our foreign competitors do not. THEY tax consumption (aka sales tax).
The net result of this difference in tax policy is to raise the production cost of US produced goods, while lowering the cost of foreign made products.
IT HAS NOTHING TO DO WITH THE COST OF LABOR.
This difference prevents US manufacturers from investing in quality, while foreign made producers can, do, and remain competitive.
You are delusional if you think CEOs aren’t primarily interested in exploiting cost of labor. Many of them are on record claiming that their movement of factories overseas would have occurred even if taxes in the USA were 0%. Simple math should tell you that.
The main problem with the US tax code is that it was not written by Americans for the long-term health and prosperity of the nation. It was written by corporate lobbyists to ensure loopholes allowed them to while about high tax rates while paying nearly nothing — shifting the vast majority the cost burden onto the individual taxpayer — but by virtue of several decades of unbalanced budgets and shrinking income tax rates, now the USA has to service the interest on its unpaid debts. Until Americans pay off their national credit card, things will only get worse. Take a page from Eisenhower: if you fight a war, you pay for the war quickly and then move on — yes, that meant high taxes for a short time. Ever since both US parties have been financial disasters — and if anyone looked at the record, Republican administrations have actually racked up more debt, not that Democrats are competent either.
You should
– Look at countries that have no social safety net.
– Look further back in US history when there was no social safety net.
And the shrivel-hearted presumption of your kind that anyone who cannot pay their way is a parasite is nonsense.
– For one thing, there are VAST numbers of people in the US who are in a group called the working poor. They have jobs, but get paid too little to even feed themselves adequately. They love “economic freedom” — and they’re certainly working hard enough to deserve it. Hmmm. I wonder why their fine Christian bosses don’t just pay them a living wage.
– And where I live, the right-wing government did a survey of welfare recipients. Everyone expected the survey would find what that government preached – blah-blah, lazy scumbag parasites, etc. etc.
In fact, the government had the honesty to reveal that their findings contradicted their presumptions:
– that most people stayed on welfare for as short a time as possible
– that those on it for long term were almost all in circumstances where it was unavoidable
– that the parasites were a small percentage.
Trillions of dollars spent on social programs says that you are a liar. The “as short a time as possible” is a meaningless statistic.
You are the government, that is the problem. We The People!!
“Success” is won in many ways, not all of them ethical or moral, or legal, or admirable. One of the least admirable, in fact, is to gain advantage the easy way, by caricature, demonizing “outsiders”, playing on frail human emotions and raw instincts. This kind of “success” is not derived from the sweat of one’s brow, the ingenuity of one’s mind, or the instinct for brotherhood but rather from the base, selfish instinct shared with salamanders and shellfish. That this behaviour has been enshrined in self-serving economic, psychological, and social theories does not make it right, or good; only convenient in maintaining thought control over the masses with a minimum of effort.
“What would Jesus do?”—everyone knows the answer, but it’s easier and more satisfying to just hate.
@hannahjs
Wow! Nicely said.
Very nice.
What would Jesus do? It’s obvious that you haven’t provided a single answer either from historical records of what he did or what he said.
He would have a last supper.
Does everything have to be explained to you?
Riiiight…nothing in your list includes the $600B spent on defense every year.
Re Steve
What simple minded nonsense.
There will not be a balanced budget without going after the National Security State. Second, the biggest welfare queens are the Red states that keep sending “conservatives” to Washington that only worry about deficits when Democrats are in the White House.
“Reagan proved deficits don’t matter”
Dick Cheney
Tim Cook needs to go. This sounds like he has something to hide.
That is the most ignorant statement I’ve heard anywhere about anything in many years.
I was being sarcastic. I made it clear a few posts down. I was making fun of the anti-Cook crowd. Personally, I think he is just doing fine.
My apologies then. I just happened to land on that one message in this thread and it sounded pretty much like the Google/Samsung trolls that have been populating MDN lately.
What is with the Tim Cook hate? He is a great leader so far. He is doing great as far as I’m concerned. At least he’s better than me!
John and Armando are being sarcastic. But then Stevie B wouldn’t get that, would he?
Think we need a tag or something lol
That would be the tag, which has existed since HTML 0.3.
Sigh… the \ tag, that is.
But seriously, why does Apple need an offshore account? Isn’t that type of thing popular with celebrities and dictators? Not saying its bad in any way, but it is still very odd for a large company to do this. And yes, I was being sarcastic. I hate how people think it’s going to be another 1990s with Cook as CEO. Besides, Apple was not THAT bad in the 90s: The Newton was pretty cool for the time, but I was more of a Palm fan back then.
Apple maintains bank accounts in nearly all taxing jurisdictions for exactly the reason the Senate hearings are looking into: Every one taxes the money you make in their jurisdiction, and then a few countries tax that money again when you move it. So smart companies don’t move it. They keep it right where it was earned and they pay whatever local bills they can out of that money.
I was hit by Double Jeopardy taxation even though it’s not supposed to happen when I did a job in Canada. I was hit up by both Revenue Canada and the IRS which by the end of the day was 60% of the income I had made and some income I made in the U.S. supposedly could also be taxed by Revenue Canada! Unbelievable. I realize the corporate situation is a little different but the money Apple would bring back into the country could ultimately be put to good use here and in ways goverbment would see taxes from. Uncle Sam you can’t always have tax upon tax upon tax upon tax upon tax upon tax upon tax. Money has to also be put to productive use so the country can grow and prosper.
“…but the money Apple would bring back into the country could ultimately be put to good use here and in ways goverbment would…”
get real.
Sounded pretty real to me. Paying a reasonable repatriation tax on money already taxed in the country it was made in and using it to create more jobs and wealth here that also gets taxed seems reasonable. A healthy economic engine keeps government purring (and always begging for more to squander on pork barrel projects.)
government doesn’t purr, like all serpents, it hisses.
Apple paid 28% in federal taxes on profits, while google paid only 9%, yet Eric the mole is not called in for a questioning.
Apple has no insight into the senators’ browsing history. Just saying.
All the more reason Google must be stopped. Undue influence takes many forms. But in any event these congressional investigations always seem to blow over, and the gobblers of Earth’s bounties and assaulters of individual liberties continue their rapacity unabated. Everybody knows that (1) earnest young legislators face new temptations once in office, and inevitably (2) succumb to peer pressure from caucuses or bribes from rich constituents, (3) rationalize their actions to others using boilerplate groupthink mottoes and to themselves with self-deception, and (4) wind up as part of the very problems they had idealistically set out to solve. And that’s just the decent sorts. Government is a machine for siphoning wealth from the population and funneling it to everybody but YOU.
On the bright side, we’re more or less protected from foreign invasion by our standing armies.
As a Canadian, we thank you for your standing armies.
Canada has its share of armed forces as well, and the USA and Canada are interdependent when it comes to continental defense; we rely on and have confidence in each other.
We just spell “defense” correctly. The Canadians don’t. 🙂
Easier for Google to avoid. Just run all thier advertising billings through an offshore venue. Apple has $200 billion in revenue. In addition to income tax its sales probably generate $20 billion a year in sales tax and Value added taxes (overseas). Wonder how much US income tax Samesung pays. I would venture zero. I suspect they set their company pricing (transfer price) so that US operations are at break even. I would venture a guess that Apple pays incurs more corporate income tax liability in the US than any other company. I believe Apple books the tax liability quarterly, but only pays when the funds are repatriated. Hence, the use of borrowed money for buy backs/dividends. The interest expense can shield the repatriation of some cash. I’ll check the 10K to confirm my suspicions.
Don’t worry, Google isn’t getting off so lightly in the UK, after avoiding paying any tax in the UK as their sales are ‘officially’ listed as being run from Ireland, someone noticed that Google was advertising for sales staff in London. Add to that the 200+ people who had said in their Linkin profiles that they worked in sales at Google’s London office, and the government subcommitee looking into tax avoidance have decided it’s time to call Google back in for questioning.
The senate is probing Apple because of an arcane and irresponsible tax code. Perhaps the “Senate” should be probing the Benghazi cover up, the use of the IRS as a bunch of thugs to target conservative groups, the giving away of arms to Mexican drug lords, and the illegal seizing of electronic communications belonging to the Associated Press?
Nope, what else would a bunch of Democrats do in the face of all that corruption? Ignore it and go after someone else’s money. Typical.
1
MDN stop being so puerile. Apple et al do dishonest accounting to shift earnings from the countries where they took the money, used the services provided by governments and businesses located in those countries, took advantage of those countries’ protection of legal, IP and business rights, etc, hired employees without contributing to their education and much more. In Australian terms, these multinational companies are ‘bludgers’ relying on individual taxpayers and small business to pay taxes to support economic, business and social infrastructures in the countries where they take their pound of flesh. MDN misses the irony – Americans are now complaining about their missing tax receipts through the nefarious profit-tax shifting practices as many non-Americans have been saying for years. I have been buying Apple computers from Apple II onwards but my support for the Apple platform does not cause me to become critical of Apple’s business practices. I suggest MDN and its less worldly correspondents take a wider view.
There’s nothing “dishonest” about it.
Agreed!
Haha…The share market stands for profits not charity for the needy, this is the real world we live in today. As far as taxes and off shore shifting of monies goes, well it can’t be stopped **reality check America
Unless I am mistaken, Apple is a pretty Liberal company. I think it should willingly WANT to bring all of it’s money here so that BILLIONS can be TAKEN – UNEARNED – by the government and given to the less fortunate. It’s not about the profits. It’s about the ideology!
I agree with MDNs comment in part.
The issue is, yes the goods were sold off shore, but part of those earnings were due to work done in the USA by American workers so whatever value has been assigned to that portion of the product jus if it was built in the U.S. and then exported should be Taxable by the U.S. just as if it was built in the U.S. and then exported.
Maybe Apple can teach them something.