Apple to The New York Times: We are among the top payers of U.S. income tax

In response to requests for comment on the company’s tax practices, Apple provided this statement to The New York Times:

Over the past several years, we have created an incredible number of jobs in the United States. The vast majority of our global work force remains in the U.S., with more than 47,000 full-time employees in all 50 states. By focusing on innovation, we’ve created entirely new products and industries, and more than 500,000 jobs for U.S. workers — from the people who create components for our products to the people who deliver them to our customers. Apple’s international growth is creating jobs domestically since we oversee most of our operations from California. We manufacture parts in the U.S. and export them around the world, and U.S. developers create apps that we sell in over 100 countries. As a result, Apple has been among the top creators of American jobs in the past few years.

Apple also pays an enormous amount of taxes which help our local, state and federal governments. In the first half of fiscal year 2012 our U.S. operations have generated almost $5 billion in federal and state income taxes, including income taxes withheld on employee stock gains, making us among the top payers of U.S. income tax.

We have contributed to many charitable causes but have never sought publicity for doing so. Our focus has been on doing the right thing, not getting credit for it. In 2011, we dramatically expanded the number of deserving organizations we support by initiating a matching gift program for our employees.

Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules. We are incredibly proud of all of Apple’s contributions.

Source: The New York Times.

MacDailyNews Take: Now, NYT, go start a new idiotic, self-defeating vendetta and hop aboard the coattails of someone else’s brand while yours continues to rapidly spiral down the shitter.

Related articles:
The New York Times: How Apple sidesteps billions in global taxes – April 28, 2012
The New York Times blows it, gets Apple CEO Tim Cook’s earnings spectacularly wrong – April 9, 2012
Rush Limbaugh: The New York Times has turned on Apple; they wouldn’t do this if Steve Jobs was alive – February 1, 2012
Apple CEO Tim Cook calls New York Times supplier report ‘patently false and offensive’ – January 27, 2012
Why did The New York Times revise their ‘iPad modest changes’ article and neglect to inform their readers? – March 8, 2012
The New York Times continues idiotic vendetta, claims Apple’s new iPad only offers ‘modest changes’ (UPDATED) – March 7, 2012

52 Comments

    1. Sorry, Apple should not be “among” the top payers of US income taxes. They should be “the” top payer. Anything else displays a tax code in need of loophole closing.

      1. You’re more like an idiot than just a mere sucker.

        You statement is illogical. How much of Apple’s income is subject to U.S. taxes? Less than Wal-Mart’s and many other companies is the correct answer. Therefore, your statement is false and illogical. Apple should NOT be “the” top U.S. taxpayer precisely because Apple does not have the highest amount of U.S taxable income.

        Obama voter, I presume?

    2. why bother with NYT? so many more news services that do a better job…

      i would even say at times, the englishmen (BBC) would be a better source for US news…

  1. NYT: Why didn’t you add in the jobs created outside this company, by the innovation from this healthy company? Because you can’t do the math? Because you don’t understand cause and effect? Because you need to kill the golden goose, and give it’s treasure to those who haven’t earned it? Or do you hide behind reporting just some of the “facts”? and if so, why? Because you know you’re thesis isn’t supported by the rest of the facts? In sum, are you liars, or just incompetent?

  2. It is interesting that they, NYTimes, were so quick to jump on the bad apple bandwagon for doing what was/is completely legal. Yet, when Obama, Biden, and the obama’s favorite corporation (GE) do the same thing (legally pay as little tarxes as possible) – they get a pass. I guess transparency is only used when it benefits them.,, So much for fair and balanced!

    1. NY Times Basked In ‘Warm Afterglow’ Of Obama Election

      Based on conversations with Times reporters and editors who cover the campaign and Washington, I think they see themselves as aggressive journalists who don’t play favorites. Still, a strong current of skepticism holds that the paper skews left. Unfortunately, this is exacerbated by collateral factors — for example, political views that creep into nonpolitical coverage.

      To illustrate, Faye Farrington, a reader from Hollis, N.H., wrote me earlier this year in exasperation over a Sunday magazine article about “Downton Abbey,” the public television series, in which the writer slipped in a veiled complaint about Mitt Romney’s exploitation of the American tax code.

      “The constant insertion of liberal politics into even the most politically irrelevant articles has already caused us to cancel our daily subscription,” Ms. Farrington wrote, “leaving only the Sunday delivery as I confess to an addiction to the Sunday crossword.”

      The warm afterglow of Mr. Obama’s election, the collateral effects of liberal-minded feature writers — these can be overcome by hard-nosed, unbiased political reporting now.

      Arthur S. Brisbane, NYT Public Editor, April 22, 2012

  3. Please do your homework. Wonder why companies move overseas? I like fairness. This article was to just get “eyes”. What we needed is to concentrate on building brains with what we read. Love the “sidesteps billions”. Would you call that negative? I guess if your big and successful you can expect this type of article. Hope Apple responds.

  4. I found the article to be inflammatory. The article headline states Apple is sidestepping “billions”, and in the article, they discuss several tax issues and only one is related to “billions”, and that one is the most debatable. Here they are:
    • California state tax on Apple’s investments – Apple earns less than 1% on its roughly $35B in US cash. California state tax on that might result in about $30M, not billions.
    • R&D tax credits – the amount cited amortized over the 15 year period comes out to about $27M a year, not billions, further, many companies take far higher R&D credits, particularly SOFTWARE companies, and those involved in GAMING SOFTWARE.
    • Foreign tax avoidance – Apple pushes its foreign income thru countries like Ireland to get very low taxes. Back in 2007, the NYTs highlighted bands like U2 and the Stones who used the Double Irish and Dutch Sandwich. Perversely, the less Apple pays in foreign taxes, the MORE Apple might pay in US corporate taxes, since Apple must pay the balance in US corporate tax. Again, since US companies must pay the 35% regardless of where it’s made, there’s no sidestepping “billions”, just a shift on which gov’t gets it.
    • the Sullivan paper – this is the crux of the headline, the only place where “billions” are mentioned. It’s all of 1 and a half pages long! The point made is that Apple only pays the “cash” taxes required, which amounted to about $3.3B or 9.8%. Apple also accounts for accrued taxes, an additional $5B, which would be paid, when foreign profits are repatriated to the US. What the NYTs doesn’t point out is that Sullivan is SURPRISED that Apple accounts for this, as he states “most companies” do the opposite and report all of their foreign income is permanently invested overseas, in order “to lower their effect tax rates and boost their reported after-tax profits.” He speculates Apple may do this to save for a rainy day, or to nullify negative publicity. Of course, he doesn’t take the obvious answer which is that Apple may actually do what the law requires and declare what part of its foreign cash it actually plans to repatriate, which is 60%.

    The billions come in where Sullivan speculates that because Apple designs its products in the US, it should pay 50% of its income in the US, or even 70%. If it paid 50% as if it were US-income that would raise its taxes by 2.4B. That’s the “billions” in the whole NYTs article. And yet, Apple has put it in their financials that they have accounted for US taxes as if >70% of its income was US-sourced. 70%! That’s Sullivan’s dream, and Apple has accounted for it. Until Apple changes its mind on what it intends to do with the cash, one should take it at its word that it intends to repatriate 60% of its foreign income and pay its effective US tax rate of around 30%, generating an additional $5B in US tax which has accrued.

    It seemed to me, that Sullivan’s paper should applaud Apple for accounting for US taxes on its foreign income, unlike all the other companies he cites. The bottom line, is that the whole NYTs article is about ~$30M in possibly lost California state tax, and $27M in R&D tax credits, and foreign taxes shifted perversely to the US, when Apple repatriates its foreign cash. We won’t know if Apple sidestepped billions in taxes until it happens, and it hasn’t happened yet.

    1. >>>Of course, he doesn’t take the obvious answer which is that Apple may actually do what the law requires and declare what part of its foreign cash it actually plans to repatriate, which is 60%.

      Or the even more obvious answer… Apple is pulling pretty hard for a tax holiday for those funds. I believe they’ll pay some taxes, but not full rate, and Apple can hold out as long as it takes…

      Nice write-ups Ken.

      1. Yes stereotyping and name calling is fun!

        We progressives have some names to describe you too:

        science-deniers
        regressives
        neocons
        teabaggers
        corporate-whores
        chumps
        reich-wingers
        greedy, small minded bigots

        I could go on all day, but I know this accomplishes nothing. I don’t know you personally, but partisan politics has gotten nasty, and clearly it has emboldened you.

        It is just the sort of division the corporate overlords hoped for. While we argue and call names, both sides of the aisle are fleecing America for all it’s worth on their behalf.

        You see the world the way you were programmed to, time to wake up to reality.

        1. Just spewing more commie propaganda Lies Upside Your Ass.

          Conservatism is what has brought people out of the caves and into the modern standard of living.

          Libtardism wants to put us all right back into the caves.

          Stuff it, comrade!

  5. Thats right, libs. The only way a company can contribute to the world is through the tax revenue it creates for your precious governments.

    The New York Times is disgusting. This is getting serious; it’s time for you liberals to grow up before you destroy everything that is good

        1. @manbearbig: Obviously it has to do with taxes. But the tax policy on this was the same in the last administration as in this one. This is simply media created sensationalism, and Apple is the current target because Apple is the most profitable company around. A journalist or two created this discussion. Nothing to do with US politicians or partisan politics. I repeat – go to a political website to insult your favourite politician. As a Brit, I find it utterly bizarre that American republicans use a website about Apple, a company that combines extreme profitability with liberal leanings, to insult democrats.

          1. Thanks for responding. Sorry I wasn’t more clear. I’m not talking about this US administration or the last. I’m talking about a pervasive problem with liberals especially at the new York times to attack wealth creators. The writers and their defenders are clearly missing a very important aspect to their piece:

            Apple creates wealth. “They move the human race forward.” Their contribution to society is enormous even if they never contributed a dime directly to the public coffers.

            This piece was written because the writers hate people improving lives. They want more centralized government control to control and destroy creators. Just like the statists and collectivists before them in any country.

            No, I’m not trying to talk about Obama or whatever… Don’t worry, that stuff bores me too. It has nothing to do with Obama, it has to do with a terribly persistent and destructive way of thinking about wealth and its creators.

            1. Thank you for a cogent and civilized response. From where I sit I think the NYT has taken on more of an anti Apple stance than an anti business stance. Or maybe it’s an anti success stance, and Apple is the poster child of success right now. I don’t know why, except sensationalism sells papers and makes money for them. But it’s just the NYT, and it doesn’t count for much. And it’s neither correct nor helpful to generalize all liberals as supporting the destruction of wealth its creators, just as all republicans don’t dress up in 3 cornered hats and wave muskets around. Such rhetoric just divides this country even more. I think you’ll find the book It’s Even Worse Than It Looks (one author is conservative, the other liberal) illuminating.

            2. You fools (Nina and Gilligan) aren’t intelligent enough to realize just how much you prove my point. Nor are the idiots who employ you to spam boards like this.

            3. No Joe – Idiot,

              The only people being employed to spam boards are LIBERAL-TARDS!!!!!!!

              Conservatives care deeply about the roots and foundation of the US. We DESPISE you libtard trolls. We will defeat in November at the voting booths and beyond. You racist – hater – Marxist – STATISTS can go straight to hell.

              Your point Joe-Moron is you have no point other than to destroy all that is great. News Flash: We won’t let you!!!!

  6. It’s clear to me the corporate “news” media’s meme is now “Apple is evil”, especially at the NYT. We can count on at least one article per week that attempts to put Apple in a bad light.

    1. Guess NYT got tired of beating up on Walmart, SUVs, etc. and Apple is the big dog target now. Interesting they started after iCEO was not around and launched negativity within days of record 2011 4Q profits. Their bias is clear when the headline reads, “sidestepping.” Apple followed the law, so what’s the problem NYT? Desparately need to tap a new source of tax revenue to give away for your party to get elected?

      1. I like how they pointed out that Walmart pays more in tax than Apple, like it’s important or comparable at all.

        The collectivist/statist mindset at the NY Times is rotting their brains. It’s not even about favoring “Democrat” approved corporations anymore, it’s just about hating the creation of wealth at this point.

  7. New York Times wants to become the new TMZ. The way they have been targeting Apple lately, they are well on their way. Good job NYT, you’ve finally hit rock bottom and in the same boat as Consumer Reports.

  8. Great response to a very one-sided, slanted article. Lets see the other big corporations produce their responses.. starting with big pharma and big oil…

  9. The real question to The NYT is: Why no nearly daily vendetta pieces against EXXON-MOBIL during their decades ruling as the largest company by market cap? Why no articles on how much taxes XOM didn’t pay? NYT either shut down the presses or go to a smaller paper size and compete at my grocery checkout with The National Inquirer.

    1. Probably because they didn’t want Exxon replying with the facts like: their profit margin is a bit under 5%, and out of every dollar we pay for gasoline, far more goes to taxes than the oil companies’ profits.

      -jcr

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