Does Apple know how to use its money better than the U.S. federal government?

“The New York Times reported on Saturday that Apple lowers its tax bill with various tax moves that involve using offices in lower tax regimes,” Elizabeth MacDonald reports for FOXBusiness. “Using analysis from a former Treasury economist, the New York Times reported that Apple ‘paid cash taxes of $3.3 billion around the world on its reported profits of $34.2 billion last year, a tax rate of 9.8%.’ The article goes on to say that Apple’s federal tax bill likely would have been $2.4 billion higher last year without these moves.”

“But using Apple’s corporate accounting profit to arrive at its effective global rate of 9.8% is dubious because profit figures are different numbers versus the taxable income figures companies report to the Internal Revenue Service,” MacDonald reports. “A look at Apple’s filings with the Securities and Exchange Commission shows the more appropriate effective rate for Apple is likely more than double the 9.8% effective rate the Times reported. Apple already reports in its filings that its global effective rate for both 2011 and 2010 is 24%, and its effective U.S. federal rate is likely 20.1%. Moreover, its global effective rate for 2009 was 31.8%.”

MacDonald writes, “The story [also] doesn’t note how the U.S. government gave tens of billions of dollars in tax breaks to American International Group, Citigroup and Bank of America in order to bail them out for their reckless bets in the marketplace. The more important debate is this: does Apple know better what to do with its money than the federal government, which has recklessly blown money on bankrupt companies like Solyndra and lavish junkets for the General Services Administration? A government that launched policies that blew out the balance sheets at the bankrupt Fannie Mae and Freddie Mac, two off balance sheet hedge funds the US taxpayer now owns, with more than $150 billion net so far chucked in that hole?”

MacDonald asks, “Would it be cheaper and better for job growth for the U.S. to have a pro-growth tax and regulatory regime to attract back home up to $700 billion Moody’s Investors Services estimates companies have parked offshore, versus the government spending money on things like the White House’s $753.2 billion stimulus, that didn’t move the needle much on the jobless rate?”

Read more in the full article here.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

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The New York Times blows it again: Incorrectly reports Apple’s tax rate – April 30, 2012
Apple to The New York Times: We are among the top payers of U.S. income tax – April 29, 2012
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
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The New York Times continues idiotic vendetta, claims Apple’s new iPad only offers ‘modest changes’ (UPDATED) – March 7, 2012

60 Comments

  1. First lady Michelle Obama’s 2010 trip to Spain cost taxpayers nearly $470,000.

    Judicial Watch, which filed a Freedom of Information Act request, claimed that documents show the trip cost at least $467,585.

    Secret Service costs totaled nearly $255,000, according to Judicial Watch.

    Gee, that’s a lot of hookers.

    Based on Pentagon estimates of flight costs, another $199,000 went toward the flight from the United States to Mallorca and back. On top of that were various expenses for the 15-person flight crew. They stayed at a local motel at a cost of roughly $10,000, according to Judicial Watch, in addition to money spent on rental cars and food.

    The answer to the headline is: HELL YES!!!

        1. You really do take the cake. FYI- the First Lady cannot travel on commercial aircraft for reasons of security- among other reasons. Where were you when Ms Bush wasn’t flying Jet Blue and Virgin in coach?

            1. In my America, we show respect to the President and the First Lady, even if we do not like their work. When whining trolls like Nan decide to verbally degrade these people, then I say its time for their whiny bitching and worthless self to go back to Romania or Serbia and kill babies like they did before they came here.

              OK, its an over the top rant, but when you use that language against the First Family, then you are not worth 1000th of what you declare them to be.

              Here in America, we can agree to disagree but if you do not have respect for the office, then you deserve NONE. My thoughts to all the fear and political war mongers here. Dislike the direction, but respect the office.

              Just a thought,
              en

    1. Does the Government spend lots of money? Sure. Does the Government waste money. Again, there is no doubt. Can and should the Government reduce waste and become more efficient. Once again, yes. This has been true for many decades.

      Are you implying that Presidents and First Ladies in previous administrations traveled in commercial coach without Secret Service protection, thus saving taxpayers a lot of money?

      Forget it…you are F10T12. No need to talk about anything that does not support your existing mindset…

      1. Please show me where Laura Bush took her daughters on vacation and racked up a $470,00 bill on the backs of taxpayers.

        I’ll save you the trouble: She didn’t.

        Moochelle didn’t get her nickname by accident.

        1. You seem to like numbers so:
          “… each of Bush’s trips to Crawford cost taxpayers $259,680. That’s a total of $20 million just for Bush’s ranch flights.”

          1. Yawn, this old chestnut again?

            Crawford was a fully functioning Western White House, with communications and staff equivalent to the WH in DC… He hosted foreign dignitaries there as well…

            Visitors to the ranch have included:
            • Russian President Vladimir Putin, November 2001
            • British Prime Minister Tony Blair, April 2002
            • Saudi King Abdullah, April 2002, April 2005
            • Saudi Prince Bandar bin Sultan, August 2002
            • Chinese President Jiāng Zémín, October 2002
            • Spanish Prime Minister José María Aznar, February 2003
            • Australian Prime Minister John Howard, May 2003
            • Japanese Prime Minister Koizumi Jun’ichirō, May 2003
            • Italian Prime Minister Silvio Berlusconi, July 2003
            • Mexican President Vicente Fox, March 2004, March 2005
            • Egyptian President Hosni Mubarak, April 2004
            • Spanish King Juan Carlos and Queen Sofía, November 2004
            • Canadian Prime Minister Paul Martin, March 2005
            • Israeli Prime Minister Ariel Sharon, April 2005
            • Colombian President Álvaro Uribe, August 2005
            • German Chancellor Angela Merkel, November 2007
            • Danish Prime Minister Anders Fogh Rasmussen, February 2008

            On May 10, 2008, the ranch played host to the wedding of Jenna Bush and Henry Hager. The ceremony was relatively simple and was attended by some two hundred friends and family members.

            http://en.wikipedia.org/wiki/Prairie_Chapel_Ranch

            In contrast, Chelsea Clinton’s lavish, star-studded wedding ceremony cost upwards of $5 million.

            If you think Obama’s girls weddings, if they get married, will be “relatively simple” and just “attended by friends and family members” you are ignorant of the differences between the GOP and the Democrats, between those with class (like Steve Jobs; note his house and lack of pretense) vs. the nouveau riche (Clintons, Obamas), between those who understand the value of money and those who love to have and spend it themselves while castigating everyone else for having and spending it.

            Lastly: Liberals are markedly less charitable than Conservatives

            1. “Lastly: Liberals are markedly less charitable than Conservatives”
              That’s why Rick Santorum gave 2% to charity and Obama 22% last year. Source- Tax records released for Presidential Campaign.
              BTW- Willard “Mitt” RawMoney asked for an extension until October 2012- just before the election.

            2. Where is Maobama’s birth certificate, real Social Security number, and foreign exchange student college records, proggressive-commie?

      2. What other first ladies have taken foreign vacations? Why Spain?Bush 2 is criticized for his vacations and Reagan took a lot. Most were at their ranches where transport and secret service costs are significantly less. Obama’s Hawaii vacation cost taxpayers $5 mil plus. Family took a separate flight out because Obama had to stay back waiting to sign a bull.

    2. Obviously! The commies in power don’t want to do anything productive with tax money. They just want to lie, cheat, steal, and bring this great country to its KNEES!!!!!!

      Apple defines greatness.

      LibMarxists define HELL!!!!!!

      1. S T U P I D ! ! !
        You troll with big words you don’t understand. What Alice-in-Wonderland world do you think you are living in?
        OK, some basic FACTS – if that won’t hurt your brain over-much.
        Eisenhower was a Republican president years ago.
        Before that, he fought the Nazis. As that, he “fought” the communists.
        Obama is to the far left of the Republican presidential candidates, but about on a par with Eisenhower.
        The first Republican president to fight the communists.
        Troll. Ignorant Troll. Uninformed Troll. STUPID Troll. Please do the rest of us a favor and identify yourself as something we don’t have to take as a personal insult. Almost anything but “American”. That so degrades so many of us.

    3. Were you this upset when Nancy Reagan toured the world, or Barbara Bush or Laura Bush? Protecting the President and First Family has always been expensive, and necessary.

      All Presidents travel around the world — that’s part of their job. And no one took more vacations — ever– than George W. Bush.

      Yet suddenly, presidential travel and security costs are a big deal. What a bunch of hypocrites.

    4. A more interesting question:

      If you’re a Democrat president and your video address is getting mercilessly booed in the Holy Shrine of The People’s Republic of Taxachusetts, how strong are your reelection chances?

    5. You forget one thing. Most of that expense gets spent even if the First Family goes nowhere. You do not sell Air Force One or rent it out when not using it. The Secret Service gets paid, run around the world or not.

      True travel cost money but much of the cost is there anyway, For EVERY President.

      Just a rational thought.

  2. Almost anyone knows better how to spend their money than the US Government. Consider Bill Gates and Warren Buffett – two of the wealthiest Americans. They elected to put most of their wealth into a charitable foundation because they too believe they can put that money to more effective use. That wealth will never be taxed.

  3. In the case of Apple, there’s no question the money is better spent letting an innovative company do what it does best.

    Of course, one could argue that Microsoft and the U.S. federal government are about as equally efficient. Maybe we should develop a “stagnation” tax that punishes corporations for sitting on their hands. Or not.

    The point is that we can’t compare the rest of corporate America to Apple because there’s no comparison.

  4. … argue that Apple ought to pay more of its money as taxes, I’d like to ask: “Who paid for the roads Apple employees use to get to work, most days?” And:“Who paid for the cops who returned Apple’s stolen iPhone?” And … well, you get my point. As for the Hooker Story, that goes back at least a decade! Who was the president then? Oh, wait, at least a decade earlier, that was …? Wait! A decade further STILL! That would be …? My point being, Romney won’t stop it. Nor would Santorum. Nor Ron Paul. It took a mid-level FEMALE manager to bust that wide open. I’d like to claim she’s a liberal, all I can say is she respects the humanity of other women. Unlike the offending agents, who I would love to claim were conservatives but can only say they are pitiful.

    1. try another excuse for “who paid the taxes…” you and i did. and of course the apple employees. why should apple pay more taxes for that? if they create one new job, that job will pay for more infrastructure. if the government creates one more job, that job will pay taxes to support the infrastructure as well, less what it cost in taxes to fund that job. oh! that is more than the taxes, so the government creating a job does not fund any infrastructure. this is pretty deep thinking, but difficult to obscure, except by changing the subject. private job creation is the only thing that grows the economy. even paul krugman gets that.

  5. This is an incontrovertible fact. 100% of the amount of money raised under federal taxation is used to service interest on the national debt, make social security payments, and meet Medicare and Medicaid claims.

    The liberals are spending the country to death and yet Obamacare heaps another layer of entitlements on top of a system that is groaning under its own weight.

    1. The war-economy of the US is, by far, the single largest beneficiary of federal taxes. You want to talk about limiting deficit spending, you have to make SERIOUS cuts to the defense department, or else why bother?

    2. Social Security and Medicare payments are made from funds that are derived from non-income tax sources. Look at the FICA and Medicare taxes deducted apart from Income Tax.

      Not one dime has been taken from general revenue for a Social Security check. Nice try.

      1. bull$h1t, EVERY dime paid out for social security comes from general revenue. You may not remember, or just conveniently forgot, Lyndon B Johnson with the help of the Democratically controlled house and senate moved Social Security funds from the special trust fund into the General Fund.

        Yeah, the democrats moved social security into the General Fund, where it could be plundered and pillaged by the house and congress.

        It may interest you to know that social security was setup with the promise that funds put into it were tax deductible, and funds withdrawn would not be taxed. Guess which party eliminated the tax deduction and then started to tax the social security payments? If you guessed democrats, you are right.

        Sorry, the point wasn’t what the democrats did, but even though the social security deduction shows up as separate on your deductions, it goes into the general fund, and payments are pulled from the general fund. PAP, your comment doesn’t have a leg to stand on.

        1. Our former LT Governor, Bill Halter, was once the Deputy Commissioner 1999–2001 and later Acting Commissioner 2001 of The Social Security Administration. He had previously served as an Economist for the US Congress and the Senate Finance Committee. Later he worked at OMB when we were having Balanced Budgets. Also a Stanford and Oxford Grad (Rhodes Scholar in economics).

          Anyhow, while running for the Senate he was asked about Social Security as it was an issue and he had run the program previously. He stated, without equivocation, that all Social Security checks were paid out from funds received by Social Security taxes and were not and never had been from general revenue.

          Is that good enough for you?

  6. Who doesn’t know how to use their money better than the govt. The problem is the govt isn’t spending their money. As far as Apple is concerned they are probably one of the most efficient companies there is.

    1. Unfortunately, the U.S. government is spending China’s money. With the way China’s economy seems to be headed, they’re going to want their money back soon, too.

  7. What a stupid argument. Apple can decide best how to use its own money. The federal government can decide best how to use its money, but there is much more corruption in government than there is at Apple (no matter which party is in charge).

    Also, very little in government substantially changes when a new president takes over. The Secret Service behavior didn’t start with this last trip to Columbia. Spending money on presidential vacations, including the First Lady and family or not, didn’t get expensive with the Obamas. The President (regardless of who is in office) absolutely needs protection when he travels, as does his family and cabinet members. That’s just the cost of doing business.

    The fact is there are companies which are very good at making spending decisions (Apple), and those that are very poor (RIM). There are governmental agencies which spend money wisely, and there are those which don’t. There are also individuals who budget and spend their money wisely, but those who don’t.

  8. BTW… since when did the term “liberal commie” become an insult??!!?! I’m sure they had mothers that loved them and they made macaroni pictures for jesus too.

    … and it’s an oxymoron.

  9. MDN: Your headline is so one-sided as to be worthless. ANY company probably uses its money “better.”

    That’s because Apple (and other companies) don’t finance pointless wars or have a bloated defense department that spends more than the next 15 nations combined. And as a private company, they don’t have to provide a safety net for the disabled, or veterans, or the adject poor, or the elderly.

    It’s easy to be frugal when you just have to take care of business.

  10. Did Apple benefit from the wars in Iraq and Afghanistan? Does Apple benefit from great highways, airports, air traffic control, police in Cuprtino, etc.? Of course it does. But Apple makes decisions in Apple’s interest ONLY. Governments must make decisions in the interest of ALL citizens. Taxing you, me and Apple is how we “buy” our freedom, our security. I’m appalled that Americans want to spend money today and have their children and grandchildren pay for it! What crappy parents! All of is, including Apple, need to step up to the plate nd PAY FOR what we want our governments to do.

    1. Hey Michael Commie,

      Stuff your PAY FOR where the sun don’t shine.

      Did I approve giving my tax dollars away to WELFARE ADDICTS??????? NO FsCKING WAY!!!!!!!

      Does Maobama steal our tax dollars to give to his comrades, YES!!

      You sir, can straight to Hell!!!

      1. Oh I’m sorry, did I’m say that? God my English not so smart. I take it back. But I do love Fascism, and Mussollino is my hero because he equates business interests with the goals of the State, so if you don’t, you commie bustards, you can straight to Hell.

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