Apple named biggest corporate tax avoider in U.S. after booking $218 billion of profit offshore last year

“Apple has been named as the biggest corporate tax avoider in the United States after booking $218.55 billion (£171.6 billion) of profit offshore last year,” Keith Gladdis reports for The Daily Mail. “The tech giant was able to save $65.08 billion (£51.1 billion) that it should have paid in tax thanks to its convoluted arrangements.”

“The report revealed that last year three quarters of the Fortune 500 companies use subsidiaries in offshore tax havens where they sent a total of $2.42 trillion (£1.9 trillion) of income,” Gladdis reports. “In the US alone this amounted to $715.62 billion (£561.9 billion) in tax which they avoided paying.”

“The study was written in the US by pressure group Citizens for Tax Justice and the Institute on Taxation and Economic Policy,” Gladdis reports. “Matthew Gardner of the ITEP said: ‘The hard fact is that the US tax code incentivizes tax haven abuse by allowing companies to indefinitely defer taxes on offshore profits until they are ‘repatriated.’ The only way to end this kind of tax avoidance is by closing the loopholes in the tax code that enable it.'”

MacDailyNews Take: In other words: What Apple does is perfectly legal.

Note: “Citizens for Tax Justice” is generally considered to be a left-wing organization. “Institute on Taxation and Economic Policy,” as well as the associated Citizens for Tax Justice, has been characterized as liberal.

“In August, the EU hit the company with a $14.39 billion (£11.3 billion) tax bill because it viewed the ‘sweetheart’ deals with Ireland as a breach of European law,” Gladdis reports. “Apple’s chief executive Tim Cook has called attempts to make it pay more tax ‘political crap’ and has said that the company follows all relevant laws.”

Read more in the full article here.

MacDailyNews Take: Tax avoidance is legal. And smart. And a major part of Apple’s fiduciary duty to shareholders.

Tax evasion, which Apple does not practice, is illegal.

The tax laws, especially for multinationals, are convoluted. Hence, so are Apple’s tax strategies when following the tax law labyrinth.

The reason Apple and so many other multinationals do not repatriate profits is because U.S. corporate taxes are too high.

Legally keeping your hard-earned money out of government’s wasteful, inefficient, unaccountable hands is a laudable practice.

Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other. — Ronald Reagan

SEE ALSO:
Ireland’s Finance Minister Noonan: Apple tax appeal may take four years, maybe more – September 23, 2016
Apple’s EU tax nemesis Margrethe Vestager takes aim at other U.S. companies’ offshore profits – September 19, 2016
The ‘Brexit-Apple’ connection: What in the world was Margrethe Vestager thinking? – September 12, 2016
EU ministers line up to take tax bites out of Apple – September 12, 2016
Former EU competition commissioner: Vestager claim that Apple owes back taxes an incorrect use of EU law – September 2, 2016
Irish government to fight EU on Apple tax – September 2, 2016
Treasury accuses EU of trying to steal U.S. tax revenues with Apple decision – September 1, 2016
Irish residents opposed to EU’s tax demand of Apple – September 1, 2016
Apple Inc. pushes back against EU tax grab – September 1, 2016
Apple may repatriate billions of dollars next year after new U.S. President takes office – September 1, 2016
U.S. tax code allows for dramatic retaliation against EU overreach in Apple case – September 1, 2016
Apple CEO Tim Cook on EU tax demand: ‘No one did anything wrong here and Ireland is being picked on… It is total political crap’ – September 1, 2016
U.S. Treasury: The European Commission’s retroactive tax demands on Apple are unfair – August 30, 2016
EU demands Apple pay massive $14.5 billion in taxes plus interest – August 30, 2016
U.S. government warns EU: Do not hit Apple with a massive back tax bill – or else – August 25, 2016

50 Comments

    1. In general the headline, in today’s sorry world, is a red herring, a buzzer for Pavlov’s dogs, a cynical generator of memes and talking points.

      Assume every headline to be a deliberate prevarication or a provocation! Truth is not blared from the front page or the podium; it quietly inhabits the crevices of a story, which need to be scraped out with the trowel of critical thinking.

    2. This is a very idiotic article written by Economic and Financial imbeciles who conflate World Wide Revenue with profits and assume that all earnings can be taxed away! What maroons.

      They also assume that all earnings are booked off-shore from the United States to avoid US taxes instead of the actual fact that ALL earnings are actually eventually taxed in the US!

      1. That is plain stupid.

        • How many times have you paid MORE taxes that you owed?

        • How many times have you ordered something from out of states and did not pay taxes because of it? Technically you should. Why did you avoid it?

        Why do you use the “avoider” word against Apple when it is the government that wrote the laws? I know why. You don’t want to criticize the hand that feeds you. Ergo – your self serving criticism of Apple, who follows the rules.

  1. Anyone who takes any deduction is a tax avoider.

    What is particularly egregious here is that no one is acknowledging that Apple is paying more taxes than anyone else, Apple has already paid their billions legal U.S. federal, state, and local taxes, not to mention foreign taxes on their overseas earnings, and all the sickening vultures are fighting over what’s left. If Apple tries to bring their remaining earnings home, just for letting the money into the country, the United States Federal Government, the most sickening vulture of all, wants a 35% cut like some freaking mafia organization.

    There is no doubt whatsoever that Apple not only deserves to keep their earnings but would do much more good with them that the governments ever will.

    65 billion dollars in the hands of the U.S. Government. Big whoop. It will barely pay a fraction of the interest on the U.S. debt for the year. It’s just like setting it on fire.

  2. Apple should repatriate all of these massive profits they have earned overseas and pay the taxes the media claims it owes, and then use the repatriated money to build massive coal fired power plants to generate electricity to run its data centers, and also use the money to build self-driving school buses that are programmed to crash into old folks homes and burst into flames

  3. I see this coming to a head.

    If you want big corporations, and or persons, the world over, to pay more or some or their fair share of taxes or the burden to society, then you must change the tax code and apply them to everyone in a fair way. Loopholes are BS, but legal, and for that you can’t complain. You can change the rules from this day forward, but you must change them and hold not only the entity you are pointing fingers at, but yourself accountable.

    Too often the well meaning or “good guy” has to bear the burden of others, who take advantage of the system.

    Is it smart of non-tax payer to use the laws for their own gain or advantage? Yes – but it’s still not fair, as the those who pay taxes more or less didn’t write the rules that govern them.

    We all pay more for everything – while others pay less. If we all knew how to manage the system for our maximum benefit, society, economy, and government would collapse.

    I think a sliding scale flat tax without loopholes could fix this. Though I think I am screwing myself for saying it. No deductions, even if you are a $&”! businessman and lost $900 million in a year. There is no need for me to cover for your lack of business acumen.

    Again, if I am missing some aspect of the system and it’s painfully obvious I don’t know what I am talking about, you are welcome to educate me and my fellows on why the system currently is good or how it could be better.

    Example –
    In California, Prop 13 helped land owners (I am one) but screwed schools, and good programs meant to benefit our children. I am speaking of music, arts, sports etc.

    1. For corporations, maybe a total deduction ‘ceiling’ based on number of employees. This would prevent excessive deductions by large corporations with small employee counts. If there are corporations that have virtually no employees, they would be able to claim few deductions if any. This may encourage large companies that can support the employ of large number of people to do so.

    2. I think you forgot to define “fair share”. No one has dared define that since it is so subjective.

      I think those who use government services should pay for them. Isn’t that fair. To many that may sound stupid, but it’s my definition of “fair”. The Amish don’t pay taxes because they claim not to use government (or public) services and yet they do (the roads, the hospitals, etc. I have seen them). Stuff like this makes defining “fair” difficult.

      I do not use many government services so I should pay less taxes for what I get (ie infrastructure and defense). I should not have to pay for food-stamps nor welfare because I don’t use them. Again, part of my definition of “fair”.

      So what is your definition of “fair”? Once you disclose that then your comments/arguments can be better understood.

    3. “The only way to end this kind of tax avoidance is by closing the loopholes in the tax code that enable it.”

      They better be careful what they wish for because what they are ignoring is that Apple or any other corporation can and WILL move their company out of the country and move it to a more favorable tax country. This moron’s act as though it can’t happen or won’t. It will if it makes more business sense.

      Their simplistic ignorant point of view is disturbing.

    4. The act of taxing business in general is just a convoluted secondary tax on the public with improved political talking points.
      Every dollar (or what ever currency) taxed to any company is 100% passed straight through to the price the customer pays for a good or service.
      Just be straight forward and raise individual peoples taxes. Remove all the byzantine corporate tax law that really just funds the pockets of accountants and lawyers, hampers small business with overly complex rules, and adds to the general bureaucracy and cost of government.

      1. I am not an economics major. However, one way or another, everyone pays. If you receive benefits, you should pay. You pay what you can bear. Since tax is on profits, hiding profits, seems a little disingenuous. Not illegal, but cheating to say the least. Leveraging special connections to make this happen leaves the little guy out to dry, as they have few resources to take advantage of the loopholes.

        Think about it, if the middle class has to pay a higher percentage, they are the ones who bear the brunt of the tax burden and as a result have less disposable income.

        As far as not taxing corporations, they will end up being a loophole that executives will take advantage of, with expense funds, instead of personal bank accounts. To not tax a company, they have to show no profit. Their balance sheet needs to be nil.

        It’s a big Charlie Foxtrot

  4. If the government wants to change the tax code they are in their right to do so.
    However the government ever doing anything is highly unlikely. The politicians are generally petrified of their lobbyists and won’t do anything to piss them off.

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