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

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


    1. I think the same people who congrat Apple on this are the ones who support Trump (and those who jump on Trump are calling Apple out as well).

      I think the primary point here isn’t the tax avoidance itself. Every business has fiduciary responsibility to practice it to the best of their abilities (pay as little tax as legally possible). The issue is of moral and social responsibility. It is one thing when a little guy deducts interest on his mortgage, fuel expenses and things like that, in order to reduce the tax burned, so that he could take his kids to Disney World with the tax refund. it is another when a company pays nothing on $54 billion (with a ‘B’) in profit. Or when a business owner manages to claim a massive loss that allows him to pay no income tax for the next twenty years or so… It isn’t about what’s legal; it is about what is morally and socially responsible and right.

    2. I have no problem with Trump using every tax break he can. I feel the same way about Apple. If we don’t want people or corporations taking advantage of the tax law then we all should get together and change the tax law, which is something Tim Cook has said multiple times.

      The problem I have with Trump is his claim that he’s a great businessman but still has a *personal* loss based upon his companies that is almost a billion dollars on one year. Assuming Trump personally owns 51% of those businesses that means those businesses lost about two billion that year.

      Back in Apple’s dark days they didn’t lose a whole lot more than that in their worst year. Did anyone say during that period that the people running Apple were great businessmen? Did anyone say Apple was a great *business* during that period?

      That’s the double standard I don’t get. How can you claim to be such a great businessman and lead businesses that lose on the order of as much as Apple was during its worst period? How can people claim Trump is such a great businessman then soundly put down Sculley, Spindler, and Amelio?

  1. And the problem is? Apple is following US law. If you don’t like it, change the law. Liberals aways want to take something from others because they think they deserve it.

    1. The answer to your question is simple, and has been provided by Warren Buffet, who says he’s still paying a lower tax rate than his secretary.

      “…”I’ll be a fair amount higher, 8 or 9 points higher. The differential between me and the rest of the office, not just my secretary but the rest of the office, was greater than that. […]I’ll probably be the lowest paying taxpayer in the office.”

      Buffett has been advocating for a minimum tax on top wage earners — those like himself who benefit from the fact that capital gains are taxed at a lower rate than regular earnings.

      Warren Buffet isn’t exactly your poster liberal, but he is clearly cognizant of the fact that there is something profoundly unfair abut a system that allows wealthy people to be taxed at lower rate than the ordinary folks.

      Common argument is that the rich pays billions in taxes, making up large part of annual tax receipts. Simple math makes it look dramatic, when an ordinary person pays $25,000 in taxes, while Mark Zuckerberg pays $2 Billion (roughly). However, when those $25,000 represent one quarter of income, that leaves only $75,000 to survive. Meanwhile, Zuckerberg’s income was $12B, making that tax bill represent less than 20%, and leaving him with $10 Billion (with a B) to survive the year.

      So, why is a rich person able to pay only 20% (actually, less) taxes, while an ordinary person ends up paying 25%?

  2. Apple and all the other companies knew the rules when they started stockpiling overseas profits. They knew what the tax laws were, and how much it would cost to bring that money back home. But they didn’t bring it home in hopes of one day getting Congress to pass a law to let them bring it home for free. This is Trickle Down Economics 101. The only thing that happens is the rich get even more rich, and the rest of us are left footing the bill. If Apple wants that money to spend, let them pay their fair share of taxes on it, and they can do whatever they like with it. But letting them have it Tax Free isn’t going to build one bridge, pave one road, or pay the salary of one policeman, fireman, or any military personnel.

  3. Q: Does Apple illegally avoid US taxes?
    A: Of course not. Sorry EU.

    Q: What motivates Apple to avoid US taxes on foreign made profits?
    A: #MyStupidGovernment. Tim Cook kindly and thoroughly explained the problem to the US Senate and BOTH stupid parties ignored him. Both.

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