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Businesses Iphone Hardware

'Paying Taxes Is a Lot Better Than Phony Corporate Courage, Apple' (theintercept.com) 579

theodp writes: Every fall," writes The Intercept's Sam Biddle, "internet and its resident tech mumblers congregate for The Apple Event, a quasi-pagan streaming-video rite in which Tim Cook boasts of just how much money his company is making (a lot) and just how much good it's introducing to the world (this typically involves a new iPhone). This is merely annoying most years; but in 2016, when Apple is loudly, publicly denying its tax obligations around the world, it's just gross." Biddle finds Apple's use of the word 'courage' to describe the corporate ethos that pushed the company to remove the headphone plug from the newest iPhone while offering a new pair of $160 jack-free earbuds particularly irksome: "Removing a headphone jack or adding 20 headphone jacks does not require courage; engineers are very smart, but their job does not typically require much bravery. Courage is more often found in, say, running into a burning school to rescue the students and class rodent. Or, maybe, you could call courageous the act of paying the many billions you owe around the world into the system that ensures those students have all of the resources they need in order to learn and grow. Just a hint: Collaborative spreadsheet software doesn't count [introducing new real-time collaboration features, Cook called iWork a "very important tool in education"].
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'Paying Taxes Is a Lot Better Than Phony Corporate Courage, Apple'

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  • by Pseudonymous Powers ( 4097097 ) on Monday September 12, 2016 @11:26AM (#52870707)
    I have only apathy-to-mild-antipathy for Apple, but think it's pretty abusive of these governments to attempt to charge them retroactively for taxes that they were dodging fair and square, and pretty dangerous and short-sighted for the general populace to so gleefully support these sort of violations of ex post facto.
    • Re: (Score:3, Informative)

      by Kierthos ( 225954 )

      At least in the case in Ireland, the EU is saying that Ireland could not have legally slashed Apple's tax bill to the extant that it did.

      Now, whether Apple knew that this was illegal is the matter.

      If they did, then, yes, they are complicit in tax evasion, and the penalties should apply. If they didn't know, i.e., they were acting in good faith, then no, Apple should not be on the hook retroactively.

      Now... going forward, it will be hard for Apple to claim that they shouldn't pay the "proper" amount of taxes

      • by imgod2u ( 812837 ) on Monday September 12, 2016 @12:32PM (#52871283) Homepage

        The laws have already been changed going forward. These types of tax evasions in Ireland, at least, are closed to new companies and existing agreements will expire in 2020.

        This is actually a case of anti-competition. The EU is asserting that only Apple received the type of tax ruling that allowed it to hide profits behind a mysterious "head office" that wasn't taxed in Ireland.

        It may be true that no other company had done this. But I don't know whether that can qualify as anti-competitiveness since they'd have to show other companies being denied such a blessing.

      • by Oswald McWeany ( 2428506 ) on Monday September 12, 2016 @02:16PM (#52872437)

        Now, whether Apple knew that this was illegal is the matter.

        If they did, then, yes, they are complicit in tax evasion, and the penalties should apply. If they didn't know, i.e., they were acting in good faith, then no, Apple should not be on the hook retroactively.

        I find it highly unlikely that a company as litigious as Apple with such a well stocked "lawyer inventory" did not know that Ireland was breaking EU laws. They probably assumed that they were untouchable- at worst EU would ask Ireland to stop the tax cuts and force Apple to pay taxes going forwards (but not retroactively).

        Regardless of whether or not they knew the law though, ignorance of the law is not a legal defence in any EU country.

    • Re: (Score:3, Insightful)

      Give it up ass-hole. Army of lawyers helped created this tax heavens. Nothing was fair and square.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      I'm tired of even listening to this kind of bullshit anymore. We need taxes to help schools, police, fire departments (and in civilized countries health care) and etc function. They may have LEGALLY avoided taxes, but it wasn't fair or square. It was crooked and fuck them. Apple should pay. Rich assholes who dodge taxes should pay. End of story.

      • by Pseudonymous Powers ( 4097097 ) on Monday September 12, 2016 @11:43AM (#52870865)

        I'm tired of even listening to this kind of bullshit anymore. We need taxes to help schools, police, fire departments (and in civilized countries health care) and etc function. They may have LEGALLY avoided taxes, but it wasn't fair or square. It was crooked and fuck them. Apple should pay. Rich assholes who dodge taxes should pay. End of story.

        The end of the "Rule of Law" story, I guess you mean? Shame. It had its problems, but on average I was a fan. The sequel, "Despotic and Arbitrary Kleptocracy", sounds like it's going to suck.

    • by XXongo ( 3986865 ) on Monday September 12, 2016 @11:42AM (#52870859) Homepage

      I have only apathy-to-mild-antipathy for Apple, but think it's pretty abusive of these governments to attempt to charge them retroactively for taxes that they were dodging fair and square....

      They were lying. I'm not sure that this counts as "dodging taxes fair and square." They were telling one government that their intellectual property was insanely valuable; that's why their offshore subsidiary that didn't make any product could bookkeep tons of profit on that product they didn't make. And they were telling another government that the same intellectual property had little value at all, that's why their offshore subsidiary didn't have to pay licensing fees to the main corporation (which would have been income to Apple.)

      When you lie, and get caught at it, you're subject to sanctions. You're not allowed to pretend all your income was earned in a country that does not, actually, produce any product. That's fraud.

    • Re: (Score:3, Informative)

      by greg1104 ( 461138 )

      If Apple paid their taxes the IRS wouldn't have to shake me down for cash.

      • by Terwin ( 412356 ) on Monday September 12, 2016 @12:47PM (#52871437)

        If Apple paid their taxes the IRS wouldn't have to shake me down for cash.

        The IRS does not need to shake you down now, but it does because we are accustomed to re-electing the politicians who 'bring home the bacon', and all that bacon costs a lot of money.

    • Re: (Score:3, Informative)

      If someone sells you a bridge and you pay for it, when you find out it's a scam you don't actually GET the bridge.
    • I have only apathy-to-mild-antipathy for Apple, but think it's pretty abusive of these governments to attempt to charge them retroactively for taxes that they were dodging fair and square, and pretty dangerous and short-sighted for the general populace to so gleefully support these sort of violations of ex post facto.

      I have only snickering-to-mild-laughter for the term "dodging fair and square". Perhaps it's even more dangerous to try and color tax evasion as some kind of good loophole to continue to allow mega-corps to shove billions through.

      As far as the opinions of the pitchfork-weilding general populace? Let's be realistic as to their frustrations against Apple or any other tax-dodging mega-corp. The irritation becomes rather obvious when Joe Taxpayer shells out 20%+ of their income to taxes while watching billio

    • by Moof123 ( 1292134 ) on Monday September 12, 2016 @12:52PM (#52871477)

      These large corporations have use the power to influence governements and the tax rules they operate under. As such I find it disingenuous for a corporation to argue that they follow all applicable laws and pay all legally required taxes while simultaneously tearing open numerous new loopholes to use to further dodge taxes, and fighting like hell to keep the old ones open.

      As a society we all need to pay our fair share. I don't mind paying my taxes, as long as everyone else is roughly paying their fair share too (low earning folks who pay 0% are indeed paying their fair share). My taxes are too low (12% federal net income tax last year, 7% state), and I'd be happy paying more. I am not happy when a wickedly rich company like Apple pays far less, or when hedge funders and CEO's use loopholes they bribed into law to pay a far lower percentage than me despite making far more.

      Those making $1M or more a year really should be taxed at a 70+% incremental rate. Frankly we have shown that leaving too much idle cash in the hands of the rich allows them to overly influence our democracy (I cringe using that word for what we actually have). Nobody should have as much influence on a democratic system as a Koch brother does.

    • by mjwx ( 966435 ) on Monday September 12, 2016 @01:35PM (#52871955)

      I have only apathy-to-mild-antipathy for Apple, but think it's pretty abusive of these governments to attempt to charge them retroactively for taxes that they were dodging fair and square, and pretty dangerous and short-sighted for the general populace to so gleefully support these sort of violations of ex post facto.

      Erm, they aren't charged retroactively. Retroactively implies that the law was changed and payments were backdated.

      Apple is being asked to pay the amount of tax they were supposed to pay in the first place.

      I think you need to spend a little time with the dictionary and learn what retroactive means.


    • Fair and square you say? -under which article or tax dodging does that fall in the taxation guide?

      Tax benefits are there to stimulate growth, help the poor, encourage small businesses and all sorts of other forms. It's not there for a supremely rich company to rape the system.

      It takes years to investigate and prove this stuff. It's only right they pay what they DODGED with interest.


      IF you let it slide then everyone will be ENCOURAGED to steal -I mean "dodge" because getting away with it for 10 years
  • by captaindomon ( 870655 ) on Monday September 12, 2016 @11:27AM (#52870711)
    It's important to understand the difference between tax avoidance and tax evasion. Tax avoidance is taking all the deductions, programs, etc. you are entitled to under tax law. We would never expect an individual to not take a tax deduction or child credit etc. because they have "courage". That's just bad personal finances. Tax evasion, on the other hand, is illegally trying to avoid paying taxes you owe. For example, lying on your tax forms.
    I have no problem with Apple doing legal tax avoidance, and all their investors (including a lot of your personal retirement plans, etc) would agree. Anything else would not be patriotism, it would just be bad finance practice. If they're doing something illegal, that's another issue. But let's not slam a corporation that is legally following tax law. Instead, let's slam legislators and encourage legislation to close tax loopholes and simplify the tax code.
    • by Sebby ( 238625 )

      The moral thing to do is pay your fair share of taxes.

      But instead Apple feels entitled to pay as little as possible (wether the tricks they used are illegal or not remains to be seen, I guess).

      • How much more should you pay than what your calculated tax burden is in order to be moral?
        • Re: (Score:2, Insightful)

          by Sebby ( 238625 )

          Apparently you didn't get the hint of my post - Apple is deliberately skirting the spirit of the 'tax rules' in order to avoid/evade paying taxes (the difference is wether what tricks they used were illegal or not - see what I did there?)

          To go around and claiming "courage" for things they do while purposely keeping their hordes of cash for themselves/investors just makes them look like the jerks they are.

          But of course, all the fanbois come to Cook's rescue, so why then should he bother justifying himself, i

          • by mveloso ( 325617 ) on Monday September 12, 2016 @12:16PM (#52871127)

            There is no such thing as "the spirit of the law." That's a weasel phrase used by people that don't like the outcome. The reason the law is written down is so that there is no ambiguity.

            There may be hundreds of people voting for a given law, and each one has his or her reason for voting on that law. Do you mean to say that when adjudicating a case you need to take the personal opinion of every lawmaker into account? That would be the true "spirit of the law."

            If you do that, then what's the point of the law in the first place?

            • by Sebby ( 238625 )

              That's a weasel phrase used by people that don't like the outcome.

              Kinda like "It's total political crap"?

            • by imgod2u ( 812837 ) on Monday September 12, 2016 @12:44PM (#52871399) Homepage

              There are plenty of cases where "spirit of the law" comes into play. That's why we have courts and justices interpreting laws. But tax law, in general, is pretty open-and-close. However, in this case, there is some interpretation to be had. Including whether or not Apple's tax advantage was available to any other company.

      • by FlyHelicopters ( 1540845 ) on Monday September 12, 2016 @11:50AM (#52870911)

        The moral thing to do is pay your fair share of taxes.

        What exactly is my "fair share" of taxes?

        Perhaps you don't understand how it works, but the tax code is far more specific than that, such a system where everyone pays whatever they think their "fair share" is wouldn't work.

        • by Sebby ( 238625 )

          How much (in %) do you pay. How much does Apple/Corporate America?

          Therein lies the answer.

          • How much (in %) do you pay. How much does Apple/Corporate America?

            Therein lies the answer.

            I pay as LITTLE as I can legally get away with....I expect that Apple does the same.

            Again, as another earlier post mentioned, Tax Avoidance is trying to pay as little as possible within the confines of the law. I have no problem with that.

            If YOU want to pay more than you legally are required to do, then fine, go have fun with that.

            There is no "morality" when it comes to tax payments. You almost act like my money

          • How much (in %) do you pay. How much does Apple/Corporate America?

            You might be surprised what I pay...

            My wife and I make in the comfortable 6 figures and I probably pay far less in terms of percentage than you do... Or at least the average person does, because we're both self-employed and thus have much better tax options than most people do...

            Therein lies the answer.

            No, it really doesn't, because 47% of people in the US pay ZERO percent... Or really close to it...

            "FAIR SHARE" might be the same percentage, but then you're asking for a flat tax. Which I'm actually fine with... But it has to b

    • Thank you for agreeing with the EU that Apple owes back taxes to Ireland.
    • It's important to understand the difference between tax avoidance and tax evasion. Tax avoidance is taking all the deductions, programs, etc. you are entitled to under tax law. We would never expect an individual to not take a tax deduction or child credit etc. because they have "courage". That's just bad personal finances.

      Yet most people are unknowingly `courageous` because they don't have a tax team behind them.

    • Apple did not follow RU (or earlier EEC) tax law. They cut an illegal agreement with Ireland to pay far less tax than the EU trade laws allow. Apple was aware it was illegal (or do you believe that Apple lawyers didn't research the EU law and just magically picked Ireland to strong arm into breaking their trade laws). Basically, they should have to pay Ireland the taxes that were avoided, plus interest, and an additional penalty of twice that to the EU as a whole, since we can't put Apple in jail.

      And make the fines non-tax-deductable, so as to keep the US from losing out on their fair share of the tax Apple should have paid the US as well.

      You should not get a tax deduction for breaking the law. The little people don't.

      • How can an agreement with a country be illegal? Answer, it can't be. The EU just decided after the fact, that they thought it wasn't right and are making it illegal... remember Apple has been doing this for a long time, out in the open. If it were not legal why did it take so long for the EU to figure this out?

        • by swb ( 14022 ) on Monday September 12, 2016 @01:06PM (#52871635)

          If a country enters into a binding diplomatic agreement with other countries to regulate X, they can't then change the rules on X for their own benefit. Basically the agreed to align their sovereign law with the diplomatic arrangement.

          In terms of figuring it out, how simple do you think this agreement is on paper? Six lines in the middle of an A10 sheet with room for big signatures?

          I would imagine that the EU tax regulations extend for volumes and that almost no one person understands them fully. I'd wager that most of the regulations are in extremely abstract terms and are not highly specific, allowing Apple to define their business to fit where they want it to fit in the tax code, rather than the tax code defining their taxing obligations.

          It takes an actual tax court ruling to actually decide if what Apple is trying to do meets the letter of the law.

          And at the end of the day, there's politics that rules it all. The EU isn't going to allow member countries to act as tax havens, especially with the volatility of north/south economies among member states. They're going to demand maximum compliance with tax revenue.

          The global demands for revenue will keep Apple from finding another tax haven it can use unless it chooses to align politically with a regime powerful enough to shield it from the US and the EU, but then it runs the risk of other kinds of coercion which might cost as much or more.

      • quote [cnbc.com]:

        the Irish revenue doesn't do deals. they issue opinions to clarify, a tax situation for individual companies. but we never do deals. they have to apply the tax law, which is passed by parliament, and they have to do so without fear or favor across all companies. so I know there's general tendency to think that apple isn't paying enough tax, but our point is that if they owe tax, they do not owe it to the Irish authorities. they may owe it elsewhere, but not to the Irish authorities

        Do you have any real

        • I believe the way this happens is similar to what in the US is called a "Private Letter Ruling"

          Basically a business or individual wants to know if a particular tax or other business strategy, basically a loophole, is legal. So they hire a specialty law firm and pay them to document the plan and then send it to the IRS or another regulator. What they get back is an opinion by that regulator that what they are doing is legal or not. Its not binding in court though but it might protect you from penalties or cr

    • The argument is the loophole did not, in fact, exist. The Irish government allowed Apple to think such provisions existed but the EU have now ruled the arrangement constituted illegal state aid. Consequently the EU is leaning on Ireland to collect the taxes it should rightly have collected in the first place. Apple, with the help of the Irish government, evaded tax, not avoided it.

      Things are rarely black and white. It's why these lawyers get paid so much.
      • by swb ( 14022 ) on Monday September 12, 2016 @12:51PM (#52871459)

        Taxes seldom make common understandable sense, even at the US 1040 form level. I've done the long form, by hand, for my 3 person, two income family with $4k in stock ownership. Even with such a basic, boiler-plate kind of setup there were many places where there was ambiguity (at least to me, a non-tax expert).

        At the level of multinational corporations it's all totally ambiguous. You basically have only the complex letter of the law and past rulings to go on and with a company like Apple who designs a complex product in one country, builds it in some others, and sells it globally, they have a wide latitude to define the nature of where and what they do for tax purposes and the only way their unique setup will get evaluated is by the ultimate arbiters of the tax law, which in this case sounds like the EU.

        Apple thought they could construct a tax shelter scheme and Ireland was a willing participant, probably with backroom deals that Apple would guarantee a certain portion of the tax-exempt capital on deposit in Irish banks as a long-term deposit, enabling Irish banking to basically get a capital infusion.

  • this one seemed to be the best answer, http://www.theverge.com/2016/9... [theverge.com]
  • by Vermonter ( 2683811 ) on Monday September 12, 2016 @11:30AM (#52870739)
    People who brag about their generosity are typically both A: not actually that generous, and B: doing it for personal gain
  • The whole "tax headquarters" thing is obsolete. The taxes a corporation pays shouldn't depend on their headquarters location. That just invites tricks.

    Perhaps "profits" are just too hard to track internationally and revenues should guide taxes instead.

    • Re:HQ Redo (Score:4, Interesting)

      by hierofalcon ( 1233282 ) on Monday September 12, 2016 @12:33PM (#52871293)

      Or perhaps we should eliminate the fiction that companies pay taxes in the first place and just tax the people directly, thereby cutting out the middlemen. Any tax dollar a company pays to a government taxing authority is one that at some point in time will come from the price paid by a person for an end product. Everything else is just accounting games.

      It is delusional to think that if every government extracted all the money they want from corporations, personal free cash flow would improve aggregated over a large enough sample of people. Every company would simply raise their prices and cut labor costs more to keep their desired profit margin and you'd end up spending your "tax savings" on every purchase you make. Maybe you don't buy Apple equipment - but you'd pay the higher prices on groceries, clothes, and other things.

      Make America great? Eliminate corporate taxation completely! That would have the benefit of cutting out a big chunk of legal, accounting, and legislative burden in one fell swoop. Increase the income tax rates on the people to compensate. As Heinlen said TANSTAAFL - There ain't no such thing as a free lunch. While we're at it, eliminate sales taxes, lodging taxes and all the other B.S. taxes we pay in bits and drabs and increase property taxes to compensate. Reduce the variety of all these garbage taxes to just two (income and property) and pay them once per year and you'd see a lot better accountability from the people passing legislation.

  • Or, maybe, you could call courageous the act of paying the many billions you owe around the world into the system that ensures those students have all of the resources they need in order to learn and grow.

    No that's just called being responsible to society. I don't approve of misusing the word courage for removing earbuds any more than approve of it's misuse for trying to shame a company for not paying taxes. It's just the "running into a burning building" and stuff like it, and corporations can't run into burning buildings, so don't expect them to be courageous.

  • Let's say Tim's name were 'Jack' instead. There might be some satisfaction in removing the "Head" of Apple, named "Jack".
  • Once they get a total, Apple will dispute it legally and probably end up paying 10% of it as a settlement, then claim how morally responsible they are. Hail Apple.

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