Tax evasion - How evil is Apple?

It is just doing what it is supposed to do. Make money, by whatever means possible. Morality or ethics are just hindrances.
You can not blame a tapeworm for being a parasite. However, it should be removed nonetheless.

Rotten to the core?

Standard practice for multinationals. In that, Apple is no worse than others.

The problem is not with Apple but with the people who write tax law in the first place.

They expect to pay $7 Billion in 2013, more than any other US Corporation. All of their maneuvers are legal. That’s why it pays to hire the best tax attorneys.

It would be immoral for them to pay more than the Congress or the State of California have demanded of them through legislation. If they should pay more, change the tax law.

Tax “avoidance” is not only “not illegal”, but it is “proper stewardship” of money and assets, whether they belong to one personally or one is merely responsible for their distribution, storage and accounting in a business. Tax avoidance is good business. The alternative, doing business in such a way as to maximize one’s (or one’s employer’s) tax liability, is irresponsible, bad business.

Tax “evasion”, which is hiding income from tax authorities illegally, is a crime. I do not believe that anyone at Apple has been charged with commission of this crime, have they?

If the rules are on the books “to avoid tax, do this, and this, and this”, and they do “this, and this, and this” – because it makes economic sense for them to do those things, then how can anyone call it a crime? How can it be immoral?

Since modern governments tend to go deeper in debt as their revenues rise, I’m beginning to think that it may be a morally good thing to starve them.

This is not the most morally reprehensible thing Apple has done, but it is still evil. I don’t know why the artsy crowd still apologizes for them, even while crying “Outrage” over other causes. I guess they like their shiny toys too much.

Very evil. Since most of their profits come from doing business in the US then they should pay their fair share of taxes.

I was seriously considering making my next computer an Apple. Then I heard about conditions in their million employee factory and their tax evading practices. When is this country going to stop subsidizing labor in other countries and taxing us for the privilege? I am sick and tired of trade agreements that rob U.S. citizens and agriculture giants robbing foreign farmers and undercutting American ones.

G.E. doesn’t pay taxes and oil companies manipulate prices and suck money out of our economy. If any federal employee is impeached it should be the House and Senate. Then we could also clean out the Supreme Court. The problem isn’t in the executive branch, it is in the legislative branch and the supreme court.

The only power I have now is to refuse to buy any more Apple products.

Apple is so eeevvil because it is so successful, so powerful and dreams up and creates such magnificent excellence. Apple radiate beauty beyond compare and that tears up a lot of sad sacks with jealous rage. HA! Such an evil thing to do.

@gondwanalon drugs are bad

One thing to consider here is that any attempt to stop this money-shuffling would hamper any US-based company that wishes to expand overseas. That may cost more than continuing to allow companies to play a shell game with their finances.

Just so I know I have this right. The complaint seems to be that Apple has moved much of it’s business to other countries with lower taxes. We have the highest corporate tax rate in the world but if Apple was really nice they would just pay it. California with the highest state incometax rates, is likewise complaing that Apple is moving it’s business elsewhere. Quite frankly I’m surprised that California has any businesses left considering their detrimental regulatory and taxation environment. They’ve already lost most of it but now they’re down to just whining about it leaving. No one even considers the idea that a more competitive environment might bring some of it back.

I personally should be complaining that many customers actually go to the Safeway instead of my store just because Safeway is cheaper. Safeway is being completely unfair to me and the customers must be morally bankrupt.

We have been arguing for years about punishing businesses. The more punishment you deal out the less likely they are to stick around. Hell, even Hollywood is moving it’s studios out of state to more tax freindly environments. The last one out should turn off the lights.

@Jaxk I could be wrong, but I think the actual complaint is that whatever taxes Apple doesn’t pay, you , Mr. Small Business Owner, wind up paying. There is a strong sentiment of the rich becoming richer by passing their expenses on to the non-rich in inequitable ways. Right or wrong, that’s how many feel. Whether it be local businesses going under because they can’t get the bulk discounts the big corporations get, or the middle-class person paying twice the effective tax rate of a billionaire, many people are growing resentful.
At the end of the day, Apple is a business. They exist to enhance shareholder value, and really have no responsibilities beyond that. And if paying less in taxes helps them fulfill their duties to shareholders, they would be irresponsible not to doso.

Tax evasion is illegal.
Apple practiced tax avoidance

“Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one’s taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands”

_Judge Learned Hand

“Congressional investigators found that some of Apple’s subsidiaries had no employees and were largely run by top officials from the company’s headquarters in Cupertino, Calif. But by officially locating them in places like Ireland, Apple was able to, in effect, make them stateless — exempt from taxes, record-keeping laws and the need for the subsidiaries to even file tax returns anywhere in the world.”

This should not be legal by anyone’s standards. I can only think that if it is legal, that is because no one ever thought that a law would be required to inhibit a company from doing this. @josie, you once asked on Fluther When does a tax deduction become a tax loophole? And I answered, “It is the difference between the spirit of the law and the letter of the law”. This is a perfect example of what I meant. Forming employee-less subsidiaries may be literally legal, but those who wrote the tax code could not possibly have hoped that it would be taken advantage of in this way.

Apple has not simply taken advantage of tax laws as they have been designed to help corporations. It has perverted those laws, squeezed and twisted them until it is impossible to see why how these actions can be legal. This is the sort of thing that drives tax reform. Hopefully, this loophole will be closed.

But what makes Apple evil in this case is that they should know better than this. All of their advertising is directed at the kinds of people who will resent this kind of abuse of the tax system. Apple users are not big on the Ayn Rand. Their customer base is made up of people who expect better from Apple, and Apple should know better than to disappoint their own customer base on such an enormous scale.

The antipathy here is staggering, though hardly surprising in this forum, and totally misdirected, as usual in such cases.

Whatever “the intent” of the Tax Code was or is, it is a monstrosity not created by Apple, but which they are forced to live under, same as the rest of us, their competitors and suppliers as well. If they broke the law, then they – the executives who directed this method of accounting and tax sheltering – should be held to account. I doubt that will be the case, however.

But if they haven’t broken any laws, then the problem is with the laws, not with Apple or any other corporation, large or small, domestic, international or multinational, who takes advantage of the laws as they are written.

And if Apple was complicit in some direct way in making the law to suit itself, then that’s an indication of corruption in government as well as with Apple… if they’re guilty.

Here is perfect evidence that the Tax Code is too complex and Byzantine, is susceptible to (apparently) fairly simple gaming… and yet Apple is the bad guy for (apparently) exposing and using the laws as they are written by others, to suit its ends. Amazing cognitive dissonance. Hate on, haters.

@jerv

I live with the same tax laws as Apple. If I can find a deduction, I take it. When I incorporated I looked at Nevada for those same reasons. It turned out it wouldn’t have helped me. I don’t hold anyone to a different standard than I hold for myself.

If you recall the Buffet rule, Buffet was saying he should pay more taxes. When anyone said he could pay more if he felt that way, you all defended him saying no one should or would pay more than is required. The same argument held for Obama himself. How can you now hold Apple to a different standard?

The tax code is too complex. It incentivizes corporations to manage to the tax code rather than to thier business. I think that is wrong. But unless we simplify the code it will continue. Trying to simply glob on additional requirements, new categories, or ‘if this then that’ clauses won’t fix it. Congress is not smarter than tax attorneys. Hell, they’re not smarter than a bag of hammers.

@Jaxk My real issue is with the over-incentivizing caused by dropping the long-term capital gains tax from 20% to 15%, and doing so without tiering the way, say, earned income is. If some of that money actually followed the theory behind the tax cuts and trickled down, my opinion would be different. As for corporate taxes…. well, there are enough loopholes and such that (and I think we agree on this) it needs to be torn down and replaced with something simple and more sensible.
While I would like to see a way to end the shuffling and have taxes paid on revenue where the revenue is generated rather than where the corporate head office is, realistically, there is no way to do that without severe repercussions; at best, making things more complicated than they already are. I don’t like it, but I think that allowing the shuffling really is the lesser of many evils.
I don’t feel anyone should pay more than is required, but I think we differ on the definition of “required”. It’s not people taking advantage of the system that I have issues with so much as the fact that the system itself is flawed. Does that clear things up a little?
Also note that Obama has a totally different set of responsibilities from a CEO; he is responsible for the United States and all of it’s citizens, not just the ones that gave him money.

They didn’t do anything illegal. Morality is pretty subjective so that is harder to call.

Do Democrats and Republicans agree about changing the tax laws? And the need to solve this on an international level? In Europe right now there are many heated discussions right now. Even the UK seems to change their strategy.

@mattbrowne Both sides agree that things need to change, but have very different ideas on how.

Republicans generally want taxes to be low; some want low taxes at any cost, some are so radical as to believe that any taxation is theft (though quite a few in that group would do a complete reversal and push for 250% taxation if a Democrat agreed with them), and some dissenters within the party want reasonable tax cuts balanced by logical and humane spending cuts. (They also are seen as traitors by some since they are willing to work with Democrats and try to come up with bipartisan solutions.).

You have all of those positions inside just the one party while the Democrats are historically even less unified, so you can imagine how hard it is to get both parties to agree on anything.

@jerv Gives an insight as to the Republican side. The Democrats are also beginning to urge tax reform to clear out a lot of the exceptions, and level the playing field for all so. But even doing that flies in the face of one big issue: Congress is notorious for granting one off tax exemptions, things like “no capital gains on investments in plants and equipment domiciled within 50 feet of such and such creek” which would be for one particular company.

Tax reform would clear out all those exceptions.

Democrats look at tax reform as a way to increase taxes by getting rid of exceptions. Republicans look at it as a way to lower the tax rate by taxing everything on the same basis .

@glacial
Forming employee-less subsidiaries may be literally legal, but those who wrote the tax code could not possibly have hoped that it would be taken advantage of in this way.

Then they should not have written it that way.

@josie It’s a huge mistake to assume that lawmakers are gifted with foresight in the face of overwhelming evidence to the contrary.

@josie That would perfectly acceptable logic… if the company were run by a ten-year old. But it’s not. It’s run by a group of adults, with morals and the ability to understand and appreciate what taxes are, what they do, and what the point of the tax code is. There is a difference between taking advantage of rules that were designed as incentives to help businesses grow, and doing something that wasn’t explicitly made illegal because it was inconceivable that anyone would do it.

The point of the tax code, for anyone who can’t comprehend it, is to calculate one’s tax liability. The tax code is deliberately made complex so that most people won’t be able to take full advantage of its Byzantine rules and requirements. If companies can figure out ways to legally reduce their liability by taking advantage of the rules, even to the extent of gaming the system, then more power to them. No one is obligated by any silly moral rules to maximize their tax. The idea is absurd and completely contrary to any reasonable intent of tax rules.

@CWOTUS “The point of the tax code, for anyone who can’t comprehend it, is to calculate one’s tax liability.”

This is an oversimplification. Yes, of course it is meant to calculate one’s tax liability – but what a person’s (or corporation’s) tax liability is depends on the will of the government (i.e., the will of the people) when the code is written.

I disagree completely with everything else in your answer.

In that case, you should tell us how you personally maximize your own taxes, so that we may all follow your glorious and benevolent example.

@CWOTUS You know very well that that is not what I am suggesting. It does not help the discussion for you to pretend to be deliberately obtuse.

Rags has it right. Their job is to make money for their shareholders, and that’s what they’re doing. It’s an amoral goal.

@glacial Don’t confuse the will of the government with the will of the people. While we call ourselves a Democracy because we hold elections, we are actually a Republic, and our elected officials will do as they damn well please so long as an uninformed populace keeps voting them into office.

@jerv
@glacial
I have a great idea.
And perhaps a solution to a problem.
Let the legislature write whatever laws they want.
Then, let us, the subjects of their whim, decide unilaterally how we want to interpret and comply with the laws.
If you decide a certain law demands you pay more in taxes, you can go ahead and pay.
If I decide a certain law gives me the opportunity to pay less taxes, I will happily do so.
And if somebody else decides different than either of us, screw them. Have a straw poll and either ignore them or send them to prison.
And everybody will be happy!
Right?

It’s amoral to make money for your shareholders unless you are retired and living off your dividends. Morality is subjective in many situations.

@josie Look how ill-informed the average legislator or judge is, and remember that they are far more educated than most Americans. Unless we implement competency testing before one is allowed to vote, true anarchy would be better. Then again, the way power and money are flowing in this country, we really are not much better than many Banana Republics; a virtual Plutocracy. I predict that, barring a major change, we will actually become one within my lifetime… and my family has a history of short lifespans, so it won’t be very long at all!

Perhaps we should link Apple’s conduct (though legal) to the missing school shelters in the Tornado Alley area. We should make Apple and all the other multinationals think about the dead children. Trapped under debris. Drowning. Teachers unable to help. As Apple doesn’t seem to care about the exploited Foxconn employees in China, perhaps dead children in America is a wakeup call.

http://www.huffingtonpost.com/2012/02/03/apple-charity-donation_n_1253185.html