“Apple, the world’s most profitable technology company, doesn’t design iPhones here. It doesn’t run AppleCare customer service from this city. And it doesn’t manufacture MacBooks or iPads anywhere nearby. Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states.” Sure, this is all legal for companies to do (and Apple obviously isn’t alone) but it does show you how much sense of morality companies have. Answer: none. But hey, it’s legal, and the law is never wrong, right?
Don’t like it? Work to fix the loopholes. Having a ridiculously complicated tax codes allows for these issues. I don’t blame companies for working their hardest to avoid taxes when it’s /so easy/ to legally save billions.
How is it immoral?
If you consider the US tax code to be ‘ridiculously complicated’… oh boy. @_@
The US tax code is one of the simplest out there. And the reason these tax loopholes exist is because of this simplicity: you can’t be taxed for money that you don’t earn under US jurisdiction.
Fixing this would require the law to either assign an ‘intent’ to money, or for the law to declare it has jurisdiction over money earned outside the US. Neither would sit well… well, anywhere.
Is it really? Lol. All I’ve ever read/heard states the US tax code is pretty messy and horrible. If its simplistic versus other countries… Thats kinda scary.
That reminds me of some old story. At a wedding in a poor town every guest was asked to bring some wine which would be poured in a big barrel. As the guests arrived, the barrel was eventually filled. When it was time for the big dinner, the host opened the barrel and all that everyone got was a glass of water…
It’s not illegal to avoid taxes, but it’s still very immoral because basically you assume everyone else is going to pay their share and therefore you can get away with your greed. When too many people/companies do that, you end up with nothing.
And please, don’t even start about “taxes = theft”. Here in Belgium, for a single person, tax freedom day is somewhere in October(!), thát is theft. However, it’s still no excuse to avoid paying your share by putting the burden on everyone else. The only path forward is having tax law changed and increasing government efficiency.
oh, trust me, I do not believe taxes = theft. I’m just on the fence over it being immoral when its just abusing the system legally.
BTW, I love your story. Never heard it and it explains it so succinctly.
Well there you said it: it’s legal, but still abuse, so that qualifies as immoral in my book
Is it imoral to want to keep what you have worked for?
It is immoral to profit from all the benefits a society offers while refusing to contribute back your part to keep that society running.
The only reason you have something to keep in the first place is that you had an education, infrastructure, justice and protection – all provided by the society you live in. It may not be perfect, but I guess you can always move to a free country such as Somalia.
Society != Government
It is when other people are forced to work twice as hard or contribute twice as much to compensate for Apple’s greed.
Taxes are not an opt-in luxury.
helf,
“How is it immoral?”
To be honest, it would not be immoral if was got at through a democratic process and we genuinely believed that these large corporations should not pay taxes like others do. As much as corporate apologists like to treat corporations as morally innocent & non-responsible entities, that notion breaks down rather quickly considering how much they control the government these days.
Avoiding taxes is like avoiding a thief. Neither is wrong, though in some cases either could be stupid (which is why I pay taxes: I don’t want to die. Seriously. You know America is screwed up.).
Apple found a way to do this. Good for them. They have avoided getting stolen from. Now, you go find a way to do this, and don’t wish your misery on others who have less of it.
Fine, don’t pay tax. While you’re at it. Don’t use the public roads. Blindfold yourself at night whenever you’re near a street lamp. Tell the police to not help you if you’re robbed. Dial 911 if you’re injured? Forget that. You’ll also need to stockpile on candles because electric power lines are government property.
It costs money to keep a country afloat. If you live in a country it’s your responsibility to contribute your part to make it so.
Did you just list off things that could be paid for outside of a system that forces you to pay for it at gunpoint? Hrm?
You wrongfully assume you have to threaten to kill everybody to get that paid for (taxation). I think it’s better to ask nicely and allow choices.
Name me the exact phrase I used where I threatened to kill for tax. Otherwise, stop using straw man arguments.
Have you seen what happens to someone that tries to not pay taxes?
People with guns come and take them away, and if they resist, they’ll kill them.
This is fact. This is not a straw man. The US will even still try to collect income tax from you for years after you leave the country. And it’s all enforce by people with guns.
Let me get this straight, in the first two posts, we were arguing about the importance of paying taxes.
In the third post you wrongly accused me of threatening people to pay taxes.
In the fourth post I basically said “Citation Needed”, asking for where I threatened people.
Now, not only have you failed to provide the necessary proof that I threatened people, you make a baseless statement that tax dodgers are killed at gun point and try to pass this off as fact.
Please, stop posting now. Learn more about the world – and about debating – and come back once you’re done.
Lee, you are being toyed with. It’s trollish, but your reading comprehension needs work.
Jesuspower is not saying you personally threaten, but that society in general does. This is a form of speech in English, for example when someone says “you just have to laugh sometime”, that saying isn’t directed at a particular person but at a generic humanity. So he/she is saying that society has chosen a tax system that threatens anyone who doesn’t comply*. I think you have to agree that this is a fact, no matter what your opinion on the morality of taxation is.
*Obviously this same society lets high-powered politicians and bureaucrats get away with complete non-compliance to the very rules they vote into place. but we all know that.
Yeah, I suspected he was being trollish, but he should at least learn how to make convincing and good arguments.
Tax dodging may have serious consequences like seizure of property or imprisonment, but him trying to pass off blatant exaggeration as fact is just mind-numbingly silly. (And yes I do agree tax money hasn’t been used wisely but I’ve made a statement about that already)
And, if he’s going to be a troll, he should at least be a good one.
Welcome to the real world…
In the U.S., ALL of that comes from local taxes.
Federal taxes are used for war, largely poorly designed or intended ‘studies’, placating to lobbyists, oversight departments that perform poorly, interstate highways, the IRS itself, CIA, FBI, DEA, ATF, NSA, DOE, and much much more.
Taxes for medicare & social security are collected “separate” from income taxes, so I didn’t include those.
Most of what the federal government does should be left at the federal level, but everything they do costs far far too much. And the DEA should simply be abandoned, the DOE should be destroy and made into a committee of education leaders from each state / represented territory.
The IRS should be destroyed by following the constitution and having the federal government collect its funds from the states, and have those states determine how to get that money from its people.
That is how it is suppose to work. Otherwise, work out a system for a federal sales tax, and abolish the IRS. Problem is, while a sales tax is more efficient (see Texas) and is entirely fair (critical items, like food and water, are not taxed) it is also too difficult to use as a source of corruption by politicians. You can’t easily create tax credits to hide giveaways so people buy something from the lobbyist that gave you the most money or the best gifts…
The lower degree of corruption in a sales-tax system is precisely why the government will never do it.
You would still tax business profits & corporate profits – at much lower levels, with very few avenues of escape.
We should be trying to put CPAs and tax companies out of business…(sorry, but that’s progress…)
–The loon
I don’t know about your area, but here, the public roads are all f***ed. They’re not taken care of properly. They’re pothole-ridden. The potholes get “patched”, then the patches break down and then need to be patched, then the patches over patches need to be patched. It’s a never-ending cycle until the whole damn road is just something you don’t want to drive on. The roads get so bad and stay that way for extended periods of time, it’s not even funny. The entire damn road needs redone, and just when you might think they’re getting serious about doing the right thing, they do little stretches here and there, leaving shittiness in between. It’s been horrible for years before they finally got off their asses and started spending money on “real” road repairs, and there are are still dozens of bad roads.
The government is no good at spending our tax dollars where it should be. Instead, they just fork over enormous amounts of money in their ridiculous “war on drugs” and “war on terrorism” and other stupid shit like recycling the most pointless things (paper, plastic, etc.). And before you bitch, “but recycling is good!” I do recycle things that are worthwhile: metals, especially aluminum (which I get a lot of in the form of cans). Go to YouTube and look up “penn and teller bullshit recycling” and watch all three parts of the 30-minute episode before you go on your “going green” bullshit.
But as someone pointed out above, the roads are taken care of by the local governments, not the federal. So basically, local or federal, it doesn’t matter which part of the government it is… they all burn tax money on ridiculous shit. City, state, federal–you name it.
Edited 2012-04-30 00:57 UTC
Hehe… of course jesuspower’s post would get moderated down by all the self-righteous believers in authority.
While I believe that some taxation is necessary (although not on income), it is obvious that what we have now has been blown completely out of proportion. The sum total of government services that we actually rely on in daily life almost all occur in local and state government, which taxes us at a minor percentage compared to the greedy beast that is our central Federal government. And in fact, even local government is at least 90% waste and unneeded “services”.
No my friends, your self-righteously-paid taxes mostly go towards supporting a corrupt monetary system, foreign wars, failed banks and investment companies, and paying for a completely counterproductive bureaucracy that eventually wants to dictate everything in your life, from how much water your toilet holds to what kind of food you should be allowed to consume (Google “raw milk raids’).
Time to stop defending what is clearly an out-of-control bully. I cheer every time I hear about some company or individual who has managed to avoid supporting the beast.
Finally, a good argument. If you checked the other portion of this thread you’ll know why I am so relieved by this post.
Yes, I agree that the US government has been diverting tax money to the wrong areas, but that means it is up to the US citizens to change the government’s ways, not avoid taxes.
Starving a bully government may mean there would be less money for pointless wars, but it would also mean less money for the other important areas that are under-funded, like relieving foreign oil dependence, or improving the health-care so that poor people can afford them, or improving the education system so that people like Jesuspower would actually make good arguments.
Change the government, that’s the answer.
Edited 2012-04-29 15:09 UTC
You’re young, I can see that. Your answer is for the government to start funding MORE other things! And somehow trust that this same government will voluntarily stop spending the money where we don’t want. Look at history and tell me where that has ever worked. The European Union, which we Americans have been told for decades is the gold standard of enlightened socialism, is in a shambles, and will likely collapse within our lifetimes.
Right now, I can guarantee you that there are literally thousands of brilliant ideas about how to solve our energy/food/health problems that are actively being squashed by our government. Individuals solve problems. Governments create them.
The simple fact is, the more power you give government, the more it and the citizens will be corrupted. Government has absolutely no incentive to do things efficiently or to actually solve the problems that it is expected to solve. Think about that for an hour. The reality in history is that there is only one type of problem that can be solved by government: how to restrict one person from violating another (essentially, punishing theft and violence, and enforcing contracts). Note that this is one of the few problems that government is not rewarded for prolonging (ideally). Everything else works against that. The real problems of the world have been solved by individuals and groups of people who have an incentive to find a better way to do things. Computer geeks should be among the first to achieve this insight.
Limit the government. That’s the only answer.
When the people fear their government, there is tyranny; when the government fears the people, there is liberty.
–Thomas Jefferson
If you look at NASA, it’s achievements and how it has inspired a whole generation of thinkers it is hard to agree with your point. As an passionate engineering student I can attest to that.
Maybe it’s because I’m young; maybe it’s because I haven’t experienced the world in its absolute cruelty – but I have absolute belief that with the right people in the right jobs the government can be the best thing the world can offer.
All those efforts in improving green energy are being snuffed out by big oil companies, and it is very frustrating – trust me, I know. This is happening because the government let them but we know that all this is driven greed and the lack of principles in improving mankind. If we had the right people in the right jobs – if we had people who would stand by their principles – this wouldn’t happen.
There are so many great ideas out in the world, but we can’t achieve them alone as individuals. The government is our best bet because all corporations think of is making money. I feel like bursting into rage every time I hear that phrase “But will it sell?”. If we had the right government, the question the people would ask instead is “But will it improve our lives?”. We pay our taxes in hope that in hope the country would improve, and this is what should happen.
The government can be the worst thing or the best thing to happen to mankind, depending on how it’s run. If we could change the system, make the government see that improving the world as a whole is beneficial, the latter would happen.
Maybe I’m just a naive padawan; maybe I’m just too optimistic – but without hope for the people in the world, what’s the point?
Yes, you are naive. At least a corporation’s goals are clear and understandable, and it does not achieve them by force (except when it co-opts the government, as our corporations have). Government, no matter how idealistic its origins, will always be co-opted by those with less morals and greater ability to lie. It is a given, so it is in our interest to keep government as small and simple as possible.
I hate to burst your bubble, but even NASA is not a perfect example of human achievement. It is a giant, bloated, archaic organization that has finally–just this decade–given up trying to build the spaceships of the 1970s. I do think that there are times when “anomalies” happen and government produces something positive, but they are vastly overshadowed by the negatives. Honestly, how much money has our government spent on getting into space, and how much of that was taken from private individuals who could have banded together and done the same without any coercion of the citizen via taxes? And they probably could have done it far more cheaply.
Americans have largely been sold a carefully-wrapped story about our government and its history. Start digging in for the details in any area–The Civil War, John Dewey and our public schools, the creation of the Federal Reserve, the Great Depression, you name it–and you start finding lots of dark, depressing undercurrents.
Americans as a people consume history and stories of our leaders the way they consume fast food: keep it simple, never question the source, or the complex machinery that goes into delivering that simple few bites, never stop and think about what it is really doing to them.
Indeed. The federal government is simply too distant from the common man to keep in check. It should be reduced to a bare minimum and all power should go to the individual states.
Things like copyright laws and healthcare do not belong to a federal government. Let each state decide for itself. State governments are closer to home and their laws have a much smaller impact radius. It’s a lot harder to corrupt 50 different governments than it is to corrupt 1 government. There will always be a few states that do the right thing and when citizens in other states realise that their neighbours have something better, they’ll want something similar for themselves.
Diversity is a way of protection.
Edited 2012-04-30 04:15 UTC
cfgr,
“Indeed. The federal government is simply too distant from the common man to keep in check. It should be reduced to a bare minimum and all power should go to the individual states.”
Yep, if states/counties took over the roles of federal government, then they would almost certainly have to be more competitive in the long term. The federal government has become complacent and self-entitled without regard to doing what’s best for the people.
Not to paint it as all roses, but at least our tax dollars would be managed by local officials with a bigger stake in the success of local communities.
Amen!
First and foremost all big corporations do this, it’s common practice. However a title like “Dell sidesteps billions in taxes” would go unnoticed by the majority of the media nowadays.
So I think it’s a good thing that this article was written even though it unfairly targets Apple only. It will make the public aware of the issue and maybe something good will come of it.
Apple was working to regulate the treatment of Foxconn employees way earlier before any of the media got ahold of it, however the exposure sure did put pressure on them to do more. I’d like to think that this might have a overall positive effect on other manufacturing companies as well.
As for the tax issue, while it’s morally wrong what these companies are doing to avoid taxes, I think at least 90% of the population would act in the similar way if it was up to them.
Edited 2012-04-29 14:02 UTC
The Occupy Wall Street publicity makes it easy to place blame on corporations for creatively skirting tax law.
Do you not try to deduct everything possible from your own personal income taxes? Is that, too, immoral? Perhaps you should feel privileged to pay more than is required of you?
While I would be overjoyed if Apple — and nearly every other monolithic organization, since most of them do jump through hoops to lower their taxes — paid the government extra (without raising prices), and I was, as a result, given a tax break, I cannot fault them for choosing not to do so.
Well, I don’t. But considering that taxes fund most of my professional life, I may have an unusual point of view on those matters.
Edited 2012-04-29 17:50 UTC
Incorporate in NV where there are no corporate Taxes.
Take advantage of Tax holidays from the Eire Government (like Dell, Adobe etc)
so what is new in this post?
Oh yeah, it mentions Apple.
Film at 11, Scarface
Everything is owned by people. Corporations may own other corporations but there is always a person at the end of the chain. If these Apple shareholders live in California, like many of them do, California still gets a great big tax bite when they sell their Apple stock.
Corporate profits are taxed twice. Once at the corporate level and a second time at the shareholder level. If Apple avoids the taxes at the corporate level it makes the share price go up, which then causes the individuals to pay more in taxes.
The more relevant question is, if Apple makes an iPhone in China and then sells it to a Chinese citizen, why does the state of California try to tax that transaction?
Edited 2012-04-29 14:42 UTC
The more relevant question is, if Apple makes an iPhone in China and then sells it to a Chinese citizen, why does the state of California try to tax that transaction?
They might not BUT Uncle Sam taxes US Companies on their WORLDWIDE Earnings. There are agreements in place between the US and other governments but there is legislation in place whereby the US Gov can deem the taxes paid by a company in one jurisdiction ‘too little’ and levy what they thinks as appropriate taxes. This clause is not used very often.
The US Gov is almost unique in deeming that ALL income of people and companies from wherever in the world it eminates is liable to US Taxes.
California has a unitary corporate income tax. That means they tax all corporate transactions no matter where in the world they occur. For example the profit on an iPhone made in China that is sold to a Chinese citizen and that phone has never been near California.
A tax like that is a good way to drive multinational corporate headquarters out of your state and they appear to be succeeding. Nevada doesn’t have a silly tax like that.
I believe California is the only state with unitary taxation.
Wouldn’t it be more unusual not to minimize your taxes??
Hell, I do try but it’s a lot harder for me with limited resources!
PS ALL big companies use the same contruction, for instance
http://www.theregister.co.uk/2010/10/22/google_double_irish_tax_loo…
Edited 2012-04-29 15:40 UTC
In cases such as these secondary taxing ought to kick in.
This is where the local shareholders is taxed on dividends.
But wait Apple rarely pay dividends. Recently dividends payout where very rare.
All the money sits in accounts somewhere.
Maybe there is something wrong with the profit reserves system then. Maybe if a rich company withhold massive amounts of dividends(billions of dollars) to long a reserve taxation ought to kick in.
Can I as a person earn income and put it in a profit reserve. Never.
The best part was the morality question. Companies (it’s managers) do not have any morals. It is clear to me that management thinks they deserve 100x or more the average workers pay. They think they deserve a bonus to loose money. Why would they care about how taxes are avoided. There is a fine line between legal evasion and avoidance. An aggressive company could keep the IRS away for 50 years. In the mean time they could pocket the profits until it was time to settle.
I work and have worked for decades. I have paid my fair share of taxes both local and Federal taxes. I have known about these cheats to the system for a long time. But it sure does burn me up that some companies like GE get by with no taxes.
Even a flat tax wouldn’t fix it. The other countries would side step it like Luxembourg.
Even countries like Singapore who harbor drug money have rules to avoid disclosure of monies.
Considering the US makes nuclear weapons while Ireland and Luxembourg do not I think it’s quite moral to have those countries get the taxes and not the US.
Taxes aren’t the problem. Its the fact that we aren’t charging Apple a tariff on every device they bring in the country. Charge a 20% tariff for imports and you will see jobs and manufacturing suddenly start springing up all over the place. We allow these companies to rip us off by moving money and jobs overseas. If they want access to the US market (arguably the richest market in the world) make them pay for it.
Let’s face it, if someone has enough money she or he or the company will try hard to avoid it.
Is this moral or immoral ? No.
As long as countries attract companies with low taxes to get at least _some_ money, we will see headquarters move around the world.
As long a countries offer low income taxes you will see rich people change the place they live at.
ABBA moved away from Sweden, Micheal Schumacher moved to Switzerland. And so on…
DeepThought,
“Let’s face it, if someone has enough money she or he or the company will try hard to avoid it. Is this moral or immoral ? No.”
Except if an average joe were to do the same thing, the IRS will doc his income and eventually reposes his possessions until they get paid.
Edited 2012-04-30 05:51 UTC
Stop call this osnews.com, instead call it “apple haters news.com”,. i have been a big fan of this website when its main goal was to give news about OSes, not about how evil is Apple, and Google so clean.
It’s perfectly ok to discuss about Apple, but on osnews, I would expect more about iOS or Mac OS, not so much about its business or hardware, at least on the so called osnews.com.
Edited 2012-04-30 06:55 UTC
This is no different than a regular person buying something over the internet. How much taxes is left unaccounted for by people who buy stuff over the internet? Most states in the US have a ‘use tax’ for all out of state purchases (double taxation anyone? — Even if you paid taxes in another state, the state you live in wants your money too). Few people declare their amazon, ebay, newegg, etc, purchases, is that also immoral?
To me it’s immoral to deprive a person, or company, of that which they earn. Taxes are immoral, earning a profit is not. Entitlement sense is immoral.
Apple is not “avoiding taxes”, it’s keeping that which it rightfully and lawfully earned.
Individuals do the exact same thing. You know those people who live in one state while working in another with higher income taxes? Is it immoral to live in Virginia and work in Maryland, while paying Virginia’s 5% income tax with Maryland’s 7.5% rate (total state+county+locality)? Is it immoral to live in Washington and work in Oregon? Is it immoral to live in Washington but buy clothing in Oregon where there is no sales tax?
Philosophical concepts like morality are a double-edged sword, I wouldn’t attempt to win an argument using them.
So, in your opinion, the most moral option is to have not taxes. But no taxes means no public services, and thus no income redistribution. It means that a child born out of a rich family is implicitly considered superior to a child born out of a poorer family without having done anything with its life yet, and that the latter deserves to die from hunger if it can save the former a few dollars from the inherited millions that he did nothing to gain.
Of course, you can argue that inheritance is immoral. But that would be against your dogma that people shall never, ever be deprived from doing whatever their want with the cash they earn.
So, which option is most moral ? State-enforced income redistribution or wealth-based eugenics ? Equity or freedom ? It is not so easy to tell, otherwise there wouldn’t have been left-wing and right-wing parties ever since democracy has existed.
Edited 2012-04-30 17:47 UTC
Hey, I hate that the big guys get away with tax avoidance, but it’s baked into the system for them to try.
The company directors have a “fiduciary duty” to the shareholders to make the most money they can. In other words, the company directors would be legally liable if they did not try to maximise shareholder profits.
Of course, since company directors also likely own a slice of the pie, they have *no* incentive to not avoid taxes.
Don’t like it? Go to congress, and change the laws.
Boy, I can’t wait to see America go back its pure, Darwinist roots.
Don’t have a job? Your fault. Doesn’t matter if nobody’s hiring, you’re just not looking hard enough.
No money? Sorry, can’t help you. No education? You haven’t pulled yourself up by your bootstraps, so you don’t deserve it. No food? Go eat some dirt. It’ll fill your stomach for a while.
In your ideal world, I would be dead fifty times over. So would some of my closest friends. Go on, keep thinking you don’t owe anyone anything; the truth is, there isn’t a single one of us who doesn’t owe somebody something. “Self-made man” is the biggest oxymoron in the world. There are homeless shelters in this country that are full of “self-made men.”
Sure, life’s unfair. That doesn’t matter; the whole point of human civilization, or what passes for civilization at this point, is to make it less unfair. To minimize the chances of the individual – or the species – getting screwed over by circumstances outside their control.
And yes, I realize that we’ve failed at that. Repeatedly. We have to keep trying. What’s the point otherwise? We might as well go back to living in caves, grunting at each other, and praying that the God of Cholera doesn’t wipe us all out.