The Biggest Takeaways From Apple's Tax Grilling

Earlier today, Apple (NASDAQ: AAPL  ) management testified in front of a Senate subcommittee, getting grilled about its tax strategy. The Mac maker's tax strategy has been under fire ever since The New York Times ran an expose about a year ago, "How Apple Sidesteps Billions in Taxes." 

That brought attention from lawmakers, even though the issue at hand is really how broken the U.S. corporate tax system is. Apple just happens to be perhaps the highest-profile example of tax minimization. Here are the biggest takeaways from the hearing and Apple's testimonies, which were delivered by CEO Tim Cook, CFO Peter Oppenheimer, and head of tax operations Philip Bullock.

Everyone's doing it
Strangely, there's a double standard when it comes to corporate income tax and individual income tax. It's entirely acceptable for individuals to seek tax minimization. Every tax preparing service promises to get you the "largest refund ever," which indubitably translates into paying the least amount legally possible.

However, when corporations do this for the benefit of their shareholders, they get vilified. It's also worth noting that the majority of Apple's shareholders are American individuals, whether they own shares individually or through a mutual fund or pension fund, so Apple's broad domestic investor base benefits from tax minimization.

Cook pointed out that Apple is the largest corporate income tax payer in the U.S., expecting to pay $7 billion this fiscal year. The flip side of this is that Apple may also be the largest corporate tax avoider.

It's all legal
Cook reiterated that Apple pays "every single dollar" that it legally owes in taxes, and that Apple's fiscal 2012 total U.S. federal cash effective tax rate was roughly 30.5%. That figure is based on U.S. pre-tax earnings, and doesn't include overseas earnings.

Even as lawmakers gave Apple a hard time, none disputed that the company's practices were fully compliant with current tax laws. There's much debate about whether Apple is violating the spirit of the law, if not the letter of the law.

Kiss me, I'm an Apple Irish subsidiary
At the heart of the scrutiny are three of Apple's Irish subsidiaries: Apple Online International, Apple Sales International, and Apple Operations Europe, or AOI, ASI, and AOE, respectively. AOI is a holding company set up to manage Apple's foreign cash balance, which is now over $100 billion. Subsidiaries further down the food chain distribute income earned around the world to AOI. These subsidiaries pay applicable local taxes in the regions where they operate before sending money to AOI.

None of these subsidiaries have any country of tax residency, in part due to the way that Irish laws are structured. Apple does pay U.S. taxes domestically on the interest income earned from this foreign cash, but that's a relatively small amount relative to the amount of foreign earnings that are taxed at extremely low rates.

These subsidiaries were set up in 1980, and at the time Ireland had offered some generous tax incentives to encourage tech companies like Apple to set up shop. This was before any of Apple's biggest breakthrough products, mind you, including the first Mac. The negotiated maximum tax rate that Apple pays in Ireland is around 2%.

There is a cost-sharing agreement that Apple has with two of its Irish subsidiaries, ASI and AOE, where the entities combine resources and share risk to invest in research and development, of which 95% takes place in the U.S. All parties are then able to reap the rewards from this innovation. This has been mischaracterized as a way for Apple to "shift" income to Ireland. Apple makes it clear that it doesn't move its IP into offshore tax havens and then use the IP to sell products back into the U.S. All products sold in the U.S. are subject to domestic corporate income taxes.

It's the overseas product sales that primarily get favorable tax treatment, although this is now the bulk of Apple's business; 66% of revenue last quarter was international.

Out of sight, out of mind
The real problem is the U.S. corporate tax system, which is in desperate need of reform in order to get with the times. At times, lawmakers lost sight of this and instead focused on chastising Apple about its legal tax practices, many of which are employed by other American multinational corporations.

Apple acknowledged that the current 35% tax that it would need to pay in order to repatriate cash provides a significant disincentive to do so, particularly when the cost of debt is so low. On average, Apple is paying less than 2% (which is tax deductible) for the $17 billion it just borrowed, far less than the 35% that comes off the top for bringing dollars home.

One senator pointed out that Apple's overall effective tax rate, after including its minimization strategies, is very similar to Samsung's. The South Korean conglomerate is easily Apple's biggest competitor right now, and the American company has to jump through all sorts of loops just to pay a similar rate to foreign competitors. However, there's still one big difference: Samsung is free to bring money home to South Korea if it wants to use those funds to invest in infrastructure, pay employees, or distribute dividends, among other uses. Apple is afforded no such luxury under current U.S. tax law.

Taking one for the team
A repatriation holiday isn't a viable long-term solution, either. Cook maintains that such rare holidays aren't predictable, something businesses prefer. It also perpetuates the idea of hoarding cash overseas in anticipation of the next holiday, since the precedent has been set. A rate in the "single-digits" would encourage free movement of capital, in Cook's view.

Even though comprehensive corporate tax reform would very well likely result in Apple paying more taxes, the Mac maker is all for it if the system becomes modernized and simpler.

The controversy over Apple's tax strategy is not the only sources of tension between the top performing digital power players. Much of our  technological lives are shaped by the fierce competition between a small handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.


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  • Report this Comment On May 21, 2013, at 4:25 PM, sgraham005 wrote:

    And to be clear, that’s not illegal. The Senate investigation into Apple’s practices found no evidence that the company did anything but comply with tax law. Irish subsidiaries? They’re authorized by U.S. tax law. They comply with all U.S. tax regulations. And they’re audited by the IRS. Which says far more about our flawed corporate tax system than Apple’s alleged abuse of it. Given the opportunity to shelter overseas profits from U.S. taxes, what rational company wouldn’t take it?

  • Report this Comment On May 21, 2013, at 4:56 PM, mdk0611 wrote:

    Watched most of it. Clearly Levin wants to tax on a worldwide basis, without even a guarantee that US rates would be lowered. It's predominately a revenue grab on his part. He was well briefed, but studiously avoided the question be raised as to what would happen to US competitiveness on world markets if he achieves his legislative goal. The one problem I had was his continuous insinuation that the 2008 and 2009 agreements with the Irish subs were something new and evil. They were merely extending agreements that had existed since 1980.

    The most well versed member of the other side was Rob Portman. He pointed out that Apple's main competitor, South Korea's Samsung, pays essentially the same tax rate on worldwide earnings yet can repatriate foreign profits tax free. Portman was clearly advocating for a significant reform of corporate taxes that would lower rates, reduce tax subsidies and establish a territorial system for foreign subsidiaries.

    And confirming the prior post. The IRS rep following the Apple execs stated Apple's transfer pricing system and foreign activities are under continuous audit.

  • Report this Comment On May 21, 2013, at 5:13 PM, speechisntfree wrote:

    I hope that waste of oxygen Levin gets his legislation passed..... and then I hope that every American company who has been complying with the current tax laws..... like Apple..... moves out of this country so the government will get either nothing or less then they get now.....

    Our government is broken and corrupt, period.

  • Report this Comment On May 21, 2013, at 5:21 PM, Snertie wrote:

    That was embarrassing to watch; mostly a play for the "low information" vote. Sad.

    The problem isn't Apple or Cook. It's Congress. I really don't understand that rationality that can fault Apple or any other US corporation for following the law.

    If I was Tim Cook, I would have asked Levin if he takes full advantage of the tax law as it apples to him, or if he simply checks that "Let the IRS calculate your tax" box.

  • Report this Comment On May 21, 2013, at 5:27 PM, durango58 wrote:

    The tax code needs to be changed. Hundreds of multi-nationals are holding funds elsewhere. I think they would gladly pay a reasonable amount to repatriate those funds.

  • Report this Comment On May 21, 2013, at 5:28 PM, PALH wrote:

    ``Strangely, there's a double standard when it comes to corporate income tax and individual income tax. It's entirely acceptable for individuals to seek tax minimization. Every tax preparing service promises to get you the "largest refund ever," which indubitably translates into paying the least amount legally possible.''

    Oh, please. Tell us more about how our poor corporations are just doing the right thing when they outsource jobs and offshore profits. Hey, it's legal! So it's OK. I own Apple stock and I would happily take a hit on the share and dividend if it and every other American corporation funneling money away through loopholes at the expense of the U.S. economy actually paid their fair share.

  • Report this Comment On May 21, 2013, at 5:29 PM, graphiko wrote:

    *Sigh. Our tax dollars at work. Way to go Congress. Now here's a question: how many of our millionaire congressman are shoveling "hard-earned bucks" into overseas tax havens? Do we bet to grill them about it?

  • Report this Comment On May 21, 2013, at 5:32 PM, ktgunn wrote:

    Apple is following, no make that, taking advantage of, the law, but Apple and other corporations through their campaign contributions and lobbying have written the laws. The argument that Apple is simply following the laws is using congress as a convenient fall guy. Reminds me of Richard Scrushy and his CFO's. And comparing individuals' attempt to minimize taxes, maybe a few hundred or a thousand bucks here or there, to corporations paying nothing or next to nothing on billions of profits doesn't wash. Congress isn't the problem; the laws that allow congress to be bought is the problem.

  • Report this Comment On May 21, 2013, at 5:34 PM, sklogw wrote:

    Does this mean multinational corporations will stop moaning about how the US education system does not produce qualified employees -- and at least admit that it apparently produces pretty good tax lawyers?

  • Report this Comment On May 21, 2013, at 5:37 PM, dcc6 wrote:

    of course when there are TV cameras, the politicians will posture, but the process is important in getting the extent of the problem understood and public will developed--one hopes for comprehensive reform, which requires much more than just lowering tax rates (though that should be involved). It should be coordinated with Europe, whose finance ministers area also upset with same problem. Just lowering tax rate to, say 5-10% wouldn't prevent company from going further afield to save--e.g., "95% of value of our product is from our subsidiary in the Seychelles (which has no employees, is run from California, and pays 0.!% of profits to government of the Seychelles). This has added benefit of giving execs a tax deductible reason for visiting the Seychelles.

  • Report this Comment On May 21, 2013, at 5:39 PM, driller101 wrote:

    Rather than investigate businesses, Congress needs to look in the mirror. They made the rules, they can't complain if companies follow them to their advantage.

    Of course we should reform the tax code. We should also reform campaign and lobbying rules, because these loopholes in the tax code don't get there without the beneficiary's input.

  • Report this Comment On May 21, 2013, at 5:40 PM, dj1962 wrote:

    I would be p*ssed if any company in which I own stock didn't try to pay as little in taxes that it legally could. Of course, this hearing is about milking more money out of the big bad corporations. If the spendthrift politicians would make it worth bringing the money home they would. Why would the international corporations bring the money home when they would be penalized. The world is a competitive place. If a company makes itself uncompetitive by "economic patriotism" then it will lose to its competitors.

  • Report this Comment On May 21, 2013, at 6:35 PM, Grahdodd wrote:

    Stealing Bases is illegal in Little League.

    Just the concept of "stealing" a base seems unethical.

    Jacoby Ellsbury of the Red Sox has stolen 13 Bases this season. He has conspired with his team to execute this unethical, though fully legal strategy to give the Red Sox a competitive advantage.

    The Baseball version of Apple. Congressional investigation?

  • Report this Comment On May 21, 2013, at 6:45 PM, TMillerFin wrote:

    Judge LearnedHand

    Look it up

    Said it is the right of all American taxpayers to structure their affairs in order to owe the least amount of tax. That is ALL American taxpayers, not just the vulnerable who already structure their affairs to pay no tax at all.

    As an Apple stockholder, I would be disappointed in management if they did not maximize the value of my shares.

    Maybe it would be better to invest in Samsung and just let the Chinese win.

  • Report this Comment On May 21, 2013, at 7:10 PM, dfavela wrote:

    Great piece. Unfortunate that the U.S. government is bad enough to make me root for Apple.

  • Report this Comment On May 21, 2013, at 8:26 PM, skypilot2005 wrote:

    "The real problem is the U.S. corporate tax system, which is in desperate need of reform in order to get with the times. At times, lawmakers lost sight of this and instead focused on chastising Apple about its legal tax practices, many of which are employed by other American multinational corporations."

    And Senators like ole' Carl Levin who is more interested in politics than fairness. It appears he doesn't have an once of business sense.

  • Report this Comment On May 21, 2013, at 8:40 PM, Ostrowsr wrote:

    Biggest take away. Our government is bought and sold by big money. And the tax code is deliberately made complex to hide the loopholes. Only attorneys and accountants can begin to unwind the maze of laws meant to confuse the general public. Watch your lawmakers closely and find out which ones:

    1. Refuse to vote for a grand bargain on the deficit made up of revenue and program cuts.

    2. Continue to allow UZZIES in the hands of children and the mentally ill.

    3. Refuse to fix and simplify the tax code.

    Then vote them out in 2014.

  • Report this Comment On May 21, 2013, at 8:52 PM, TaxJunky wrote:

    You write: "All products sold in the U.S. are subject to domestic corporate income taxes," I think you are being imprecise, if not deliberately deceptive. Most Apple pruducts purchased by US consumers are purchased on line, and the sales location of that purchase is usually China. The products are drop shipped from FoxConn to the US consumer. Apple never takes possession, in the US and accordingly the profit to Apple is recognized in China, not in the US, so 90% of the products sold into the US are not subject to domestic corporate income taxes. Next time you buy an Apple product on line, watch the FedEx shipping trail and you will see the process.

  • Report this Comment On May 21, 2013, at 8:53 PM, Samskiman wrote:

    Amazing, there are actually people walking among us that believe companies should ever pay more than the absolute minimum tax they legally owe.

    Cook's responsibility is to run Apple in the best interest of the shareholder, period. If any company doing business in the US isn't paying the minimum amounts they legally can, they need a change of management.

  • Report this Comment On May 21, 2013, at 9:43 PM, Jurobi wrote:

    If I had been Cook, I would have asked the Senators if they voted for the recent amendment to the Stock Act, which gutted that act's accountability provisions. The Stock act was originally supposed to prevent insider trading by elected and appointed officials and their aids. Now it's toothless.

  • Report this Comment On May 21, 2013, at 9:49 PM, Estrogen wrote:

    thanks Evan and fellow Fools for keeping us well informed. I saw a 60 minutes piece a while back where they interviewed the Cisco CEO Chambers. He covered a lot of the same issues. They indicated at some point during the Bush administration, they did allow corporations to bring back profits at a 1 time lower tax rate. Their thinking was companies would hire with the extra capital and stimulate the economy. What happened was companies used the capital for increased dividends and buy backs. Shareholders (owners) were rewarded and and I'm sure stimulated the economy accordingly by spending some of their dividends or stock appreciation via the buybacks.

    It amazes me that it took so long for the watered down stock act to even be considered and then only through embarrassment via the Fool, 60 minutes, and others, but these same folks on the Hill are so shortsighted when it comes to taking care of the people they were hired to serve.

    Somewhere along the way, city, state, and local governments went from organizations that serve the people to organizations that the people serve.

    Disgusting.

  • Report this Comment On May 21, 2013, at 10:15 PM, devoish wrote:

    It is not legal to develop products in the United States and then pretend they were developed abroad just to avoid paying taxes.

    It may be difficult to prosecute, Congress may be unwilling to prosecute, but it is not a legal practice.

    It is also not legal to fabricate a loan to yourself from an off shore company and use paying your loan to yourself back to hide US profits and duck your taxes.

    That is illegal laundering of money.

    Rewarding Apples illegal behaviour by allowing them to repatriate the money at a lower tax rate than they are hiding it from is a bad idea and should not be allowed. No amnesty for tax cheats.

    Raise the rate beginning two years out and that money will be here in one year and 364 days.

    Best wishes,

    Steven

  • Report this Comment On May 21, 2013, at 10:24 PM, devoish wrote:

    If you are really interested in how taxes are dodged, what laws are being broken - including by Apple - try this one hour video. You can learn more in this one hour video than you can in the previous 18 paragraphs.

    http://caps.fool.com/Blogs/the-tax-free-tour/810953

    Best wishes,

    Steven

  • Report this Comment On May 21, 2013, at 10:27 PM, rd80 wrote:

    "Cook pointed out that Apple is the largest corporate income tax payer in the U.S."

    Can we get a fact check on this? If I'm not mistaken, ExxonMobil is by far the nation's largest corporate tax payer.

    Apple projects $7 billion this fiscal year, XOM paid over $6 billion just last quarter.

    And, unless Apple's breaking the law, corporate management should be structuring the business to minimize taxes. If congress doesn't think that's right, change the law rather than whine about a company doing what the tax law encourages it to do.

  • Report this Comment On May 21, 2013, at 10:55 PM, KongPL wrote:

    US tax system is a relic of the 19th century, patched up to cope with increasing globalisation. A significant overhaul is needed. It is not that Apple does not pay tax for its overseas earnings - it just does not pay to the US government what has been earned overseas. They avoid being taxed twice. And why should they?

    Create a flat tax rate. Introduce a fair sales tax/VAT. Get rid of all loopholes and tax exemptions. Sack 90% of IRS staff, because they will not be needed anymore. Look at the Hong Kong system - filing a tax return takes literally 15 minutes at most for an individual, and is equally convenient for a corporation.

  • Report this Comment On May 21, 2013, at 11:24 PM, bigkansasfool wrote:

    "Strangely, there's a double standard when it comes to corporate income tax and individual income tax. "

    If you're not a corporation (even though corporations are people to my friend), then as an actual person only $97,600 of the income earned overseas is excluded from your US taxes. All money earned overseas is subject to US federal taxes over the foreign earned income exclusion. Of course corporations get preferential treatment over actual people so they're not taxed at all unless they repatriate the money, and they don't do that unless it's a tax holiday because not it's an established precedent of having tax holidays for corporations.

  • Report this Comment On May 22, 2013, at 12:44 AM, certifiedbodyman wrote:

    Well...I guess since these DC clowns can't seem to control thier spending they have no other choice BUT to go around begging for money (Sebelius) or castigating a profitable company for what it is LEGALLY doing. I see two BIG problems with these shenanigans...one, the ever growing and still out of control spending in DC as they are exponentially expanding "Duh Gub-mint" and two, the ridiculously complicated tax code that gets worse every year. I also see two solutions...one, go back to the gold standard (fat chance) and two, go to a flat percentage tax code (fatter chance)...if tithing 10% is good enough for God then why isn't a flat tax good enough for Country?

  • Report this Comment On May 22, 2013, at 2:44 AM, jomueller1 wrote:

    Congress members run their own kind of business with the advantage that they are insiders and untouchable. They do not care about the people. Companies have no morals and they control Congress. May be the 2nd amendment fanatics come up with a good idea.

  • Report this Comment On May 22, 2013, at 6:02 AM, kickbishopbrenna wrote:

    Great article..completely changed my point of view on this issue, seems it goes on wholesale in europe too. I got billed from a UK software supplier recently, and bank details were in INDIA..the key point is the "overall effective tax rate" being almost identical to an external competitor's, but the competitor can re-patriate the cash at any time. Ireland, where I live could possibly look at its "tax residency" laws, but I'd guess theres a "quid pro quo" happening somewhere. it would seem ridiculous that we nail our resident companies to pay subsisies to foreig rivals to set up and compete against them, but that in essence, seems to be what's happening, so well played Apple..had to be done!

  • Report this Comment On May 22, 2013, at 7:03 AM, PianoguyScott wrote:

    I never fail to be amazed at the lack of second level thinking regarding corporates income taxes. Corporations don't pay income taxes - their customers do. ALL taxes, income or otherwise, a corporation incurs are ultimately paid by the customers who buy their products. Higher corporate taxes equal more taxes paid by consumers of the corporation's goods – period.

    Painting a corporation as a bogeyman and demanding it pay higher taxes is never followed by: "and by forcing that evil organization to pay higher taxes we will be forcing higher prices on all you consumers"

    That's why there should be no income tax whatsoever, on corporations or individuals. Instead it should be completely replaced by a consumption tax collected at the point of sale, set at a rate to raise similar amounts as our current totally broken income tax system. No more loopholes, no more IRS scandals, no more cash being held overseas, no more painting anyone as good or evil due to complying with labrynthine tax rules. It would create the largest influx in new jobs eve created by cos. worldwide rushing to do business in our business tax friendly country.

    Go to FairTax.org and become educated on this insanely sensible alternative. It solves so many problems so elegantly and intelligently and (once understood) can be championed by both the Left and the Right.

  • Report this Comment On May 22, 2013, at 7:12 AM, PianoguyScott wrote:

    Sorry - saw a typo in my previous post and can't edit it. Replace the last sentence in the first para with:

    "Higher corporate taxes equal THOSE taxes being paid by consumers of the corporation's goods."

  • Report this Comment On May 22, 2013, at 8:39 AM, John4Galt wrote:

    So we're supposed to believe that this Corporate CEO is BAD because he had his company comply with the internal revenue code that congress write and passed and the president signed.

    Yeah, right! Surely Americans can do better in electing representatives and senators to congress!

  • Report this Comment On May 22, 2013, at 10:23 AM, ed1007 wrote:

    >>>fair share.<<<<

    A meaningless term.

  • Report this Comment On May 22, 2013, at 11:33 AM, flightning wrote:

    It is ridiculous that congress must bring in a CEO to grill so they can highlight how broken the tax code is. However, to believe that law abiding companies want to pay higher simpler taxes is naive. These tax loop holes didn't get created out of thin air, they were written to benefit the benefactors. How about start by taxing Samsung? They can't vote. Ireland has a stated goal of keeping corporate taxes low so they can generate their own revenue. This is no different than US States keeping their tax rates low, Delaware anybody? The tax manipulation may be legal, but it really hurts small companies that can't afford the gymnastics, just as people in the middle class can't afford to do the same thing as the wealthy.

  • Report this Comment On May 22, 2013, at 11:38 AM, ralph227 wrote:

    Levin is nothing but a cheap shot artist and is not worth the powder to blow him to h----. What an absolute waste of time and taxpayer money to have a hearing and bash a company that is only obeying the law. He is really a dumb---- and does not deserve to be chairman of anything. I thought McC ain had some sense but that is obviously wrong. Too bad we are stuck with such mediocrity in the congress and in the executive as well.

  • Report this Comment On May 22, 2013, at 12:16 PM, wildcat61 wrote:

    What a waste of time and taxpayer money! Why question anyone over what Apple and every other multinational corporation is doing LEGALLY, according to the US tax code, when these boobs (Senate Committee) probably voted to pass the current tax laws they are upset with. Good gracious!!! Our economy is still in the doldrums and this is all they have time to do; put on a circus.

    Let's get rid of the tax code we now have, close the IRS, institute a flat tax with limits on who pays, i.e. a family of two being exempt on the first $25,000, a family of three exempt on the first $38,000 and etc. on as much as a family of ten. This is a START! What about a 15% corporate rate to begin with. Anything is better than what we now have!

  • Report this Comment On May 22, 2013, at 1:31 PM, sdej wrote:

    @ktgunn: You hit the nail on the head. "Congress isn't the problem; the laws that allow congress to be bought is the problem."

    That's the real issue. Instant-runoff voting and public financing of election is the only way we can have an effective legislative body and average countrymen whose views are truly heard in Congress.

  • Report this Comment On May 22, 2013, at 2:35 PM, famiglia112 wrote:

    I have to echo PianoguyScott, it's amazing how many problems the FairTax would solve. FairTax.org people. Educate yourselves.

  • Report this Comment On May 22, 2013, at 2:55 PM, mikecart1 wrote:

    Another example of the wasted money spent on things that matter very little in the big picture. This goes well with spending millions to make Lance Armstrong a villain and accuse certain pro athletes of using steroids as if everyone else is naturally 6'6" 250lbs and can run a 4.5 40....

  • Report this Comment On May 23, 2013, at 12:08 PM, livtwoski wrote:

    A.) Merely because something is 'legal' does not make it, inherently, 'right'.

    B.) Apple serves as a exemplar of a system of taxation that is clearly broken.

    C.) Getting buried in the dynamics of Levin v Apple, or Rand Paul or any of the partisan nonsense is quite myopic.

    D.) We either live in a society or we do not. A system of taxation that allows Apple to shift from tax burdens to no tax burden does nothing to help pay for the roads people use to get to their stores, the police, the fire, various utilities, public education, etc. The commons has a place in business and, at our current trajectory, many will find lacking a well funded commons has dramatic and sweeping effects upon the society as a whole.

    E.) Those of you who simply talk with the lens of partisan hacks should really re-examine what it means to be an American & what it means to be a good Capitalist in support of his/her country.

    I found most of the comments trivial....at best.

  • Report this Comment On May 23, 2013, at 12:34 PM, NOTvuffett wrote:

    this seems so simple to me, if the corporate tax rate was not so confiscatory, many us multinational corporations would repatriate their foreign profits. even apple, a very profitable company, one that has not rewarded investors in the past via dividends decided that they should pay a good dividend. but since we are in the age of cheap money, it made more economic sense to just borrow the money to pay that and leave the other funds offshore.

  • Report this Comment On May 24, 2013, at 12:18 PM, JCoeur wrote:

    Is anyone fooled any longer by the US Congress? I think everyone has a sense that most of the problems congressmen try to pin on others are really their own doing, directly or indirectly. They are just no doing their jobs, and won't do their jobs as long as they believe they can blame others for their failure.

  • Report this Comment On May 24, 2013, at 1:22 PM, fingerlakes54 wrote:

    Is this a game? We have a country to rebuild and a financial system still on life support. Average Americans have taken it on the chin from the very corporations that are crying the loudest. Do top corporate folks brag about how much tax they avoided while playing bridge at the Country Club? I don't get it. Huge Corporations have the US Military at their beck and call anytime their foreign assets may be in trouble--yet they feel they should let the unemployed and the low paid support America's biggest expense--the military. The tax money saved using these techniques simply justifys a huge bonus for the senior management for their "executive skills" but leave the very country that gives them military protection and legal basis for such corporate existence to fall off the table. It is scary that Corporations can flaunt their excessive power at the expense of the average citizen. It used to sound crazy that the Corporate World and The Financial world desire to impoverish people with lost jobs and low wages and use politics as the muscle to bully people to give their time on earth for the enrichment of the few. --That last time something of this magnitude was attempted it was under the guise of "The Third Reich". Corporations + Big Banking + Political Muscle= destruction

  • Report this Comment On May 24, 2013, at 4:09 PM, oshuneer wrote:

    Just more evidence of the need for federal tax reform. We have a Rube Goldbergian system that has been much tinkered with by various and sundry interest groups paying their way into Congressional offices. Let's have no corporate income taxes and flat taxes for ALL individuals.

  • Report this Comment On May 25, 2013, at 10:23 AM, Mathman6577 wrote:

    The title of the article should read "Congress, pandering to the left-wing and backed by special interest groups, some of whom are likely competitors of Apple (i.e. Google, Microsoft, etc.), bash Apple for being successful".

  • Report this Comment On May 26, 2013, at 10:28 AM, jaybird43 wrote:

    Good for Jurobi. I was going back over your old articles and came upon the one for the "stock act" I wonder how many of your readers know of the "quiet" signing by our pres which took away the Stock Act with the sroke of a pen. Another article is needed to mobilize the troops again.

  • Report this Comment On May 26, 2013, at 8:41 PM, drueski wrote:

    When will Congress call Google, Government Electric, Facebook, Microsoft etc. to ask them questions? Standard operating procedures. Thank Congress.

  • Report this Comment On May 27, 2013, at 9:17 AM, DrSLB wrote:

    I don't know much about this subject, but do have a question. My guess is that all large corporations do what Apple is doing. Why is the government going after Apple rather than another corporation.

  • Report this Comment On May 27, 2013, at 11:27 AM, Morgana wrote:

    How many of you out there were going to vote in as president a man who is doing exactly what Apple is doing: using non-American accounts LEGALLY to avoid taxes. I agree with those who say Congress is at fault. They can change the laws and get rid of loopholes.

  • Report this Comment On May 28, 2013, at 8:57 AM, 4Kit wrote:

    In many ways the incident is a measure of how much has changed in the last 80 years. In 1936 the decision of the English Court in the case of the Duke of Westminster was to the effect that a man had no obligation to pay tax beyond that imposed actually imposed. The corollary was that he had the right to arrange his affairs in any way that was legal to avoid it.

    That probably was the high water mark of personal freedom.

    The principle has been eroded over time in the West as the needs of the state to provide services that were not considered the province of the State in 1936 expanded. The expansion has been exponential over the last decades) as politicians competed with each other to corner the market in charity (the US is a partial exception) and to outdo each other in the promise of benefits to the electorate.

    One is reminded of the bread and circuses of ancient Rome, except that these were kept in check largely by the fact that the Roman politicians paid for them out of their own pockets and not from the public purse.

    Now the spirit of the Duke is dead. One of the members of the panel that reccommended the assassination, one Richard Murphy blogs

    ..."once this provision [the amending legislation] achieves Royal Assent the Duke of Westminster case becomes legal history in the UK. The right to tax avoid in any way the taxpayer pleases will then have been removed. And about time too.

    I’m pleased to have played a part in achieving that goal."

    Mr Murphy may gloat, but I for one am saddened. Another material freedom has been lost.

    The political zeitgeist is that the rich should be shaken down and it is the duty of the citizen to pay... and pay ... and pay. We are approaching the communist ideal of "to each according to his needs; from each according to his ability". It didn't work for the Soviets or the Chinese and it won't work for the Western "centre Left".

    And, if I may mix my metaphors, the new Puritans pillory Apple for for failure to comply with their professed ideal with the connivance of a fourth estate obsessed with envy, while the tumbrils roll towards the execution of our freedoms.

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