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Through a few different methods, The New York Times says Apple has avoided paying millions of dollars in taxes in the U.S. and billions of dollars in taxes worldwide

The New York Times recently released a report on how Apple is evading billions of dollars in taxes annually through a few different methods, but Apple claims it has been playing by the rules all along and pays an "enormous" amount of taxes.

According to The New York Times article, Apple has managed to dodge billions of dollars in taxes around the world. Last year, the tech giant paid $3.3 billion in taxes around the globe on its 2011 profits of $34.2 billion at a tax rate of 9.8 percent. Approximately 70 percent, or $24 billion, of the total $34.2 billion in pretax profits was earned outside of the country while 30 percent was earned in the United States.

This may seem odd, considering the fact that Apple's headquarters are in Cupertino, California. However, Apple products like the iPhone, iPad and MacBook are not manufactured in the state of California.

Through a few different methods, The New York Times says Apple has avoided paying millions of dollars in taxes in California and 20 other U.S. states. It has dodged billions of dollars in taxes worldwide.

How does Apple manage to do this? By putting an office in Reno, which allows Apple to escape California's 8.84 percent tax rate for Nevada's 0 percent; selling digital content, which can be sold from low-tax countries anywhere around the world, and the "Double Irish With a Dutch Sandwich," which allows Apple to cut taxes by directing profits through low-cost Irish subsidiaries, the Netherlands and the Caribbean.

According to former Treasury Department economist Martin A. Sullivan, Apple's federal taxes in the U.S. would have been $2.4 billion higher last year without such methods.

Apple opened a subsidiary called Braeburn Capital in Reno, Nevada in 2006. The reason for this subsidiary is to manage and invest Apple's cash. Braeburn Capital is responsible for depositing profits into accounts and then investing in bonds or stocks. When these investments lead to profit, a certain amount of it is protected from California tax authorities because Nevada has a 0 percent tax rate. If Braeburn was in Cupertino, Apple would be taxed 8.84 percent.

Braeburn's Nevada address also helps Apple reduce its taxes in other states like Florida and New Mexico because these different areas can decrease what is owed when Apple's financial management takes place somewhere else.

While Braeburn's location helps Apple dodge hefty California taxes, those in the state of California are not too happy with Apple's move. For instance, California Legislature upped the state's research and development tax credit to help companies like Apple escape billions in state taxes. The state legislature did this in 1996, 1999 and 2000, allowing Apple to save $412 million since 1996.

Selling digital content is another way Apple can escape pricey taxes. Apple doesn't only sell physical products like MacBooks and iPhones, but also digital items like songs on iTunes. Royalties and digital products can help Apple easily shift profits to low-tax countries because they can be sold anywhere as opposed to physical products.

Apple has another subsidiary in Luxembourg called iTunes S.à.r.l., which takes care of digital sales in Europe, Africa and the Middle East. When apps or songs are downloaded in any of these locations, the sales are recorded in Luxembourg because the country said it would tax the payments collected by Apple at low rates.

The "Double Irish With a Dutch Sandwich" is another way Apple avoids high-priced taxes. Apple established two Irish subsidiaries called Apple Operations International and Apple Sales International. Apple created the first Irish subsidiary because the Irish government offered Apple tax breaks in return for jobs, and also because Apple was able to send royalties on patents developed on California over to Ireland. This meant that profits were taxed at the Irish rate (12.5 percent) instead of the California rate (35 percent).

The second Irish subsidiary let other profits go to tax-free companies in the Caribbean. In addition, Ireland's treaties with Europe allowed some of Apple's profits to move through the Netherlands tax-free. This has helped Apple keep its international taxes at a low 3.2 percent last year.

Earlier this month, it was discovered that Apple made $9.5 billion in Britain last year, but only paid $15.8 million in taxes. This figure came out so low because British tax code rules exempt companies based in Ireland from paying British taxes.

"Apple, like many other multinationals, is using perfectly legal methods to keep a significant portion of their profits out of the hands of the I.R.S.," said Martin Sullivan, former Treasury Department economist. "And when America's most profitable companies pay less, the general public has to pay more."

Apple responded to the NYT article, saying that it pays an "enormous" amount of taxes and also creates jobs in California and other areas in the U.S. as well as other countries.

"Over the past several years, we have created an incredible number of jobs in the United States," said Apple in its response. "The vast majority of our global work force remains in the U.S., with more than 47,000 full-time employees in all 50 states. By focusing on innovation, we’ve created entirely new products and industries, and more than 500,000 jobs for U.S. workers — from the people who create components for our products to the people who deliver them to our customers. Apple’s international growth is creating jobs domestically since we oversee most of our operations from California. We manufacture parts in the U.S. and export them around the world, and U.S. developers create apps that we sell in over 100 countries. As a result, Apple has been among the top creators of American jobs in the past few years. 

"Apple also pays an enormous amount of taxes which help our local, state and federal governments. In the first half of fiscal year 2012 our U.S. operations have generated almost $5 billion in federal and state income taxes, including income taxes withheld on employee stock gains, making us among the top payers of U.S. income tax."

This isn't the first time NYT targeted Apple in its reports. Back in January, NYT attacked Apple for the treatment of workers in Apple's suppliers' factories overseas. The report cited issues like long hours, lengthy overtime, and poor working/living conditions as problems occurring in factories like Foxconn, and NYT claimed Apple was doing nothing to change these issues.

Apple ended up voluntarily joining the Fair Labor Association (FLA), which offers random, rigorous inspections of company factories. The FLA ended up finding overtime/pay/safety violations at Apple's Foxconn plants in China, and it's working with Apple and the suppliers to fix it.

Sources: The New York Times, The New York Times

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Why are we mad about companys not paying taxes?
By Dr of crap on 4/30/2012 10:18:08 AM , Rating: 5
Same as GE not paying taxes.
We set up the game, We gave them the loopholes and the deductions, and then when the companys use them to NOT pay as much taxes as we THINK they should we get mad about it.

I know I use ALL deductions possible to not pay taxes.

Do you ever here anybody, or any company, say that they want to pay the govt as much taxes as they can?

By kattanna on 4/30/2012 10:23:06 AM , Rating: 4
I know I use ALL deductions possible to not pay taxes.

LOL yep.

RE: Why are we mad about companys not paying taxes?
By Schrag4 on 4/30/2012 1:16:48 PM , Rating: 1
Yes but they'll only give above and beyond if everyone else is forced to as well. I'm sick and tired of rich liberals whining that they should be paying more. Don't they know that the IRS would gladly accept any more that they pay above their "fair share?"

By Samus on 4/30/2012 2:05:26 PM , Rating: 5
As a S-corp operator, I agree corporate taxes are drafted to be as 'loopholed' as possible.

I especially love the new amendment to s-corps allowing deductible contributions to politicians to be matched 'pre-taxed' with personal contributions up to $10,000 dollars.

Basically I can give $20,000 to a politician and write off $10,000 of it from my personal income taxes, basically screwing the IRS and getting me a small favor from a politician down the road.

Who writes this stuff? Ohh...yeah....

By FITCamaro on 5/1/2012 12:19:41 AM , Rating: 2
No you hear them say they want other people to pay as much in taxes as possible. Some of the biggest liberal Democrats out there are actually tax delinquents and haven't paid their taxes.

By YashBudini on 5/6/2012 12:32:11 AM , Rating: 2
Spiro Agnew comes to mind.

By amanojaku on 4/30/2012 11:42:22 AM , Rating: 5
We set up the game, We gave them the loopholes and the deductions, and then when the companys use them to NOT pay as much taxes as we THINK they should we get mad about it.
What do you mean "we"? I didn't get a say in this, or they sure as hell would be paying their fare share of taxes. It's a shame when 20% of federal taxes comes from corporations, but 40% comes from the people's income. I'm willing to bet corporations as a whole make more money than the people, so why do the people pay more? And taxes are slanted in favor of certain types of wealth, wealth that they average person finds it almost impossible to obtain. In fact, even small businesses struggle because they are not able to get the tax exemptions and deductions that multinational corporations get. The more money you have, the easier it becomes to keep it to yourself. It's never been a better time to be rich.

RE: Why are we mad about companys not paying taxes?
By wookie1 on 4/30/2012 12:49:55 PM , Rating: 3
As a thought exercise, consider for a moment where a corporation gets its money..............

Here's a hint, the only source of income for a corporation is to sell something to you and other consumers............

If you have now figured out that YOU are actually paying the taxes because corporations have to price that into the product, and if they're not making money they go out of business, you've finally figured it out. Corporate taxes are another way for the government to tax you more without you realizing it. Just another stealth tax.

RE: Why are we mad about companys not paying taxes?
By Akerans on 4/30/2012 3:01:11 PM , Rating: 5
Using that logic.

Since corporations pay your salary, then corporations are paying your taxes.

By wookie1 on 5/1/2012 2:02:16 PM , Rating: 2
No, using that logic, consumers are paying my taxes. Corporations only have money because consumers buy their product/service.

By Solandri on 4/30/2012 3:16:44 PM , Rating: 5
Whether the corporation or individual pays taxes is irrelevant. Money is just a representation of productivity. The only sources of productivity in a corporation are individuals. So in the end, all taxes are paid by individuals. Either directly via income taxes, or indirectly via lower wages or higher prices.

What taxing a corporation does is hide the actual tax burden. Instead of knowing 30%-35% of your work goes to pay taxes, you only see taxes of 15%-20%. The remaining 10%-20% gets siphoned off through depressed wages and higher prices. Your anger thus gets deflected at the "evil corporation" instead of at the government. And your ability to decide whether or not a government program is really worth it is impaired.

I don't have a problem with using taxes to promote/ dissuade certain types of behaviors (whether individual like sin taxes, or corporate like a higher capital gains tax on investments less than 1 year). But people have got to stop thinking of this as us vs. them. The global economy is a closed system - shifting taxes to corporations does not magically give individuals more money to spend. If the world's governments take 30% of the world's GDP, the average person is going to be directing 30% of his productivity into the government's coffers regardless of where the taxes fall.

By zozzlhandler on 4/30/2012 8:35:40 PM , Rating: 1
The only sources of productivity in a corporation are individuals.

This is a Marxist idea (and I mean that literally, not as an insult) and it is wrong. Robotics and machinery to not contribute to productivity? They absolutely *do* contribute.

By Reclaimer77 on 4/30/2012 8:40:48 PM , Rating: 2
A corporation built those robots and machines. Hundreds more build the components for said robots and machines. So ummm, yeah, think it over.

By FITCamaro on 5/1/2012 12:24:37 AM , Rating: 2
To build on Reclaimers reply, who runs and oversees those robots? People.

Your statement that individuals being the productive source of a corporation is a Marxist idea is blatantly false. Marxism focuses on the collective, not the individual. The individual is supposed to give up their rights for the good of everyone else. A corporation may be a group of individuals working towards a common goal but no one is there by force. You can quit a job any time you want.

By Just Tom on 5/5/2012 8:51:01 AM , Rating: 2
Actually, believing individuals are the productive source of corporations is Marxist. Read up on Marx's Labor Theory of Value, the concept is pretty simple. It is also completely wrong, but Marx was good at being wrong.

By FITCamaro on 5/1/2012 12:21:21 AM , Rating: 2
BS. You do get a say in who you vote for for your representative and Senators. Part of that whole constitutional republic with a democratically elected Congress thing.

RE: Why are we mad about companys not paying taxes?
By Boze on 4/30/2012 11:59:01 AM , Rating: 3
A tax on a corporation is just an additional tax on everyone in the country, state, parish, county, city, etc. in which that corporation does business.

Corporations are made up of people. If people (corporations) can offset the additional costs of doing business (read: taxes), then they'll do so by increasing the price of their goods or services.

Its pretty amazing that the New York Times' writers don't understand this. Evading taxes allows a company to lower its prices on good, especially if its a competitive marketplace, like say... smartphones and tablets. OR it allows the company to produce better earnings and higher values for shareholders. Both of which are GOOD for the country in which they operate.

Unless, of course, they operate in a highly socialist country where the government is willing to tax the hell out of everything in order to buy the votes of those that are receiving the entitlement checks. After all, if someone's threatening your Lincoln Navigator with 24" rims with repossession, that's something you'd likely want to know about, so you can vote for the candidate / party that says, 'Don't worry, I'll keep the checks coming!'.

RE: Why are we mad about companys not paying taxes?
By wookie1 on 4/30/2012 12:51:11 PM , Rating: 2
The NYT has a narrative to support. Do you really expect anything else?

By FITCamaro on 5/1/2012 12:25:56 AM , Rating: 2
Pretty much. Its the New York Times. They're liberal to the core. Of course they're going to attack corporations. Where's their write up on GE though? Doesn't exist. Why? Because GE is another organization controlled by liberals. One's with close ties to the President.

By chripuck on 4/30/2012 1:11:51 PM , Rating: 3
The problem is the inter-dependency of multiple taxing entities. It's the fact that they are operating outside the spirit of the law that's the issue.

Fact of the matter is I can't say I earned wages in Tennessee (which has no income tax) while living and working in Atlanta. Meanwhile Apple is exactly able to do that.

By RedemptionAD on 5/1/2012 7:21:34 PM , Rating: 2
I now think that since a buiness is made up entirely of people that actually pay tax and a business is an inanimate object, the business itself should pay no tax.

The tax code should be reworked so that unique specialty loopholes are removed for personal taxes, and business owners are taxed at the personal taxes format, not the business one. I can only see about 3 actual excemptions that need to exist, homeowners, children, retirement accounts, a bounus one would be a fit american credit for below 21%/25% M/F Body fat % (which I have some actual science to prove it won't cause mass eating disorders, while giving people a reason to not be extremly unhealthy).

A 20% flat tax should be enacted and the majority of americans will see their taxes fall, while due to an average effective tax for the wealthy of 15-18% theirs will go up, increasing general revenue for the government, while decreasing reasons for businesses to use these crazy loopholes that keep money out of where it is actually owed.

EFFECTIVE tax rate
By MadMan007 on 4/30/2012 9:57:16 AM , Rating: 4
This is why I get angry every time I hear politicians with an agenda talk about the high US business tax rate. They warp the truth, as politicians are wont to do, by only stating the statutory tax rate without talking about the effective tax rate. It makes for a simpe sound bite that morons can understand, but it is far from the truth.

RE: EFFECTIVE tax rate
By Crazyeyeskillah on 4/30/2012 10:02:28 AM , Rating: 2
it's okay i'll cover it with my high taxes.

RE: EFFECTIVE tax rate
By quiksilvr on 4/30/2012 10:05:02 AM , Rating: 2
RE: EFFECTIVE tax rate
By Dean364 on 4/30/12, Rating: 0
RE: EFFECTIVE tax rate
By Iaiken on 4/30/2012 11:41:19 AM , Rating: 2
If the tax rate were 15% they would STILL keep the money in off-shore shelters because 15% is more than 0%. Reducing the rate doesn't solve the problem if you don't sort out the loopholes that are already in place.

In the end, you can't really blame the corporations for doing this because to NOT do it would be a dereliction of their fiduciary duty to the shareholders. In most cases, these shareholders mutual funds and pension funds that are bound by law to act in the exclusive interest of maximizing the growth of the fund and so they will always vote to dodge taxes.

RE: EFFECTIVE tax rate
By mondo1234 on 4/30/2012 12:00:22 PM , Rating: 2
Hate the game, not the player. A lot of companies do this.

RE: EFFECTIVE tax rate
By chripuck on 4/30/2012 1:15:43 PM , Rating: 2
No, it's fun to hate the player too, even if I own an iPhone...

RE: EFFECTIVE tax rate
By chripuck on 4/30/2012 1:14:36 PM , Rating: 2
I guess you didn't read the article? Walmart pays 25% tax rate...

Nothing to see here
By Varun on 4/30/2012 10:22:37 AM , Rating: 2
There is nothing illegal here. I am no Apple fanoi (in fact, I can't stand their products) but until this is made illegal, Apple needs to do this for their shareholders. Close the loopholes...

RE: Nothing to see here
By acer905 on 4/30/2012 12:46:23 PM , Rating: 2
As far as I am concerned, kill every tax law in existence and replace it with just two sentences. Businesses pay 15% of all profit earned, regardless of where. Individuals pay 15% sales tax on all items purchased, regardless of where.

No income tax
No deductions
No tax credits
Nothing but a simple, flat rate, based on whether you are a consumer (person) or producer (business)

RE: Nothing to see here
By chripuck on 4/30/2012 1:17:34 PM , Rating: 2
And if a company operates out of 6 countries and they all adopt the same rule the company would pay 90% of it's profits to those 6 countries. Heaven forbid they sell in a 7th country.

RE: Nothing to see here
By SoCalBoomer on 4/30/2012 4:52:03 PM , Rating: 2
You're mis-reading it.

The tax would be applied at the same rate in each country or state. So money made in the UK would be taxed and paid to the UK; money made in the USA would be taxed by and paid to the USA/IRS; etc.

That's what he's saying.

RE: Nothing to see here
By Lochness22 on 4/30/2012 1:31:10 PM , Rating: 2
Congrats, you just killed the economy with your 15% sales tax.

I'm for more of a flat tax system, but nothing is this simple. Nothing.

There are many good reasons for people to not pay federal taxes but the best one is if they can barely afford rent and food. Increasing the tax on poor people will just create more poor people.

RE: Nothing to see here
By acer905 on 4/30/2012 6:21:19 PM , Rating: 2
Honestly, the argument that a flat tax is worse for poor people is simply getting old. If you earn the federally mandated minimum wage, $7.25 per hour, and work a full 40hr work week all year, you earn $15,080 in a year. The 2012 poverty line for a person in the lower 48 states is $11,170. IF everything that person purchased was taxed at 15%, and no income tax was applied, that would be $12,818 net. $1,648 higher than the poverty line. For a minimum wage job. Anyone who can only hold a minimum wage job and has any significant debt, apart from possibly a house and car payment, has other problems.

If anything the people with money would be hurt the most, as often there are caps to tax rates. You simply cannot be taxed over a certain income. Specifically, with regards to the current taxation for Social Security, any wages over $110,100 are not taxed. Make a million in a year? Its okay, we'll just tax the first hundred thousand. Switch to a flat tax and remove that limit and Social Security would gain $54,513.(Assuming the current 6.2% rate, the taxable portion of the cap is only $7,486.8, instead of the 62,000 that it should be.)

And, even if all that still makes you scream out about the "poor people" then simply add up the combined taxes that a person pays who is considered poor, and make that the flat tax rate. Even then, the taxed income would probably increase due to the elimination of loopholes for the excessively wealthy, and likely those in the middle class would pay a lower tax rate as well.

RE: Nothing to see here
By ilt24 on 4/30/2012 2:18:57 PM , Rating: 2
Businesses pay 15% of all profit earned, regardless of where.

If this was the tax law in 7 different countries a company did business in, what would their tax rate be?

RE: Nothing to see here
By Kurz on 5/1/2012 10:19:37 AM , Rating: 2
The Sphere of Influence is only within the USA.
You cannot tax someone for their economic activity in another country. Soverignty comes to mind.

a 1% Sales tax is all that is needed. Though Everyone pays the tax regardless if you are a business or a individual. You'll generate enough revenue I assure you (Many articles on this)

Stop taxing income since the person paying that tax is going to try to find a way to get out of it. You are moving the burden of taxing away from the individual.

If you are at poverty level you can have a tax free card of some sort.

Mo Money, mo less tax bracket
By Lochness22 on 4/30/2012 1:38:40 PM , Rating: 2
So Willard Mittimus Romney and Apple both paid a lower tax % than me?? Key the Lee Greenwood!

? And I'm proud to be an American! ?

However, there is nothing I hate more than the IRS, so part of me is actually happy they pay them as little as possible.

RE: Mo Money, mo less tax bracket
By Solandri on 4/30/2012 4:06:21 PM , Rating: 2
Romney and Buffet are pretty much exceptions to the norm. Even the 15% capital gains tax rate is pretty high. To get an effective Federal tax rate of 15% using only the standard deduction and no tax credits, you need an income of around $50k. But add in itemized deductions and credits, and the average American paying 15% makes about $150k (Buffet's secretary made a bit more than that).

There's an inversion above $5 million. Those making $5+ mil on average pay less than those making $2-$5 mil, and those making $10+ mil on average pay less than those making about $600k. That's where the Buffet rule would really help. But on average those in Romney's and Buffet's income bracket pay a heckuva lot more taxes (as a percentage) than you and I do; nowhere near as low as 15%.,...
2009 figures, column T:

4.8% = $1 - $4,999
2.6% = $5,000 - $9,999
2.3% = $10,000 - $14,999
3.0% = $15,000 - $19,999
4.5% = $20,000 - $24,999
5.4% = $25,000 - $29,999
6.0% = $30,000 - $39,999
6.8% = $40,000 - $49,999
7.7% = $50,000 - $74,999
8.5% = $75,000 - $99,999
11.9% = $100,000 - $199,999
19.6% = $200,000 - $499,999
24.4% = $500,000 - $1 million
25.3% = $1 million - $1.5 million
25.6% = $1.5 million - $2 million
25.8% = $2 million - $5 million
25.4% = $5 million - $10 million
22.6% = over $10 million

In general, it's a bad idea to decide policy based on exceptions. e.g. Raise taxes on rich people because those two guys paid so little tax. You should instead concentrate on laws making the exceptions conform with the average.

If you're middle to lower-upper class and paying a high effective tax rate, you are most likely single and renting. The home mortgage deduction is the biggest tax break there is, and being able to spread one person's income across two people for tax purposes helps tremendously. It has very little to do with rich people (on average) not paying their fair share.

RE: Mo Money, mo less tax bracket
By Reclaimer77 on 4/30/2012 6:11:32 PM , Rating: 1
Actually Buffet is a liar who pays something in the order of a 40% tax rate. In fact he's paying so much in taxes he's currently SUING the IRS because he thinks he should pay less lol.

The man is a hypocrite and a lying shill for Obama.

The "Buffet Rule" is based on total, and easily disproved, lies. It's class warfare election year rhetoric, and the man it's named after is damn well aware of it. He knows that he's paying FAR more than 15%.

Not to mention the "Buffet Rule" is NOT a serious response to budgetary problems. It's projected to raise $40 billion more over 10 years, big deal. In ten years we'll add $16 TRILLION to the debt. Hello?

RE: Mo Money, mo less tax bracket
By ritualm on 4/30/2012 8:15:59 PM , Rating: 2
Hold it right there, hot shot. NetJets suing the IRS for being overcharged in excise taxes = Buffett suing the IRS? What left-field BS is this?

Not to mention this guy has more foresight than the rest of the market. The Oracle of Omaha > Reclaimer77.

RE: Mo Money, mo less tax bracket
By Reclaimer77 on 4/30/2012 8:30:22 PM , Rating: 2
What's the difference? If he really believed that he's not "paying enough taxes", there wouldn't be this lawsuit. He's full of it.

Warren Buffet isn't a person. Get that out of your head. Warren Buffet is a giant multimillionaire entity. If one of his businesses sues the IRS, then HE is suing them for all intents and purposes. If the IRS sues a subsidiary for dodging taxes, then HE is a tax dodger.

The line is so grey here I'm amused you're even able to attempt to toe it.

RE: Mo Money, mo less tax bracket
By room200 on 4/30/12, Rating: 0
RE: Mo Money, mo less tax bracket
By ritualm on 5/1/2012 4:00:06 PM , Rating: 1
Wow, you're too dense.

There is a very clear difference between "not paying enough taxes" and being overcharged on tax assessments:
The Internal Revenue Service improperly assessed the so- called ticket tax, an excise tax on payments made in exchange for air transportation, NetJets said in its complaint in federal court in Columbus, Ohio, dated Nov. 14.

NetJets seeks a refund and abatement of the ticket tax. The company claims in its suit that Congress intended the tax to apply to passengers who use commercial or charter aircraft owned by others.

“The ticket tax was not intended to apply to private aircraft owners and the fees they pay to maintain and operate their aircraft,” NetJets said in the complaint.

NetJets also claimed that the IRS didn’t provide any guidance about the types of fees for which the company would have to collect the ticket tax from passengers.

Last year I was hit with a customs import tax of $420 (plus $30 non-refundable post office handling fee) on the basis I imported $17,000 worth of audiovisual goods. There was one problem: the total value of the imported goods was $170. I had to get the parcel reassessed; customs eventually refunded $380 of it back.

Warren Buffett isn't a person? Google disagrees with you:

Warren Buffett did say the rich people in America were not paying enough taxes. But corporations are not persons, they are entities. Corporations don't breathe, drink, eat, commute to work etc. Corporations and companies don't get taxed at the same rates and tiers as individuals.

Everything you replied was wrong, and you didn't even read the very article you linked. Way to go, douche.

I don't see the problem.
By rvertrees on 4/30/2012 11:27:40 AM , Rating: 2
So Apple found the lowest tax states and countries to base their business. How is this tax evasion? Why would you pay 8.9% taxes in California when you could do the same work in Nevada and pay 0%? Its just common sense.

RE: I don't see the problem.
By wookie1 on 4/30/2012 12:55:37 PM , Rating: 2
This is a key frustration that the Dems have. All these damn states have the freedom to set their own rates. That totally gets in the way of the blue states raising taxes to support their social model, because it turns out that businesses and people eventually get sick of it and locate themselves someplace with a lower tax burden. That's why the dems keep trying for national sales tax or VAT, to take away the competition between states.

RE: I don't see the problem.
By chripuck on 4/30/2012 1:20:12 PM , Rating: 2
Because they're still in California?

Seriously, I don't care about states competing for "business" but it's shady to "be located in Reno" but actually "be in Cupertino", even if it's legal.

RE: I don't see the problem.
By rvertrees on 4/30/2012 3:38:13 PM , Rating: 1
The office in Reno is used to sell digital goods. All of that income is produced in the state of Nevada and is not subject to California taxes.

So by your logic since the headquarters are in california every dollar Apple makes should be taxed by california. Even the money made outside of the United States. Add in the taxes by other country and states and you would bankrupt Apple.

RE: I don't see the problem.
By Cheesew1z69 on 4/30/2012 4:11:06 PM , Rating: 2
Apple opened a subsidiary called Braeburn Capital in Reno, Nevada in 2006. The reason for this subsidiary is to manage and invest Apple's cash. Braeburn Capital is responsible for depositing profits into accounts and then investing in bonds or stocks. When these investments lead to profit, a certain amount of it is protected from California tax authorities because Nevada has a 0 percent tax rate. If Braeburn was in Cupertino, Apple would be taxed 8.84 percent.

Blame Congress, not Apple
By tayb on 4/30/2012 10:35:37 AM , Rating: 2
We elect the members of Congress who write the loopholes into the tax code. If we are angry that companies such as Apple are supposedly not paying their "fare share" the anger should be directed at Congress, not Apple. Why wouldn't a company use loopholes and deductions to their greatest advantage? Do any of you refuse to use deductions??

Again, blame Congress. If you don't like the way your representatives are acting call them, email them, and vote against them at every election. The turnouts for congressional votes are pathetic. Go vote. But don't sit at home blaming Apple. Bribery is rampant in Congress but people don't get bribes when they aren't holding a public office. These people rely on you not giving a crap.

RE: Blame Congress, not Apple
By SkullOne on 4/30/2012 11:21:01 AM , Rating: 5
Yep, ALL companies do this. NYT should be slapped for naming Apple alone in order to generate clicks.

This is because our tax system is broken. Apple does this. Microsoft and Google do this. Facebook and Amazon do this. All the car companies and oil companies do this. Bottom line is they are all playing the system because the system allows them to. Congress will never fix the system because that means all the fat cats in DC would lose out on money too.

Rich become richer while the rest of us work our ass off to barely make ends meet. I don't care if they're Democrat or Republican. We need to limit the amount of time Representatives and Senators can actually hold office in order to actually make change happen in the US at this point because Congress needs an infusion of young blood every few years to make them understand what Joe Average is really going through. Then and only then will we see tax reform and other things finally start to change.

RE: Blame Congress, not Apple
By Reclaimer77 on 4/30/2012 5:58:00 PM , Rating: 2
Loopholes aren't specifically written into the tax code. That's rhetoric. What happens, however, is the tax code is made so monstrously complicated and unnecessarily huge that the loopholes are just inevitable.

Everyone arguing for higher taxes, you don't seem to realize that your quality of life in so many ways directly hinges on corporations finding a way to be profitable. Without these "loopholes" the cost of common goods and services would either be prohibitively high, or in some cases, the product in question just wouldn't exist at all in it's current form.

But by all means, be idiotic and argue for our own destruction.

RE: Blame Congress, not Apple
By room200 on 4/30/12, Rating: -1
By Jahooba on 4/30/2012 12:44:03 PM , Rating: 2
The NYT is apparently the spearhead of Obama's socialist, redistributable wealth agenda. Pay attention to what's happening here - this is all a part of getting Obama reelected. The media is going on the attack against corporations (and even successful private citizens) in order to fire up their base. They create a crisis to divert attention from the failures of the Obama presidency. It's like a magic trick where you always have to watch the other hand. This is how they control the conversation, and this is how they get away with so many scandals: misdirection. It's scary.

States are allowed to decide how much corporate tax to impose. I grew up in Delaware where there was either no, or very little, corporate tax - so we had a lot of banks. Banks were everywhere - everyone I knew worked for some kind of bank. But it was Delaware's decision NOT to gut companies for wanting to exist in their state, thus creating jobs and bring revenue to the state. And it works - let me tell you, Delaware had some really nice highways/ roads!

Probably one of the reasons Apple is doing so well is because they manage their business remarkably well despite the government trying to gut them at every turn.

And then you have the fact that Apple is the most successful company in the world in terms of profit and recognition, and they're non-union! This drives the socialists at the NYT mad! How dare they not succumb to union thuggery!

RE: Sigh*
By Ringold on 4/30/2012 4:02:21 PM , Rating: 2
Nailed it in terms of the NYT. Their political bias is well known and documented, so no one should be surprised.

The only new twist to what they've done is switch targets. In years past, liberals went in to such blind rage over energy companies they couldn't look past Exxon. Now they've got a little smarter, inhaled a few deep breathes, and chosen a successful company that isn't as polarized already.

The attacks are probably also tinged with jealousy. News papers would LOVE to pay income taxes, but that would require making a profit in this bold new digital era.

This is the problem
By tng on 4/30/2012 10:24:08 AM , Rating: 2
Apple claims it has been playing by the rules
...And they have been playing by the rules, not just in the US, but internationally as well.

The environment that politicians set up to try in many cases to "socially engineer" via taxes ends up hurting many individuals and small businesses while allowing large businesses like Apple and GE to pay virtually nothing. Not really a wonder why the economy around the world is in the straights it is in.

Funny comment
By vignyan on 4/30/2012 1:49:39 PM , Rating: 2
Apple also pays an enormous amount of taxes which help our local, state and federal governments.

Apple's responds as though this is a social work - someone please make sure they understand that it is not optional!

And why do they keep bragging about how much income tax the state gets because of their employees?? The accusation is against them - not their employees.

By chavo on 4/30/2012 2:32:56 PM , Rating: 2
In the response from Apple: "Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules".

Personally, I find it both revealing and troubling that Apple seems to equate laws and accounting rules with ethics, as if complying with the law is all it takes to conduct oneself in an ethical manner.

I wonder where morals fit into this picture?

We all deserve better than this, and not just from Apple.

By sarfralogy on 4/30/2012 3:43:50 PM , Rating: 2
In news broken by Fosspatents and Reuters, Apple CEO Tim Cook and and Samsun CEO Choi Gee-sung have agreed to meet in mid-May to discuss a settlement in the patent infringement case that Apple brought against Samsung and its like of Galaxy smartphones and tablets.

By Arsynic on 4/30/2012 4:14:11 PM , Rating: 2
...and maybe they won't be so broke as to try and shake down another company.

I wonder if Apple is still paying for the healthcare for retired employees or investing in projects that are doomed to fail. Nope, that's because corporations choose their leaders with people who are qualified to do so while any idiot 18 and over can choose an elected official.

When you allow idiots to put someone in a position of power, don't be surprised if they choose a fellow idiot. This is the main reason the founding fathers wanted to avoid a Democracy. It's mob rule by the Dumb (M)asses.

Where's the sharholder outrage?
By DT_Reader on 5/1/2012 2:31:13 PM , Rating: 1
Apple rakes in billions in profits and hordes it overseas in various accounts so it avoids paying taxes. OK, that's legal and I understand why they do it. But why do the shareholders put up with it? It's not Apple's money, it's the shareholder's money. If I were an Apple shareholder, I'd rather have 65 cents of a dollar dividend (the other 35 cents going to taxes) than zero cents of a dollar sitting in the Cayman Islands.

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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