Apple Paid $6 Billion in Federal Income Tax in 2012, 1/40 of All U.S. Corporate Income Tax Collected

[marksman]

It wouldn't be at all fair. Sales tax is regressive.

​

http://en.wikipedia.org/wiki/Regressive_tax

I agree. A consumption tax is not a good idea. Besides it completely hamstringing the lower and lower middle class it also stifles consumption on the higher end.

Consumption taxes would devestste small and start up businesses. Sure you can continue with tax exempt status but let's simplify things and tax exempt status alone would not protect small start up businesses from taxes if we switched over to a consumption based system.

Consumption taxation extends the purchasing decision of pretty much everything. Our economy depends on consumerism and consumption in 2012. Such a change would be fatal even if it did make people feel good about getting illegals to pay more taxes.

 

[RobertMartens]

1/40th of ALL corporate taxes collected? Seems like a lot.
Then again they are in the big leagues....

That's like saying Babe Ruth was in the big leagues

 

[SactoGuy18]

marksman,

When the people who developed the FairTax national consumption tax wanted to make it progressive again, they came up with what's known as a prebate, as described in this Adobe Reader PDF file:

http://www.fairtax.org/PDF/PrebateExplained2012.pdf

Essentially, what it does is every legal resident of the USA (citizens, resident aliens, foreigners who are attending US colleges, and aliens with work permit visas) get a payment to cover the cost of the tax up to the Federally-defined poverty level income. If you look at the chart in the PDF file, a family of two adults and two children will get a US$580 per month payment to cover the cost of the tax as defined by prebate criteria.

I believe that we should begin the process of phasing out the income tax and replace it with FairTax within 4-5 years, which would make the USA among the world's most desirable places to operate a business because you no longer tax the process of earning money. And that right there means companies like Apple will no longer need to keep something like 70% of its liquid assets in foreign banks as a means to lower the income tax burden.

 

[JoeG4]

So how else do you make sure people without cars can get to work so they can contribute to the economy?

I'm sorry, the post was supposed to be sarcastic. Hehe, you should've seen my first shot at it (I rewrote it before I posted it) - it was spectacular.

Edit: I think I misinterpreted the tone of your post. Was that last line there before?

Yep I was going to write something more sarcastic but thought being slightly ambiguous would get interesting. The "it's a noble cause but we can't afford to" argument is almost line for line what I've seen time and time again regarding other stuff.

How about, we can't afford not to. There are many programs and services that money be damned, we would not be a civilized country if we didn't have them.

If corporate taxes were eliminated, how would it change companies like Apple? They'd still have tens of billions in the bank, and probably wouldn't change their retail prices, nor their spending habits.

 

[Rodimus Prime]

marksman,

When the people who developed the FairTax national consumption tax wanted to make it progressive again, they came up with what's known as a prebate, as described in this Adobe Reader PDF file:

http://www.fairtax.org/PDF/PrebateExplained2012.pdf

Essentially, what it does is every legal resident of the USA (citizens, resident aliens, foreigners who are attending US colleges, and aliens with work permit visas) get a payment to cover the cost of the tax up to the Federally-defined poverty level income. If you look at the chart in the PDF file, a family of two adults and two children will get a US$580 per month payment to cover the cost of the tax as defined by prebate criteria.

I believe that we should begin the process of phasing out the income tax and replace it with FairTax within 4-5 years, which would make the USA among the world's most desirable places to operate a business because you no longer tax the process of earning money. And that right there means companies like Apple will no longer need to keep something like 70% of its liquid assets in foreign banks as a means to lower the income tax burden.

I have read it. Does not do anything to change the fact that the tax is still very very regressive. The poor take the brunt of the tax.
The "Fair tax" is anything but fair. It has been debunk so many times.

 

[Phrygian]

I think it's more astounding that total corporation tax is only $240bn a year. That is a joke for the size of country the US is.

How big are the tax loopholes in the US, is it just a bus or an oil tanker you can get through them?

this

 

[Eraserhead]

Are you seriously telling me that you trust the USDA and FDA to make good food recommendations?

I certainly trust them reasonably well to keep food safe.

We don't have an exercise problem in this country. We have a diet problem. People eat lots and lots of processed carbohydrates. The poor are the ones most likely to be obese in this country. That's because processed carbohydrates, corn, soy, etc. are subsidized and food products made out of them are cheaper.

Eh, you might have a point.

Unlike the Central and Union Pacific (which combined as the first, not the first and second), the Great Northern was privately funded, and unlike the state run railway, it didn't trample on the rights of the Native American landholders or use virtual slave labor. That is pretty impressive, in my opinion.

And unlike the Atchison, Topeka and Santa Fe Railway who also got land grants and were the second railway to cross the US.

But at the end of the day if that Great Northern's model was so brilliant why wasn't it widely copied by other countries?

How well have state-run airlines done? Not particularly well. The ones that are relatively successful were privatized long ago (such as British Airways). The best move Jimmy Carter made in his entire presidency was deregulating the airlines. That really enable airlines like Southwest (which actually predates deregulation but had to fight in court for years for the right to fly) to really take off (pun intended).

It is very very easy to fly with a different airline if you don't like the one you currently fly with. Most routes to major cities have at least 2 if not more airlines flying between them - if I wanted to go from London to Hong Kong there are probably 20 airlines I could plausibly pick from.

EDIT: With a train I can't think of any two cities that you have more than two serious options for the route to go, and many only have one.

Sorry, I had my presidents mixed up. It was still sued under the Sherman Act.

From the Wikipedia page and the Great Northern Railway Historical Society I don't see any evidence that the Great Northern Railroad was ever split up.

As for the interstate system, it was actually the brainchild of Eisenhower, who envied the Autobahns he saw in Nazi Germany. While obviously there are some benefits to the system, there are some drawbacks as well.

Of course it has drawbacks, but at the end of the day regardless of what some environmentalists on the left say it is a success.

(care to explain all those "banks" in the Cayman Islands, Bahamas, British Virgin Islands, and so on?).

Two out of the three of those are British colonies - and the third still makes 60% of its GDP from tourism .

Maybe the British should stop having tax havens.

 

[Phrygian]

I dreamt of a world where everyone made enough money to live comfortably and had everything they needed.

And then human nature took over, and no one had anything - except those with the biggest guns.

This is the biggest lie/folly of the modern democratic party. That those who make more should pay more (i.e. bring their net worth/income closer to the median) so those who either don't make much money/can't/won't work can pay less and see their net worth/income rise to the median.

I hate to break it to you.....but socialism has been tried and always leads to the same outcome - the top earners realize they could make just as much without working, ambition is sucked out of society, and a dictator moves in to take the country's riches - it's called communism.

Obviously this wouldn't happen tomorrow - but its a slippery slope. Today we're "Making the rich pay just a little bit more so the poor have a fair shot" (as if the person making this statement has any business saying what is fair). Next we see "Well we (the govt) still needs more money so those rich people need to pay a little more - they still make more than most"....

I think you see where I'm taking this.

Except that's not the case at all. We don't have a flood of rich people deciding they don't want any more money because they have enough and are so sickened by the idea of a 1-4% increase in their taxes that they quit their jobs all together.

You think the wealthiest Americans during the Eisenhower administration all decided to do nothing? Tax rates were significantly higher during the cold war while we were fighting those socialist and communist governments you mention and we weren't even remotely considered a socialist government.

I love it when I hear exceptionally wealthy people claim they will quit or stop innovating when they hear about the prospect of higher taxes. All i have seen recently as a result of the fiscal cliff negotiations was an increase in housing sales... and when obama was elected a couple of ceo's firing some employees out of spite so they could get some media interviews.

My favorite is when O'reily on the factor starts claiming that if taxes go up he might decided to quit. That narcissist would do his show for free for the sake of knowing people where listening to him.

Tax law in this country is obviously outdated and full of holes. I hear a lot of good ideas about reforming it from both parties. However neither side can except moneyed interests and nothing gets done.

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Are you seriously telling me that you trust the USDA and FDA to make good food recommendations? We don't have an exercise problem in this country. We have a diet problem.

We have both problems first off. The whole food industry is horrendous in this country.

But to the larger point, i trust the USDA and FDA a hole lot more than the major food companies that would feed us processed excrement if they were allowed to.

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People convinced they have all the answers, with half of the hypotheses, and none of the experience of making any of it work.

All this writing about all these big ideas, all amounting to nothing.

welcome to the internet

 

[Eraserhead]

I'm sorry, the post was supposed to be sarcastic. Hehe, you should've seen my first shot at it (I rewrote it before I posted it) - it was spectacular.

Fair enough

 

[Phrygian]

I must live in alternate reality where 10% of $25,000 is NOT equivalent to 10% of $250,000 - regardless, technically those at $250,000 are taxed a much higher percentage than those at $25,000....it's the loopholes and deductions that muddy the waters.

I must be living in an alternate reality where a person who makes $25,000 who pays 10% ($2,500) suffers significantly more at the loss of that money and the affects on their quality of life than the guy who makes $250,000 ($25,000). Not to mention that person making $25,000 would just get the money back in welfare payments, because most people can't survive with that little revenue... especially in urban areas.


hows that guy making $250,000 dollars going to enjoy his grande mocha late if the barista is evicted from his house and starving in between shifts? I bet that starving barista will make a crappy late. (yea that last part was just for the laughs...)

 

[JoeG4]

Food for thought: If all corporate taxes were suddenly abolished, do you think this would be cause for apple to suddenly invest their entire horde of cash into various things, as in the ideal school of thought being proposed here?

I have a feeling hardly anything would change, except perhaps not sending money all over the world to evade taxes. In that case, a few workers wouldn't have a job anymore, lol.

 

[thewitt]

Apple is not bringing $60B back to the US to invest because the government will take 50% of that in confiscatory tax polices.

Should not be hard to understand.

Apple has requested relief. It's been denied. Apple will now invest this abroad.

 

[Eraserhead]

Apple is not bringing $60B back to the US to invest because the government will take 50% of that in confiscatory tax polices.

Should not be hard to understand.

Apple has requested relief. It's been denied. Apple will now invest this abroad.

Apple makes a profit on its US business right? So why would they have an issue investing any money they wanted inside the US?

 

[thewitt]

Apple makes a profit on its US business right? So why would they have an issue investing any money they wanted inside the US?

Apple has paid income tax on all revenues earned in the US and the money they are investing in the US was earned in the US. They are not going to invest the money they earned in their foreign business because doing so will result in paying significantly more tax to the US government.

So the US government is forcing Apple to invest overseas.

 

[Eraserhead]

So the US government is forcing Apple to invest overseas.

Wouldn't they invest overseas anyway...

 

[thewitt]

Wouldn't they invest overseas anyway...

They are asking for relief specifically to allow them to invest $60B in the US. it's now not gong to happen because the government will bot give them any tax relief.

 

[KPOM]

Apple has paid income tax on all revenues earned in the US and the money they are investing in the US was earned in the US. They are not going to invest the money they earned in their foreign business because doing so will result in paying significantly more tax to the US government.

So the US government is forcing Apple to invest overseas.

Wouldn't they invest overseas anyway...

Perhaps, but they probably don't need $60 billion overseas. One potential reason why they didn't make a special dividend last year like other companies is that to do so, they'd have had to repatriate money and pay up to 35% tax on it. Most other countries don't subject foreign-earned income to domestic taxation. That puts American multinationals at a disadvantage, and actually creates an incentive for companies to reinvest their overseas earnings overseas. In other words, by using that money to build factories and offices overseas (i.e. "ship jobs overseas") they pay less in tax than if they brought that money back and built those offices here.

 

[samiwas]

They are asking for relief specifically to allow them to invest $60B in the US. it's now not gong to happen because the government will bot give them any tax relief.

Is this like the last time the US gave corporations a "relief" and those corporations brought all that money back and invested it in the US?

Or will it be ACTUALLY LIKE the last time, and they bring it back, then proceed to layoff nearly half a million workers, presumably pocketing the rest somewhere? It's been tried and it failed tremendously. They have zero interest in "investing in America". These tax holidays are a sham and nothing more.

Can we just admit that huge multinational corporations are interested in one thing: more and more cash. If you gave one a trillion dollars, they likely would not create any new jobs with it. That is reality, not ideology.

 

[Eraserhead]

Perhaps, but they probably don't need $60 billion overseas. One potential reason why they didn't make a special dividend last year like other companies is that to do so, they'd have had to repatriate money and pay up to 35% tax on it.

If that was a big issue they could easily list stocks on stock exchanges outside the US...

 

[bruinsrme]

They are asking for relief specifically to allow them to invest $60B in the US. it's now not gong to happen because the government will bot give them any tax relief.

large companies with significant assets overseas have repeated asked to bring money back into the country with some sort of tax break. The answer has been no.

 

[Rodimus Prime]

large companies with significant assets overseas have repeated asked to bring money back into the country with some sort of tax break. The answer has been no.

And should stay in no because last they got the tax break on the promise of making more jobs and reinvesting in the US it turned out to be a lie. Instead the money went to executives and stock buy backs and then what they did was shift even more jobs and assets over seas in hope of the next tax holiday so I ask why the heck should we give them another chance and reward them for hurting American works and county.

 

[69650]

We have the same problem here in the UK. There was an outcry and demo's outside their stores when it was revealed that Starbucks pays no corporation tax at all in the UK through clever accounting.

I could solve this problem in an instant.

Tax all multi-national corporations based on their revenue in each country not their profits in each country.

It's would be easy to calculate, could be done quickly and wouldn't require some international treaty that would take forever to agree. It just requires our corrupt and useless politicians to stand up for their constituents for a change rather than their corporate pay masters.

 

[SactoGuy18]

I have a feeling hardly anything would change, except perhaps not sending money all over the world to evade taxes. In that case, a few workers wouldn't have a job anymore, lol.

This is a HUGE problem worldwide, since "offshore financial centers" end up robbing local banks of assets that could be used as collateral for lines of credit and business loans for local economic growth. There was a recent report that US$33 TRILLION in liquid assets sit in these OFC's--much of it in Caribbean islands like the Cayman Islands, British Virgin Islands, Bahamas, and so on. The very fact Apple has 70% of its US$130 billion liquid asset horde sitting in foreign banks shows only a very small extent of this problem.

 

[bruinsrme]

And should stay in no because last they got the tax break on the promise of making more jobs and reinvesting in the US it turned out to be a lie. Instead the money went to executives and stock buy backs and then what they did was shift even more jobs and assets over seas in hope of the next tax holiday so I ask why the heck should we give them another chance and reward them for hurting American works and county.

Are you saying companies like intel, apple, exxon, texas instruments, raytheon are not creating jobs on US soil?

 

[KPOM]

If that was a big issue they could easily list stocks on stock exchanges outside the US...

That would kind of defeat the purpose of doing a dividend (which is to return capital).