The New York Times delves into a divisive subject in American politics right now: Tax avoidance. Apple, like most international companies, sidesteps many California, United States, European, etc., taxes by using tax havens like Nevada, Ireland, Luxembourg, and the Virgin Islands.
The problem for the protagonists is that this is all very legal and practiced by just about every multi-national company in the interest of remaining competitive and maximizing stockholder share. Like most matters of this sort, the problem lies with the laws and loopholes that allow this to happen. Big companies spend a lot of money on lobbyists making sure that those loopholes do not get closed.
What may not be terribly patriotic are Apple, Google, Cisco, and other’s lobbying efforts against paying U.S. taxes on repatriating their overseas earnings. Apple currently has $74 billion overseas and a “tax holiday” on bringing that money and over $1 trillion from other companies back into the U.S. could cost the U.S. federal government $79B, according to the report. (Great Graphic at Bloomberg on why the $1 trillion holiday is likely going to happen.)
Apple responded to the NYT below:
Apple, in a statement, said it “has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.” It added, “We are incredibly proud of all of Apple’s contributions.”
Apple “pays an enormous amount of taxes, which help our local, state and federal governments,” the statement also said, “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.”
- How Apple Sidesteps Billions In Global Taxes (apple.slashdot.org)