In an interview with the BBC on national British radio, Apple co-founder Steve Wozniak said that he believes Apple should pay 50% tax, along with all other companies. He said he doesn’t like the distinction of different rules between corporations and individuals.
Today, although Apple has never been found to evade tax or conduct illegal practices, it does not pay at top-rate tax, using a variety of financial engineering schemes to redirect profits elsewhere, such as Ireland, with significantly lower tax requirements.
The BBC also published a short video interview with Wozniak, where his comments are a bit more subdued. Whilst he still says that Apple should pay more tax, he says it may make sense for companies and individuals to be charged at different rates.
Wozniak also says that Silicon Valley, in general, is too focused on money. He points the finger at investors, who distort the company vision away from making great products and towards generation of revenues and shareholder returns.
The tax arguments have been put to one side recently as government focuses on a more pressing matter in regard to encryption regulations, following Apple’s battle with the FBI over the San Bernardino iPhone. As before, Wozniak repeats his stance that Apple is in the right.
“There are politicians who do not have a clue as to what cyber security is all about trying to pass laws saying that Apple has to make a product less secure.
“Why? That’s a crime. That is just so horrible. I just cry! Why would Apple do it for such a weak case where the government were not going to get any valuable information at all – it’s impossible.”
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These days I’m not sure if he’s an idiot or just saying things for effect.
I think a little of both. I agree with him over the security issue, but the rest? I think he’s been drinking just a little too much Jolt Cola or maybe he’s smokes pot.
If Apple paid $36+ Billion instead of $19+ Billion in taxes, their share price would go down significantly, and their Net Profit margin would go down to only 15%, instead of around 24%. They would probably have to lay people off or just take a massive hit to the stock value, and they would probably end up reducing the dividends, not be able to buy back as many shares, and it would piss off a LOT of shareholders, many of which are employees. If all US based corporations had to pay 50% tax rate, companies like HP would probably barely break even, Microsoft would probably end up making only 5% Net Profit, and a lot of other companies would be hurting and I’m sure a lot of people would get laid off. Great Woz, you’re really thinking things through. Sometimes Woz sounds like he’s smoking pot talking out of his ass.
None of us should have to work 50% of our time, just to pay taxes, that’s just outrageous. The government should take about 10% at most and be happy with that, the Feds and States governments just need to spend/waste less money.
In the Netherlands we have different scales depending on income. If you make 19.000 < 52.00 42% tax and anything higher is 52% tax… That's why we have social security and good roads while the US is still living in the stone age… I think the whole Panama Papers scandal is great.. If companies that make billions in revenue would start paying the tax they are supposed to not a single person in the US would have to live beneath poverty level…
A person who only erans 19.000€ a year pays 42% taxes?! What the fuck. Are you sure? That can’t be right
Olaf, thank you, for a breath of sanity.
People forget there are amazing countries like Norway etc. that have huge tax percentage rates but you actually get something in return.
All we get in the USA is crony capitalism sponsored government subsidies, tax breaks, and loopholes for the giant corporations with billion dollar lobbying teams, and not to mention, perpetual warfare.
The other thing is if they did lay off people, the government loses the taxable income from those individuals and if they can’t get a job, they become a burden on public support services too.
The US isn’t the best when it comes to healthcare and the like, but in many countries it’d probably make an awe full lot of sense to sacrifice some corporate tax in order to encourage low unemployment rates. Not only do those employees pay tax but you have less people around the poverty or low income ranges to support which reduces social services, public health care and possibly even areas like public schooling.
He just has morales and a sense of fair play, which is something business surrendered a long time ago. Apple and the rest of the big multi national tax evaders rely on the public services in the countries in which they trade but pay little to nothing into the pot.
You forget that morals are a human element and that every human working at/for Apple and buying their products is paying tax. Every employee pays income tax. Every consumer does the same and further pays sales tax. The first mistake an emotional zealot or a dumb-as sand idiot will make is to confuse a corporate entity with a person.
I hear what your saying. I just can’t take anything Steve Wozniak says about Apple or any other company credible. He has a very salty spot for Apple. They are many companies like Apple doing the exact same thing. Steve Wozniak on the other hand is always quick to point out anything Apple might be doing negatively. Never really talking about other companies doing the same. His negative comments for Apple has increased after Jobs passing. I personally don’t fully understand what all these companies are doing with all the tax trickery. Plus how there getting away with it. I do understand how it feels to throw salt on open cuts. This subject is something our US government which doesn’t have a clean history themselves, Apple and other companies in Apple same position need to seriously work out. What there doing is not illegal but it’s not totally great either.
A corporation is a robot driven entirely by profit; they are “programmed” to make the most money possible using the least amount of resources…that’s all they know how to do, and that’s how the system is designed.
There are no subroutines for honesty, morals, and fairness…none.
This is why corporations were only supposed to exist temporarily.
Unfortunately, those days are long gone…
Guybe: It’s not entirely about picking on Apple, but they are an easy target and an easy example.
The loopholes they take advantage of are programmed into the system…They got there because many people paid lobbying firms billions and billions of dollars to buy our politicians, to the point where the lobbyists literally write the laws themselves, and all our representatives do is vote on it.
They don’t represent us anymore…That’s the problem.
Until money is removed from politics, this will never end.
The University of Princeton did a study, over 20+ years and they took major policy positions…They found that public opinion has ZERO influence on public policy. ZERO. Ever heard the expression “money talks” ?
I don’t think THIS is what the person who coined that phrase had in mind, although it fits rather perfectly.
Get the money out of politics…If you care about this, google WolfPAC and join with them.
They are non-partisan and have only one goal — to end this ridiculous system of corruption and get money out of politics.
@Bruno Charming.
The fundamental flaw in that argument is that tax evasion is only possible by large companies. Small businesses pay their taxes. You could say they would evade them too if they could, but they don’t and so pay into local authorities which then pay for the fire service, hospitals, police and the rest. It creates an unfair playing field. To give an example – Amazon and a few other big online retailers found a way to evade paying sales tax on DVDs a while back here in the UK by setting up a fake company on a small island off the coast of the UK. It enabled them to sell DVDs for considerably less than any retailer based on the mainland. Eventually the government closed the loophole but it did great damage to many other businesses.
I don’t know what public opinion is in other countries, but here in the UK the great majority of the public are outraged by tax evasion. It’s routinely a big story here, and how our right wing government is so in bed with corporate interests that they have no interest in stopping tax evasion despite the damage it does to public services.
Hahahahahahahahahahahahah.
Dear IRS: Like Apple And Google, I’m Offshore For Taxes [by Forbes]
http://www.forbes.com/sites/robertwood/2016/02/22/dear-irs-like-apple-and-google-im-offshore-for-taxes/#3ad4139424c6
WOZ for President!
The US Tax Laws are really screwed up. YMMV
I can ONLY IMAGINE Jobs and Wozniak ‘discussing’ fundamental ideas, and beliefs. It’s AMAZING two men that seem so polarized in character attributes started what has become our long-cherished APPLE (Computer Company) Inc.!!! Simply AMAZING!!! [In some other Pro-2A state, the outcome might have been different TIC}
I respect Woz for his engineering. However Woz would be hard pressed to make Apple (or any company) succeed on 50% tax. Companies are taxed based on profits… not revenues. They have (usually) a number of other obligations (like at source deductions to name only 1) that they need to handle. They also have to invest in training (a requirement here in Quebec), R&D, etc etc etc, on top of that, investors are expecting dividends from their investments. At a 50% tax rate, companies would crumble under the weight, incapable of handling the demands.
However, I will say this. Taxes must be paid. Finding elaborate schemes to find ways to pay 6% tax when you really should be paying 20% is where it hurts. The Panama Papers are showing us how widespread it is and who uses the schemes (corporations, drug lords, state leaders, prominent sport people…etc). I think what Woz really means may be that everyone should pay their fair share. 20% for a corporation may not seem a lot but 20% off of $30B profit amounts to a lot of money that would go into the (local) economy and help raise the bar for the collective (leaving the world a better place than we took it…right Apple?).
ah, theft is theft :)
Clearly Steve Wozniak has the salty spot for Apple, even after all these years. Is he right to do so maybe? It’s seem after Steve Jobs (RIP) passing Wozniak won’t shut up. His opinions of Apple have lost credibility over the years. He always upset about anything Apple does.
What is wrong with this guy ? You are no more with Apple so go and pick on Google and others. Deciding on Tax rate is a government job not yours.
Uh? We are the people and we can comment on that. We make the State, not the other way round.
Here’s the problem: there’s no such thing as a tax on businesses. Ultimately, any tax on a business is going to trickle down to their customers or employees, because businesses are entities that are designed purely to build profit. If you cut into that profit, the net effect of that is either going to be for that business to increase its income (by raising prices or trying to drive up its stock value artificially) or to decrease its outgo (by limiting the money it spends – typically starting with employees).
So what Woz is actually asking for isn’t a tax on Apple – it’s a tax on their customers.
Facepalm. Anything that generates more profit generates more tax. To pay less tax you need to show less profit, regardless of income (income is not profit). A 100% tax on profit would still leave Apple without having to lay off employees and with whatever R&D budget they want – those line items are EXPENSES and are deducted from income prior to the calculation of taxable profit.
That said, no corporate entity nor individual should ever have to pay a penny more than 20%. And individuals need to be allowed many more deductions than they’re able to apply currently.
The situation in the US and many other countries is untenable not because corporations are lowering their tax exposure (not avoiding!) but because the government(s) are burning and wasting money as if it were free. Probably because to them, it *IS* free.
Look recently at the supposed sum the FBI paid to unlock that iPhone – over US$1million of taxpayer dollars. I see a lot of complaints about the salaries of civil servants compared to CEOs, but apart from salaries, look at all the waste. A civil servant making $100k may still burn a few million tax dollars at the end of the year.
How much did the US spend last year on defence and military offence? That’s the sound of your money going down the toilet.
The US definitely has a spending and taxation problem (IMO more of the former and less of the latter).
If it were any other entity doing so with that kind of cash, people would be protesting in the streets, total outrage. But because it’s government, and we get our brains pounded in since birth about how godlike authority is, they get endless amnesty and near-apathy.
The problem with this thinking is that people think corporations will pay taxes out of the goodness of their hearts. In reality corporations pay no taxes whatsoever. It is the consumers who ultimately pay corporate taxes. Corporations simply pass the cost of taxation onto the consumer, a form of indirect taxation that steals more of consumers’ ever shrinking incomes.
Ah, but it isn’t the corporations that do the stealing in the first place; it’s an entity that wastes 1000% more income than your average corporation, big or small, yet produces little or nothing in the marketplace, and also claims the power to kidnap, detain, and possibly take your life if you don’t play by the rules. I think I’ll side with the corporations and the customers.
If Woz is so inept financially that his effective tax rate is 50% he has no business advising anyone about anything.
He’s probably counting the money he spends at McDonald’s as tax.
Ah, corporations. To quote Mitt Romney “Corporations are people too!” Except when it comes to taxes or that whole death penalty thing when they are caught deliberately killing people (tobacco industry, auto industry for starters). Then they’re just special.
I really wish Wozniak would STFU. Nothing he has said in the last 10 years has been useful. This guy invented the technology that started Apple, but since then, he has pretty much contributed nothing to the technology industry. His naive pronouncement about taxes is just ignorant. Businesses and individuals should be able to keep most of what they earn. Period. Enough of this class warfare rich vs. poor B.S.! Taxes should be fair, and everyone should be paying them no matter how much income they bring in. We should not be punishing success with higher taxes.
We should just punish being alive with regular tax.
Oh SHUT UP WazniFAT!
Wrong!!! NOBODY should be paying 50% taxes. If you want to empty your pockets for the IRS, go ahead, but stay out of mine.
Without all the snark, let’s look at the idea. The US Supreme Court says corporations are people.
So, the distinction between corporate taxes and individual taxes is an artificial construct.
Perhaps if corporations paid taxes that were fair and transparent in their role as people we could adjust the entire tax rate to be equitable to all citizens.
Woz is correct. But the 50% should be adjusted downward. And it coulee be if those people like Big Oil, Big Pharma, Big Tech et. Al. Would pay their fair share.
Perl-lease. Somebody clean that bit of porridge from the corner of Woz’ mouth. I’m gonna throw up! I saw it on breakfast news this morning and almost brought up my porridge.
OMG! I really am getting tired of Woz running his mouth. Let me explain what happens if Apple were forced to pay 50% tax. First and foremost, they react in order to save their share price, sales, and drive a profit, because that’s what businesses do! First they move more and more of their business overseas. Secondly, they would need to raise the prices of their products in order to compete. Consumers either now pay more for their products (which is basically just a tax being passed on to us) or they buy a different product from a different manufacturer (who is overseas and doesn’t have the tax burden). This in turn makes Apple less profitable and lower the taxes that are paid as a result. So basically the 50% tax that you imposed on them, now generates similar tax revenue to the prior rate because their company becomes less profitable. Furthermore, the consumer who buys their products now has less money.
There are too many damn millennials and apparently “out of touch” old Apple executives that think that taxes are some disconnected aspect of their lives and that the wealthy and corporations can just be taxed again and again at obscene rates and it will never come back to bite them. I have news for all of them. They are not disconnected from the system. When the wealthy get taxed too heavily and they are fed up, they leave, and they take their money (and tax revenue with them). When corporations find that the tax environment is too hostile to them, they leave as well, and they take the jobs with them. Too many 20 somethings running around saying “the government will pay for it” not knowing what that even means. YOU ARE THE GOVERNMENT. YOU ARE THE TAXPAYER. NOTHING IS FREE! Go put your “Birdie 2016” sticker on your hoodie and go back to your econ class taught by your socialist tenured professor. It will all be fine, the rich people and evil corporations will take care of it. Go follow the lead of a socialist who is going to add another $18T to an already out of control debt. I’m sure everything will be fine.
Off my soapbox now. Goodbye sweet America.
I find it hard to believe that he pays 50% tax.
“He said he doesn’t like the distinction of different rules between corporations and individuals.”
While I agree apple should pay more, I definitely don’t like the sound of this.
comparing the netherlands to the USA is just wrong on so many levels. it’s like comparing apples and oranges, no pun intended. we have plenty of tax revenues. we waste money through corruption and being policeman of the world. i.e. if netherlands gets invaded, who do you think defends her? US does.
Corporations do not pay income tax. They write the check, but the money comes from somewhere else: it comes from the customers who pay the corporation for their product or service. Raising taxes on Apple will raise prices in the stores where Apple products and services are sold, because they don’t have a magic source of money they can earmark for tax obligations. No corporation does. They collect the money from customers.
Interesting……the max tax rate is 39.6%. Unless he is referring to a combined state, federal and local rate.
Shut up Woz. It is really hard to believe sometime you were one of the founders.
Obama and Bernie paid less than 20% tax rate.
I guess they’re a couple hypocrites.
This tax plan…this one…
PERSONAL INCOME TAX – SINGLE RATE: 10%
Create a simple, single-rate flat tax for individuals. The existing seven different rates of individual income tax will become one low rate: 10%.
• A family of four will pay no taxes on their first $36,000 of income.
• Exempt a large amount of initial income for low- and middle-income taxpayers, with a $10,000 standard deduction and $4,000 personal exemption. Keep the Child Tax Credit and expand and modernize the Earned Income Tax Credit.
• Keep the charitable giving deduction and home mortgage interest deduction, capped at principal value of $500,000.
BUSINESS FLAT TAX – SINGLE RATE: 16%
The corporate income tax along with the payroll tax are abolished, replaced by a 16% Business Flat Tax.
• The current corporate tax code is riddled with years of accumulated loopholes and special favors, burdening U.S. businesses with the highest top tax rate among the advanced nations. This convoluted and anti-competitive structure will be replaced with a simple 16% tax on net business sales (gross sales minus expenses and capital expenditures).
• The current payroll tax discourages work and job creation. The vast majority of Americans pay more in payroll tax than in income tax. This will eliminate the payroll tax, boosting jobs and wages for working Americans, while guaranteeing funding for Social Security and Medicare.
UNIVERSAL SAVINGS ACCOUNTS (USA)
This tax plan creates Universal Savings Accounts (USA) allowing savings of up to $25,000 per year in tax-deferred dollars.
Savers can withdraw the funds at any time for any reason – whether it be for college tuition, a down payment on a home, or their son or daughter’s wedding.
RESULTS: GROWTH AND OPPORTUNITY – The Tax Foundation estimates that this plan will, over ten years, increase the size of the U.S. economy by 13.9% above what is currently projected, create an additional 4.86 million jobs, and boost wages by 12.2%. Every category of worker will see a double-digit increase in after-tax income.
OTHER TAXES ELIMINATED
• Death Tax.
• Overseas profits tax.
• The Alternative Minimum Tax.
• The Obamacare taxes.
BENEFITS FOR FAMILIES AND ENTERPRISE
• Abolishes the IRS as we know it, and ends the use of the tax code as a political weapon, with a simple tax code that is transparent and resistant to corruption.
• Eliminates the complexity that invites government mischief, corporate welfare, and cronyism so that public faith in the tax system’s fairness can be restored.
• Reduces tax evasion and makes sure all businesses pay their fair share at one flat rate.
• Defeats the army of lobbyists allied with politicians that now sneaks benefits into the tax laws for friends and punishments for foes. Instead of the government choosing winners and losers, individuals and businesses will be free to prosper on their own merit.
• Ends the injustice of cronyism and the hidden costs associated with it, which currently damage the nation’s competitiveness and stifle the wages of ordinary Americans. By breaking the Cartel, these costs will end too, and businesses will be free to thrive, hire, and grow.
• Establishes a simple rate for individuals and businesses that is highly visible, which deflects the tendency of politicians to raise tax rates.
Ignites Growth:
• Repeals the corporate income tax, with the highest top rate among developed nations, and stops driving jobs and business overseas. By replacing the corporate income tax with a Business Flat Tax, jobs and growth will return to American soil, and a chronic source of temptation to tinker with the tax code through corporate loopholes will be eliminated.
• Allows for full and immediate expensing of business equipment, which will remove the burdens imposed by the current system on heavy industry, mining, energy, farming, ranching, and manufacturing.
• Removes the current tax penalty on American businesses that earn profits abroad, encouraging those businesses to bring profits home. Businesses will flock to America rather than keep money abroad or move overseas to escape high tax rates – and jobs and growth will come home with them. Under this plan, U.S. businesses could return their overseas profits to American soil for a one-time 10 percent repatriation fee.
• Eliminates a current competitive disadvantage for American products through border adjustability: foreign imports will be subject to the Business Flat Tax and American exports will have the tax removed, giving U.S. businesses a level playing field.
Provides Opportunity for Everyone:
• Spares citizens from hundreds of wasted hours and expenses in tax compliance – Americans will instead be able to file their taxes on a postcard or a phone app.
• Ensures that low- and middle-income Americans have the opportunity to build their wealth and prosper by exempting the first $36,000 of income for a family of four.
• Allows for automation of compliance. Instead of having individuals report every detail about dividend or interest income, for example, banks, brokers, and financial institutions would simply withhold the tax.
• Eliminates the injustice and burdens of the Death Tax, the Alternative Minimum Tax, and the Obamacare taxes. Family farms and businesses can stay in the family.
• Enables Americans to save up to $25,000 annually tax-deferred in the Universal Savings Accounts (USA), allowing them to begin a nest-egg and secure their future and that of their children.
Yea no… Apple should have to pay the same as all other corps. However they all should be paying 50%.
They need to tax the hell out of all churches. Talk about a scam organization. They take money from people and acquire tons of property, all tax free.
Woz please stick to the programming side which you are good at. Things like this what made steve jobs mad and kicked your ass out of the company.
Apparently Wozniak doesn’t understand economics.
Probably not, but the degree to which some corporations stretch the tax laws to pay as little as possible…that isn’t hard to understand. And I think that is what he is speaking about. And at some point there needs to be some change, maybe not 50%….but more than the 24-25.5% they claim, and closer the 35 or a little more they should be paying.
“Apple has never been found to evade tax”? There is nothing illegal (I think it’s immoral depending on the degree) about avoiding taxes. Apple, with their structuring in Ireland is evading taxes, “never been found”….they will explain what they do and if you don’t think that is evading taxes….what would fall into your definition?
There is no 50% tax bracket in the US. Corporations pay, on average [excluding the likes of GE and others that receive a return and pay no taxes] an effective tax rate of 12.5%.
The highest Woz would pay, before deductions, and putting all of his money into stock market funds where he then pays zero taxes, and just draws from them directly, is 39%.
The fact he claims a level that is not in the IRS tax code to be a point of basic debate reveals how truly inept he was outside of his love for electronics.
Woz has no clue about taxes and corporations, that is why he is out.