President Barack Obama became the first president to address the annual technology and music festival, South by South West (SXSW), in Austin, Texas. Without mentioning the FBI’s battle with Apple over access to an encrypted i-Phone, his attempt at “healing the rift” between the tech industry and the government fell more than flat and he …
Tag: Apple
May 30 2013
Corporate Taxes: Getting a Bite of Apple
At a recent hearing before the Senate Permanent Subcommittee on Investigations, Apple CEO Tim Cooke testified how the company managed to evade paying billions in taxes using tax loopholes particularly and overseas subsidiaries, like Apple’s subsidiary in Ireland.
Apple’s massive cash hoard, and the danger of soaring corporate profits
by Steve Gentile, Up with Steve Kornacki
The major flaw of our recovery has not been the pace, although certainly it could have been much faster. Instead, the major flaw is distribution. The economy is growing, but corporations and the richest Americans are capturing the lion’s share of the proceeds from that growth. You’ve likely heard a lot about the one percent-in the first year of the recovery, they captured 93% of the income gains – but the story of America’s corporations is even more troubling.
We’ve seen systemic inequality in our country growing for decades, even before the latest financial crisis. Between 1979 and 2007, income for the top 1% grew by nearly 300%, while it grew by just 18% for the bottom quintile of earners. [..]
Apple argues that its off-shore profits should only be subject to off-shore taxes. As if those off-shore profits had nothing to do with America. Of course, they do. Apple may sell products across the world, but the company is based in America for a reason. Apple enjoys, indeed exploits, countless legal and economic benefits by operating in America, benefits Apple wouldn’t enjoy anywhere else: basic legal protections, a judiciary that safeguards and enforces the rule of law, an intellectual property regime that affords generous-in fact, overly broad-protections for new ideas and innovations, a world-class system of higher education, a (somewhat) open immigration policy, reliable security, an advanced infrastructure for business development, and countless other benefits from operating in a functional, developed society with a genuine social contract.
As Elizabeth Warren famously put it, “There is nobody in this country who got rich on his own.” In the same way, there is no company in this country that got rich on its own. Corporations like Apple are hampering the economy and corroding our political system by hoarding hundreds of billions of dollars in cash. They owe the American people back payments.
On her May 25 MSNBC show, Melissa Harris-Perry exams corporate money tactics and tax codes with guests Lawrence J. Korb, Senior Fellow at the Center for American Progress; Stephen Lerner, organizer of the Wall Street Accountability campaign; Pulitzer Prize-winning investigative journalist David Cay Johnston, author of The Fine Print: How Big Companies Use “Plain English” To Rob You Blind; and Yves Smith, the founder and creator of the blog Naked Capitalism.
May 26 2013
Sunday May 26, 2013: Up with Steve Kornacki Tweets
Today’s show was about immigration reform, Oklahoma disaster relief, Apple tax shelters, Apple, Congress, tax law, and corporate taxes. #Uppers is now.
Richard Kim is right. We have less $ bec of the Obama created sequester. People excusing it are also 2 blame. $ Lies hurt us all.#Uppers
— priceman (@therealpriceman) May 26, 2013
Wanna fight offsets? Don’t use “good offsets” argument. We need no offsets. We create $. Choice is what 2 do with it=wars or relief? #Uppers
— priceman (@therealpriceman) May 26, 2013
@therealpriceman are you planning onmaking it a habit? #uppers
— Greg Griffin (@GDGriffin) May 26, 2013
Jesse Helms was a despicable POS liar. #Uppers
— priceman (@therealpriceman) May 26, 2013
@therealpriceman all that being true, coincidence that he was consistently re-elected?
— James Overholt (@JamesOverholt) May 26, 2013
Imagine if (D)s spent their energy pressuring their Senators like the tea party did Orrin Hatch instead of making excuses 4 them? #Uppers
— priceman (@therealpriceman) May 26, 2013
@ebrew79 Reason there are so few=(D)s hate their base+their base has Stockholm syndrome=excuses all they do. Not all but most. #Uppers
— priceman (@therealpriceman) May 26, 2013
@therealpriceman Yeah, You’re probably right. The Clinton/Obama/Clinton triumverate is so appealing to them though.
— Eric Brewton (@ebrew79) May 26, 2013
“@therealpricemanto pass anything w <60 votes. Start a new war and attach. Sadly true. #Uppers“//& pick an existential enemy like #terror
— Jay P Jay(@BarockNoDrama) May 26, 2013
Senator Tom Coburn says we need to pay for it. We’re already paying because he is a Senator. Haven’t we suffered enough? Hasn’t OK? #Uppers
— priceman (@therealpriceman) May 26, 2013
The uncomfortable moment where I praised Chris Christie. He was right though. #Uppers
— priceman (@therealpriceman) May 26, 2013
“@therealpriceman Jesse Helms was a despicable POS liar. #Uppers” What does it say about US that he was a respected statesman?
— zz2aa82 (@zz2aa) May 26, 2013
@therealpriceman And a lot more of them has been written into the new immigration bill, Bill Gates made sure of that one. #uppers
— AnnaB (@azannaphx) May 26, 2013
“Dude, finding the right slaves is expensive!” – Apple CEOs on Apple tax avoidance system. #Uppers
— priceman (@therealpriceman) May 26, 2013
It’s the effective tax rate that matters. It’s not 35%. Total BS. #Uppers
— priceman (@therealpriceman) May 26, 2013
Stock repurchasing and dividends to shareholders are what come from low corporate taxes, not jobs. #Uppers
— priceman (@therealpriceman) May 26, 2013
Tax Men – Apple shar.es/ZRKRH via @sharethis John Stewart nailed it. #Fawining #Senators #Uppers
— priceman (@therealpriceman) May 26, 2013
You can’t leave this up to consumers. They can’t afford to shop their principles in this economy. You need to change trade/tax law. #Uppers
— priceman (@therealpriceman) May 26, 2013
@merylnyc Those standards need 2be written into trade law=relates. Instead corps are allowed2sue any gov that does that in 3rd world #Uppers
— priceman (@therealpriceman) May 26, 2013
Thank you for reading.
May 22 2013
Corporate Taxes = 0
In an email to The Huffington Post on Sunday, GE spokesman Seth Martin wrote that the company paid $3.2 billion in cash income taxes worldwide, including in the U.S., in 2012. In addition, he stated, GE paid more than $1 billion in other state, local and federal taxes.
“GE is one of the largest payers of corporate income taxes,” Martin wrote.
Still, GE and other hugely profitable U.S.-based companies like it have come under fire in recent years over their tax practices. Tax breaks given to corporations cost the U.S. government $180 billion per year, according to a recent report from the Government Accountability Office. In addition, companies are likely stashing $1.9 trillion overseas in an aim to avoid paying U.S. taxes on those profits, according to a March analysis by Bloomberg.
GE parks the most profits offshore of any company, Bloomberg found. Many companies including, Apple, Microsoft and Google allegedly employ this strategy of keeping money overseas to avoid paying U.S. taxes on those profits.
The real problem is that GE doesn’t pay its fair share of the US tax burden and, apparently, Apple gets away with a billion dollar tax dodge due to a loop hole in the tax laws. Tim Cooke, Apple’s CEO, appearing before Senate Permanent Subcommittee on Investigations defended funneling billions to off shore tax shelters. What didn’t get mentioned at the hearings were the billions that Apple saved using the “excess stock options” tax break. The loophole allows corporations to deduct compensation that they give to executives in the form of stock options as an expense, the same way they deduct cash compensation. The hitch: stock options don’t hurt the companies bottom line, unlike cash options.
“The only meaningful costs associated with this are that the more stock you issue, the more it dilutes the value of the stock that’s already held by shareholders,” Matthew Gardner the executive director of the Institute on Taxation and Economic Policy told The Huffington Post last month.
Apple took home $3.2 billion between 2010 and 2012 (pdf) thanks to this tax break — the most of any company, the report found. But it’s not the only company taking advantage of the loophole. Activists have criticized Facebook over its use of the executive stock option tax break in recent months after the social networking giant used it to wipe out its entire tax liability in 2012.
Though using the tax break has been rather common practice among technology companies, which tend to issue a higher percentage of their compensation in stock options, it’s becoming more common and lawmakers are slowly starting to take notice, Gardner said.
While the hearing focused on Apple’s offshore holdings, companies have stashed $1.9 trillion in offshore accounts to avoid paying US taxes.
Large U.S. companies boosted their offshore earnings by 15 percent last year to a record $1.9 trillion, avoiding hefty tax bills by keeping the profits abroad, according to a new report.
The overseas earnings stockpile has climbed by 70 percent over the past five years, said research firm Audit Analytics. Data in its report covers the Russell 3000 index of the largest U.S. corporations. [..]
Conglomerate General Electric Co , had the most indefinitely reinvested overseas earnings, at about $108 billion, while drugmaker Pfizer Inc was next with $73 billion, according to Audit Analytics.
Yeah, corporations not paying taxes is the problem.
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