The U.S. senate has called shenanigans on Apple’s clever tax strategy. While congress has been rather tolerant of other corporations who avoid taxes (such as GE), the senators have apparently decided to go after Apple.
In some ways, this situation is entertaining. After all, liberals who are against corporations are supposed to be all gooey about Apple, thus putting them into an emotional predicament. Also, conservatives who are supposed to not be fans of Apple’s alleged liberal leanings must be torn over going after a corporation on the issue of taxes. Someone more cynical than I might speculate that Apple’s main “crime” was failing to pay the most important tax of all, namely the congressional tax that is paid via lobbying.
The main attack on Apple is that the company was able to engage in some clever (or dubious) tactics that allowed them to avoid paying all the taxes that the company should have paid. Apple has pointed out that the company pays the most (billions) in taxes, but folks in the senate have claimed that Apple should still be paying more.
While I do have some concerns that the senate is unfairly singling out Apple while giving a free pass to companies that are infamous for not paying taxes, this situation does have some positive aspects to it. Perhaps most importantly, it is drawing attention to the dubious tactics employed by companies to avoid paying taxes. Of course, I suspect that little reform will come out of this in terms of the more outrageous offenders when it comes to dodging tax obligations.
Someone more cynical than I might note that the existing system is, in many ways, a protection racket run by congress. They create harsh tax laws and then allow tax breaks for those who pay the congress “tax.” Companies generally consider this an acceptable deal-the congress “tax” is still less than what they would have to pay if they were fully subject to the corporate tax rate set by congress. Naturally, it would be better if the tax laws were both fairer and simpler, but it seems unlikely that enough folks in Congress are willing to make such changes.
For federal income tax laws to be fair and just the federal income taxes on wage and salary earners would need to be abolished by repealing the 16th amendment. For any tax of any kind to be fair and just – on any person or corporation – we would have to require the tax never exceed 9.99% Income taxes of any kind would need to be flat to be fair and just. Progressive income taxes, by definition, are unfair and unjust.
T. J. Babson says
Warren Buffet = gave his money to the Gates Foundation to avoid paying taxes
John Kerry = parked his yacht in Rhode Island to avoid paying taxes in Mass.
Timothy Geithner = “forgot” to pay his social security taxes when he was self employed
Tom Daschle = cheated on his taxes in several ways, owing $140K
Charles Rangel = failed to report income from his rental property
What is particularly galling is that these same people criticize others (and accuse them of being “anti-government”) for not supporting higher taxes.
Apple fits in perfectly with this group.