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Apple's tax rate may be just 9.8%

Posted: , by Michael H.

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Apple's tax rate may be just 9.8%
In case you're new to the world of global businesses and shady corporate practices, it is quite common practice for global corporations to use every tax loophole on the books in order to minimize what it needs to pay. So, it shouldn't have been much of a surprise when the New York Times detailed that exact type of practice over the weekend. However, the NYT didn't give just any tale of corporate tax dodging, it told how Apple does it, because targeting Apple makes it a more interesting story than targeting overall corporate practices like this. 

The article details a number of ways that Apple has found to minimize its taxes. The report focuses on a subsidiary that Apple set up in Reno, Nevada, a company under the name of Braeburn Capital. Braeburn was set up in Nevada, because unlike California, that state has a corporate tax rate of zero, rather than the 8.84% rate in California. The company was created specifically to collect and invest Apple's profits, and therefore avoid the California taxes. 

The report goes on to talk about how Apple also uses lobbyists to shape tax laws on the federal level, but as we said to start this, that's nothing new. As we just saw, Google has spent more than Apple, Facebook and Microsoft combined in lobbying the government. What's interesting is the question of how much Apple ultimately pays in taxes. 

According to the NYT, Apple paid $3.3 billion on $34.2 billion last year. If this is true, it would represent a tax rate of just 9.8%. Of course, the numbers may not be accurate. Forbes contributor Tim Worstall says that those numbers represent two different tax years, and the actual tax rate that Apple paid last year should be around 18% which is much closer to the tax filings of Apple over the past few years, all of which show tax rates in the mid-20%. 

Not surprisingly, Apple has issued a comment on the issue in which it denies the accuracy of the report, but rather than giving the accurate info, Apple spun the story to talk about all of the taxes the company generates via sales and payroll taxes for its employees, which apparently make Apple one of "the top payers of U.S. income tax.” We'll have to wait and see what the tax filings actually say in order to verify anything. 

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posted on 30 Apr 2012, 21:57 9

1. networkdood (Posts: 6330; Member since: 31 Mar 2010)

Well, I am sure all companies of Apple's size do this. Today's business are more than willing to export jobs overseas, or avoid paying taxes, or come out with the same phone, year after year after year. At some point no one will be able to afford a smartphone, or they will be over drawing on credit cards or savings or other monetary sources to pay for a luxury item.....nevermind it is already happening.

posted on 01 May 2012, 07:18 4

19. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

It's not about making products affordable...wow where have you been. Apple, and other companies pay no pensions, health care, and low wages. Your jobs are being sent over seas, and one persons wage in America can fund 20 or more people do the math.

Apple, and other companies makes huge profits off the back of free low wages, and you in America don't see any benefit of labor savings through those lowered wages. iPhone cost 55.00 to make or there abouts.

Wow Americans are so duped, and misinformed!

These companies make products and figure out how to use loop holes, and relocation of headquarters to avoid paying taxes. Then they get duped misinformed idiots to cheer for them, while they cause you to pay more in taxes as you cheer them on.

These companies push the economy to the brink of failure, and then use inflation as a way to keep profits rolling in. Learn how the economy works.

posted on 01 May 2012, 13:03 1

60. networkdood (Posts: 6330; Member since: 31 Mar 2010)

Dude...basic economics - if good paying jobs leave the states, then people will not be able to afford certain goods. Good luck to everyone working in the low paying service industry....unless you can earn extra with tips :-)
Capitalism is good, but like any idea, if it is being 'overdone', it will collapse unto itself - ask the ROMAN EMPIRE.

posted on 02 May 2012, 08:13

122. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

If you surf the many post that I have made you will find that white collar as well as blue collar jobs were sent abroad. As far as basic economic go you don't have a clue how economics works in the U.S

Your one point about less money in circulation due to less jobs is correct. Capitalism being over done analogy is correct! Regardless the sending of jobs over seas is due to bonus's earned by increasing a companies stock performance. Hp's CEO mishandled Palm's acquisition, and was awarded 117 million dollars for this mishap

. He was fired and 10,000 jobs were cut and HP manufacturing was sent to China.
This has nothing to do with allowing consumers to benefit from lower cost products, and every thing to do with making their stock more attractive to investors.....wake up!

posted on 02 May 2012, 08:47

127. remixfa (Posts: 14255; Member since: 19 Dec 2008)

you keep holding on to that one example. villanize villanize! yea yea! im clueless because i refuse to villanize!
i dont get into the hypocricy of "obscene profits and pay". How the company chooses to run and pay is not mine or your business as long as they are within the bounds of the law. And I am talking specifically in America about that, where workers have rights.. not in places like China where workers are treated like slaves.
Obviously Palm and HP are not great examples of good capitalism, but in a free market you will have good and bad. You can not legislate morality. You will only create more problems. I love how people keep blaming the companies for playing the game, yet they are not the ones that set the rules. We are. We vote in the politicians that make the rules.
Those jobs were going overseas anyways. HP wasnt exactly having a banner time with or without the Palm buy out. Its just a great scapegoat. And you fell for it.

You do realize that the only reason a company exists is to make a profit right? Yet you keep complaining that the companies want to make a profit. Kind of hippocritical. If you set up a punative system like we have now, they will find ways around it, like shipping overseas. If you set up a rewarding system, they will find their way back. Its that simple. But you cant seem to grasp that. Please, call me more names and show me how right you are! lolol

posted on 02 May 2012, 08:57

128. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

The more you speak the more ignorant you show yourself to be. I posted a response that off shoring of jobs is not based on passing lower cost product to the consumer.

I backed this comment with a fact about why that statement is true. You come and attack in every post with stupid ignorant rants, and then you cry when I spank you with the truth. Go away "lil bwoy" and learn something. Then come back and make relevant meaningful post, and stop wasting my time posting ignorant stupid comments!

Companies exist to make a profit, but poor leadership, poor business decision help kill the company at employees expense time and time again. Hp did just this while also managing to kill their own stock. ROFL.

Hp is not a good example because it proves me right and you wrong! Wake up fool!

posted on 30 Apr 2012, 22:02 11

2. jaytai0106 (Posts: 1888; Member since: 30 Mar 2011)

Great... I paid more tax in percentage than Apple. What a great country we are living in...

posted on 01 May 2012, 21:15 1

97. Lucas777 (Posts: 2137; Member since: 06 Jan 2011)

dont blame apple-- they are just following the [very inconsistent] rules... i am sure most companies do this as america is very uneven in their tax rates... anyways having corporate taxes be high is what is killing the economy in france and england... it drives away sales is definitely not what america needs... i have no doubt that the tax system needs to be revised but corporate taxes should not be raised... i mean look at how much it benefited california who is almost bankrupt because of things like this

posted on 30 Apr 2012, 22:08 5

3. 14545 (Posts: 1598; Member since: 22 Nov 2011)

Honestly, income taxes, both corporate and personal, should be 0. As that is the way the constitution was set up. They laid forth the framework for excise taxes, imposts and duties. The 16th amendment should be repealed, and then this would be a non issue. Just make everyone, along the route of any supply chain, to charge sales tax. Revenue should only drop to 2002 levels. THEN CUT THE SIZE OF GOVERNMENT.

Last, I bet the sheeple will start chiming in saying that apple was only doing their "civic duty" to lower taxes for their shareholders. And yes, every business does this, but these are the same people that will crucify "Big Oil" for not paying enough in taxes even though their profit margins are only 1/7 of apples. Yeah, they made "Billions" on hundreds of billions in sales. So compare apples 50-70% profit margin to that of Exxon, which is like 8.8% IIRC. People just need to quit worrying about what everybody else pays and worry about changing the tax laws themselves.

posted on 30 Apr 2012, 22:42 3

5. cellphonator (Posts: 298; Member since: 29 Oct 2011)

I agree.

posted on 01 May 2012, 01:06

10. W.P._Android_in_that_Order (Posts: 208; Member since: 15 Feb 2012)

I agree as well.

posted on 01 May 2012, 02:18 3

11. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)

Sales tax is a regressive tax which means poor people will pay a much higher percentage of their income to sales tax.

posted on 01 May 2012, 06:05 4

15. JeffdaBeat (unregistered)

Taco50 is actually correct on this one. With a national sales tax, the poor and even the middle class will have a larger portion of their income taken away with a national sales tax than the rich. If I buy a gallon of milk and hypothetically paid $1 in taxes, but I only brought home $20 a week...I'd be paying far more than a person who made $50 a week and paid that same dollar.

And then it comes to where do we cut the size of Government? Do we take away assistance for the poor or the elderly? Or defense? It's easy to spout this off...but what are you going to do with the results when the poor are even poorer and can't afford to sustain themselves when you've charged them a flat sales tax?

posted on 01 May 2012, 06:49 4

16. remixfa (Posts: 14255; Member since: 19 Dec 2008)

taco is not right.

a national sales tax that gets rid of income taxes.. like the Fair Tax, DOES NOT tax the general necessities of life, which includes grocieries and cheap clothing. It is the OPPOSITE of regressive, because the poor truely pay zero as long as they only buy what they need. However, when you run out to buy an iphone, you pay the 23% sales tax on it. Guess what.. u dont need it. You want it. When a millionaire goes and buys a new house or boat, they pay 23% sales tax on it. And there is NO loop holes. There is no accountant to help dodge taxes.. its due at the time of payment. That 23% also represents getting rid of all the imbedded taxes that everyone pays right now, before sales tax. so while 23% sounds high. its not.. its about 1% or so more than we are paying right now. But again it takes the imbedded taxes OUT of the pretax price we currently see, so pricing will drop accordingly.. which means those poor are paying even LESS taxes than they do now.

It also brings in millions of new taxpayers by forcing all the income tax dodgers.. illegals, drug pushers, people living on dividends... back into the tax fold.

You only get taxed if you buy something that isnt a basic necessity. There isnt a more fair system out there.

posted on 01 May 2012, 07:22 3

20. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

Who decides whats necessary or not wake up! The game is that imports are higher than exports meaning we bring in more than we send out production wise. But, this is a smoke and mirror shell game.

Most of the products imported are made by American companies seeking to make profits off of cheap labor, and lower taxes by relocating to countries like Ireland. Check your phones just to see if this statement is true or not. They send manufacturing over seas to offset labor cost and TAXES. They then import these products as American made products assembled in China. This lowers tax collection revenues from exports because we now have become importers to cheat taxes.

What needs to be done to change this is TAX all companies that send manufacturing and jobs over seas as we tax foreign companies that come to America to sell products. Then give tax incentives to companies that stay in America creating jobs

Research this before saying this is false. Learn how the economy works then come at me because I have done my home work on this,

posted on 01 May 2012, 07:51 1

22. remixfa (Posts: 14255; Member since: 19 Dec 2008)

you want to punish people that run from taxes.. by finding new ways to tax them? you do realize that will only make things worse right?

The best solution is NO taxes. Consumption only taxes like the Fair Tax will not only help the poor more than the current system as well as force tax dodgers and illegals to pay too, but it will also erase ALL income taxes, including corporate taxes.. which will make us a tax haven instead of a tax hell like we currently are.

Companies run from us because we have the 2nd highest corporate tax rate in the world. They run to countries with much lower imbedded taxes. Instead of finding new ways to punish them with taxes, find ways to lower their tax burden so they bring jobs back to America.. which will bring more jobs.. which will give more people money.. which will increase tax income without actually increasing ANYONEs taxes.

You havent researched anything if you dont understand that.

posted on 01 May 2012, 08:23 1

32. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

You really are misinformed that second highest tax rate is a misnomer "son"! I believe that CNBC aired that we have moved into 1st place.

Regardless when the loop holes and deductions are applied the over all corporate tax rate in America is 25% ok This information was aired on CNBC. When it comes to money for R&D Exxon, and many other companies pay no taxes because of these loop holes.

Sending manufacturing overseas for lower wages and cheating on taxes by off shoring is not the way ok.. It's not about punishing through new ways of taxing its punishing for cheating the system by using other nations to hide from paying your fair share!

These companies relocate to pay less taxes and use the system to avoid paying their fair share through off shoring. If issues break out in those countries our troops funded by the taxes they avoid paying rescue their asses as well...wake up this is way deeper than the pages you and I are using to go back in fourth here.

posted on 01 May 2012, 08:29

34. remixfa (Posts: 14255; Member since: 19 Dec 2008)


that article? yes, thats new. So, now we are the highest taxed country in the world. And not only taxes, but regulations. Apple themselves has said that one of the benefits of NOT being in america is the lack of regulations. If they want to change over product lines they have to conform to all sorts of red tape, wait for government OKs and all sorts of crap.. where they dont have to do so over seas.

Your only helping my arguement, not yours. The answer isnt find new ways to punish them, the answer is to make a place where they WANT to come home.. and not only american companies, but other companies from around the world.. bring their jobs to US.

posted on 01 May 2012, 08:30 1

35. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

http://business.time.com/2012/04/02/were-1-u-s-off icially-has-the-top-corporate-tax-rate-or-not/


http://articles.baltimoresun.com/2012-02-07/news/b s-ed-schaller-20120207_1_tax-rate-corporate-tax-pa yroll-taxes

Read these article about who's paying what from Time magazine and other news entities and learn, You are so stupid you think that I am helping your argument Forrest Gump stupid is as stupid does. rofl

It helps my argument because we are not the highest corporate tax payers in the world when deductions and loop holes are taken advantage of fool. Exxon and GE pay no taxes where as in other countries they would be paying. Apple paid 9.8% wake up and read....R.I.F. ok

posted on 01 May 2012, 08:37

37. remixfa (Posts: 14255; Member since: 19 Dec 2008)

ooooh.. oh no. i learned. Kinda mirrors what I've already been saying about tax loop holes and politician influence eh?
Oh yea, who granted those tax loopholes for GE to pay zero? Obama under his "green initiatives".
Who gave Obama millions for his election campaign? GE.
See a pattern?

posted on 01 May 2012, 08:40

38. remixfa (Posts: 14255; Member since: 19 Dec 2008)

Also, just to point out.. the ONLY companies that get those massive tax breaks are large corperations.

Do you know which companies house the most jobs? Small businesses. Did you know that small business get a fraction of the breaks of those large corps and pay in a ton more taxes in % and over all revenue? Did you know most small corps are S corps which are when company taxes are paid through individual personal taxes? Did you know most "taxes on the rich" affect that group more than it ever affects any actual rich person?

BTW, did you know that everyone who makes over 34k this year is going to see a massive tax increase because the government considers them "rich", and is trying to let the Bush tax cuts expire again in a few months... which was a huge tax cut for those making 34k and up.

Quit reading an article and thinking thats good research. Try taking a few economics classes and get back to me.

posted on 01 May 2012, 08:47 1

41. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

you take economy classes that teach you to go along with the same bull that is out there. As far as your classes go you must be failing judging by your stupid post.

We are not debating who's creating jobs now are we. We could but that's another subject off of the topic we are addressing here....Lets stick with the topic shall we Mr going off in tangents without valid points to show how unintelligent we really are

posted on 01 May 2012, 18:46 1

86. 14545 (Posts: 1598; Member since: 22 Nov 2011)

I've taken Junior level econ courses in route to my BSME, just because it enjoy it. Anyway, you clearly have a complete misunderstanding of how economies of scale work. Or how a simple supply/demand graph works. If you increase costs for a company to do business, YOU DIRECTLY FORCE THOSE BUSINESSES TO MAKE DECISIONS TO ABANDON THE MANUFACTURING BASE HERE.

Just like with any good or service, you raise the price, you see a decease in demand. (with the exception of those rare times where demand is very inelastic. Like college textbooks.) I can point you in the direction of some good econ text books if you would like to enlighten yourself on how things work.

posted on 01 May 2012, 22:11 1

101. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

You fail to understand how capitalism works, trim the fat and pass the savings to the stock holder. Greed forces companies to send jobs overseas while they line their own pockets and those of stock holders by trying to make their stock prices go to the moon there by creating "BIG" bonus's . You need to pull your head out of your ass. Go watch the inside job to find leading college course economic professor misleading the public for profit.....greed in it's purest form!

Demand creates jobs and vice versa jobs create demand in a round about way when it comes to products being bought and sold! I have way better understanding than you think I just don't have my head shoved up my ass thinking that s**tty smell is someone else s s**t!

Junior level econ courses my arse you I have been selling product for over 25 years and can tell you quite a bit about supply and demand!



Offshoring (or Offshore Outsourcing) and Job Loss Among U.S. ...
File Format: PDF/Adobe Acrobat - Quick View
in manufacturing industries to jobs in professional and business services, administrative support .... However, sending abroad the jobs of blue-collar workers ... shareholders, raise stock prices through buy backs, and undertake more mergers ... trade deficit in 2010 created 1.4 million jobs overseas in 2010 and that many of

Seems like to me I have to hold class to all of the smart econ wannabe idiots rofl
You can't buck the federal report to congress about this now an you? This report supports all that I have said about sending jobs overseas for profit and nothing else!

posted on 01 May 2012, 22:33

103. remixfa (Posts: 14255; Member since: 19 Dec 2008)

you dont make half the point you think your making when you fill your rant with insults. For someone to be as "old and wise to the game" as you claim to be you sure act more like a mouthy teenager.

I managed a business for nearly 10 years.. built new and rebuilt failing stores... made the hard decisions to keep my P&L in the black during down times. I worked many 100+ weeks to make labor goals and such. I'm extremely versed in "the free market". What is your point? I know people in business that fall on both sides of the isle. Guess what.. most of the time those that are running small businesses side with those that promise to reduce tax burdens. Those costs get put into hiring/pay decisions, layoff decisions, passing costs to the customer to keep your head above water, figuring out how to stay competitive by reducing costs or going with cheaper suppliers.
The heavier the taxes, the harder the decisions are. Eventually the taxes are high enough that the decision to start laying off people and making the rest work harder for no extra pay becomes the only option. Who does that exactly benefit??
The bulk of US companies are not like Apple.. they are an anomole. Even the heavily villainized gas companies only make about 8-10% profit after all taxes and tarrifs, which is normal. Only a moron thinks they don't pay taxes. Do you know how much they have to pay in exploratory fees and regulations? They pay taxes out the ying yang. And going back to those hard decisions.. do you know who ULTIMATELY pays all those taxes? The consumer. Most costs are offset by giving them to the consumer whenever possible to reduce layoffs and benefit reductions. If you REALLY owned/ran a business for so long, you would know that.

Corporations by and large do not pay taxes directly out of their coffers. they offset as much cost to the consumer as possible while still staying competitive. If their competition is offsetting taxes, then they can too.. and its a back n forth until the bulk of taxes are offset in pricing to the consumer. So the more you raise corporate taxes, the more you raise taxes on consumers.

And as much as liberals want to villainize Oil companies, raising taxes on them is the most regressive tax around. When they offset those taxes on to energy prices, who really gets hurt? The poor. Its kinda hard to avoid buying energy.. for your car.. house, whatever.

Good intentions + lack of REAL education on the situation = bad outcome.

posted on 02 May 2012, 00:07 1

108. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

"you dont make half the point you think your making when you fill your rant with insults. For someone to be as "old and wise to the game" as you claim to be you sure act more like a mouthy teenager."

Go read most of your post where people disagree with you then lets talk. The pot calling the kettle black. This is directed at you because this is what you have done to me and others in the past. I am just giving you a taste of your own medicine.

If you can't get my point from the post I have made you are really clueless.

The point is that big profits and stock prices are the reasons corporations send jobs over seas, and the loop holes of off shoring profits, and opening head quarters over seas is just another way to avoid paying taxes. This has nothing to do with demand or any thing that you have posted. This is in this report by the government to congress itself. What else do you need to see you are wrong? The topic here is about paying fair share of taxes, and why these companies try to avoid paying their fair share, not about war on drugs, and demand of higher tax rates when in fact the effective tax rate is the lowest it has ever been.

Bruce Bartlett has served as an economic adviser in the White House, the Treasury Department and Congress.

Historically, the term “tax rate” has meant the average or effective tax rate — that is, taxes as a share of income. The broadest measure of the tax rate is total federal revenues divided by the gross domestic product.

By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950, according to the Office of Management and Budget

The above quote is from the New York Times just for you as fact not opinion!

http://economix.blogs.nytimes.com/2011/05/31/are-t axes-in-the-u-s-high-or-low/

http://forbes.house.gov/UploadedFiles/CRS_-_Offsho ring_and_Job_Loss_Among_U_S__Workers.pdf

I am not trying to villainize oil or any one else, but merely post the facts as I find them.

posted on 02 May 2012, 07:18

117. remixfa (Posts: 14255; Member since: 19 Dec 2008)

if your referring to taco, taco gets special treatment because he is nothing more than a lying and inconsequential troll. I feel i treat him pretty fairly considering he has been barking at my heels for nearly 4 years, is almost always wrong, completely vile, lies through his teeth.. and more. We have a very.. special.. history.

I dont remember any time where i threw double digit insults at you during a conversation. Nice try though. Less "taste of your own medicine" and more "you cant control yourself".

posted on 02 May 2012, 07:36

118. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

You have insulted me a few time Mr....whether you can remember it or not is irrelevant. You have insulted me here and on the Sprint Site. Most people that are as arrogant and as insulting as you never remember insulting others!

I can control myself, but you should look in the mirror.

posted on 02 May 2012, 08:09

121. remixfa (Posts: 14255; Member since: 19 Dec 2008)

on the sprint site? What are you talking about?

I generally only lob an insult if your completely off base and are demanding about it.. or acting like a tool already. I dont generally insult just to insult during a discussion because I dont agree, unlike what you have been doing here.

posted on 02 May 2012, 09:04

129. QWIKSTRIKE (Posts: 1142; Member since: 09 Mar 2010)

"I generally only lob an insult if your completely off base and are demanding about it.. or acting like a tool already."

You just gave what I said merit with this phrase genius!

Who are you that you think you are so damn self righteous that it is ok to insult people, and fail to be able to take what you dish out? I am doing just what you do on this site cry baby!

When living in a glass house don't be too "QWIK" to throw the 1st stone! rofl

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