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Apple: Corporate Tax Rates

Discussion in 'Sports and News' started by YankeeFan, Apr 30, 2012.

  1. YankeeFan

    YankeeFan Well-Known Member

    Briefly mentioned on the Mitt Romney thread, and their talking about it on MSNBC now with Grover Norquist:


    For high tech companies, selling products and services over the internet, this kind of corporate tax avoidance just becomes easier and easier. (Though, still a hassle.)

    GE files a 57,000 page tax return, and pays no taxes:

    Is it time to recognize the realities, and lower our corporate tax rates?
  2. Stitch

    Stitch Active Member

    Or we could pass laws eliminating loopholes. Just saying.
  3. Azrael

    Azrael Active Member

    Because 'zero' isn't low enough?
  4. Point of Order

    Point of Order Active Member

    GE paid 0%. Apple paid below 10%. Wal-Mart below 25%. And I paid an 28% effective tax rate.
  5. Double Down

    Double Down Well-Known Member

    Ok, ok, ok ... we can't make you pay less than zero. But what if we were to, say ... giiiiiiiiive you money? Would that be appealing to you?
  6. The Big Ragu

    The Big Ragu Moderator Staff Member

    We live in a global world. These are companies that operate globally, so they have a lot of leeway to park profits in different places around the world.

    Tax rates operate in a marketplace. Countries have been competing with each other to draw the tax base, by making their rates as low as possible. The U.S. is not very competitive, so we ace ourselves out of tax revenue. We have the highest corporate tax rates in the world. So companies take their profits and park them in places where their tax bill will be less.

    If we set our rates at 10 percent across the board, for example, and simplified the code, we'd see those companies that are currently paying zero to the U.S., pay something to the U.S. rather than to Ireland or Switzerland. It would make us competitive with countries that have lowered their rates to those levels to attract a tax base that can take itself anywhere.

    None of that will happen, of course, because our tax code is a piece meal mess of individual favors handed out on a one-by-one basis, and administered by a corrupt pack of hyenas.
  7. Azrael

    Azrael Active Member

    "First, Mr. President, we ask that you enrobe our corporate headquarters in 24-karat gold and Hershey's milk chocolate. Then we will happily read your tax proposal . . . if it is written out in eyeliner on a series of Chanel suits to be modeled in our conference room by Ms. Angelina Jolie."
  8. poindexter

    poindexter Well-Known Member

    If we set our rates at 10 percent across the board, for example, and simplified the code, we'd see those companies that are currently paying zero to the U.S., pay something to the U.S. rather than to Ireland or Switzerland.

    If GE can pay 0, why would they want to pay even 1%?
  9. LongTimeListener

    LongTimeListener Well-Known Member

    No we wouldn't. We'd see those companies extort Ireland or Switzerland into lower tax rates by threatening to move to Belarus or Hungary. And if they did move to Belarus or Hungary, a few years after that we'd see them move to other countries for lower tax rates. They will play countries off each other until the whole world gets down to a zero taxation rate, and then they will ask for cash incentives to set up shop there.

    Basically how companies play the states against each other right now.
  10. The Big Ragu

    The Big Ragu Moderator Staff Member

    That "extortion" is already going on. There is a marketplace for tax rates. And the equilibrium price has already been set. The lowest rates (effective tax rate) in the world are between 10 and 13 percent. Cisco or Apple or GE already have done the "threaten to to take their profits elsewhere" game. And that 10 to 13 percent rate appears to be the bottom market pricing for tax rates. A pretty competitive marketplace set the rate there.

    I'd suggest it is no more extortion, of course, than you are extorting a store when you comparison shop for the best price. There is a point, of course, at which no one can afford sell you that big screen TV for less money. There are costs, overhead, etc. and they need to have some margin for profit.

    There is also a point at which lowering corporate tax rates to attract global companies brings about such diminishing returns that countries can't go lower. We can either find that number and attract the tax revenue by setting our rates there, or we SHOULD expect that companies with global reach are going to comparison shop and go elsewhere.
  11. doctorquant

    doctorquant Well-Known Member

    Because it costs GE a shit-pile of money to pay 0% (BTW, income resulting from those legal bills gets taxed somewhere along the way, so it's not like Uncle Sam gets totally stiffed). Lower corporate rates and you change the cost-benefit calculus to the degree that the whatever-million-dollar tax-and-legal bill's not worth paying.
  12. The Big Ragu

    The Big Ragu Moderator Staff Member

    GE pays zero to the U.S. some years.

    It does pay some taxes elsewhere, even if it does employ more resources to reducing its global tax load than any company.

    GE has a network of subsidiaries in Ireland, for example, that it has gone to great expense to set up IN Ireland -- to keep the money away from the U.S. Ireland sees some tax revenue from GE that the U.S. doesn't.
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