Apple Defends Its Tax Practices
Apple is once again in the news for shuffling its cash hoard among various countries to minimize its tax burden. The company has released a sprawling statement defending its practices, stating that it not only follows all applicable laws, but is in fact the largest taxpayer in the world. However, Apple continues to call for international tax reform and simplification to help it repatriate its overseas funds. The reality is that many large businesses play legal shell games to minimize liabilities — fiscal and otherwise — and corporations squirreling away cash in low-tax countries is a side effect of globalism that’s difficult to prevent.
And if they didn't take advantage of every possible legal tax break, the stockholders would have their scalps!
Tim is in a "damned if you do, damned if you don't" situation.
They would? Is there some instance where a company *didn't* completely maximize its tax breaks and were held to account by stockholders? Especially one as profitable as Apple?
In discussions about Apple's tax evasion schemes, an argument often brought forth is that Apple's executives have no other choice than to use all loopholes available to them since if they didn't the stockholders would have grounds to sue them.
So how does that argument play out when Tim Cook goes on record saying about the new iPhone X "We're not trying to charge the highest price we could get or anything like that. We're just trying to price it for what we're delivering." ? Should in a free market system Apple not try to extract the maximum profit they believe they can make? Why should he not charge the absolute highest price he can to maximize profits? Should stockholders now sue him for that?
If the answer is no, I wonder if this notion that Apple is legally bound to exploit any tax loophole is just baloney.
Devil's advocate here. Do you pay sales tax to your state for every out of state purchase you make online? if not, your state (and its citizens) miss out on what benefits/projects that sales tax could pay for.
I don't approve of off-shore tax hiding. But it's legal and certainly generates income for those interested in maximizing their money. It doesn't benefit most people much unless you are in the league of Tim Cook & Company.
That said, understand corporations and their executives do everything to hide money away. Does it never occur to some people why executives own multiple residences and any number of other properties? Because if a corporation is sued, those properties can't be touched. They aren't part of the corporate holdings. All dissatisfied stockholders and the rest of us get is whatever money the court can find. And if it's squirreled away legally overseas, good luck.
The question is not morality. Laws don't deal with morality. Laws are enacted in response to morality of a particular society, but they do not determine it. And the world generally views any attempt by anyone to legally hold on to their money as a suitable way to live. It's only that most of us can't take advantage of tax shelters that rubs us the wrong way.
Again, I am no fan of corporations not paying their due. The problem is figuring out what their due should be.