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If you keep up with earnings reports and the like, or you're an Apple stockholder, you've probably heard by now about Apple's plan to buy back $60 billion in stock, and increase its dividend to shareholders that was announced in yesterday's quarterly earnings call.

One of the surprising parts of that call, to many people that follow Apple's business, is that rather than paying for the buyback out of their massive hoard of cash (of which $60 billion dollars represents less than half), that Apple will be issuing debt to pay for it for the first time in years.  Apple, historically, has been so against issuing and carrying debt that they did not have a credit rating on file with Standard and Poor, who had to issue a rating for the company shortly after the earnings call ended.  The rating, by the way, is AA+.

So why is this such a big deal?  Follow me below the fold, and I'll tell you.

Much of Apple's cash hoard comes from revenue/profit generated overseas, and therefore is untaxed by the US government until it's brought into the country.  Like most businesses that generate overseas revenue overseas, Apple's been hoping for, if not agitating for, a corporate tax amnesty bill so that they can repatriate those funds without paying a tax bill that could reach $28 billion.

That's right, $28,000,000,000.

So what does this half to do with a stock buyback and increased dividends, which when viewed on their own, are actually some of the better things a business can do when they move from growth to value stage?

The buyback will be financed with debt, which given Apple's massive cash hoard and AA+ credit rating, should be acquired at really low rates.  So Apple now has $60 billion (or however much debt they issue) that costs them 3% or less to acquire.  They'll then pay down that debt with the overseas cash, avoiding paying taxes on it, especially if the issuing firms issue the debt overseas and receive the debt payments through a foreign holding or subsidiary.

This means that Apple can avoid paying tax on this overseas cash hoard, while only paying a few percent in interest on it rather than paying 35% of it in tax to the US government, where it houses its headquarters and makes most of its revenue.  Apple gets the vast majority of it's overseas cash back into the US, and the US government gets zero thanks to creative accounting.

That's around $28,000,000,000 in tax revenue our government will never see.  That would pay down a lot of debt, or fund a lot of programs that our sequester chopped funding for.  And the only thing the media is reporting is how "Oh, Apple's earnings are falling" or "Investors will love the buyback and dividend plans!".  Not a work about the tax dodge.

I don't know what you all think, but the government sure could use those tax dollars right about now.

Update, 11:49am PDT:

Modified the title so that it stops distracting from the overall point of the diary -- that there's something seriously wrong with tax law when a company can dodge one of the largest tax bills in history by paying a financial institution a few percent to finance some debt.

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Comment Preferences

  •  Tip Jar (17+ / 0-)

    Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

    by The Technomancer on Wed Apr 24, 2013 at 10:17:16 AM PDT

  •  What Apple is doing is now routine and long legal. (10+ / 0-)

    Other countries don't have companies doing this as they don't try to tax profits made in other countries.  

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Wed Apr 24, 2013 at 10:28:57 AM PDT

    •  Never said it wasn't legal. (8+ / 0-)

      I am saying it's immoral, and that it's nothing more than legitimized money laundering and legitimized tax fraud.

      Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

      by The Technomancer on Wed Apr 24, 2013 at 10:37:47 AM PDT

      [ Parent ]

      •  No more immoral than a couple without kids buying (10+ / 0-)

        a house with a mortgage to get the tax deduction.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Wed Apr 24, 2013 at 10:43:43 AM PDT

        [ Parent ]

        •  There's a societal good... (9+ / 0-)

          ...in promoting home ownership, and in allowing people to set down roots in a community.

          I'm failing to see the societal good in allowing companies that use our infrastructure and our resources to do so at a massively discounted (or in many cases, a nonexistent) tax rate.

          I own Apple products.  I like the company.  I have friends that work for corporate in Cupertino.  But sometimes, being a friend means calling bullshit on them when they're bullshitting.

          Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

          by The Technomancer on Wed Apr 24, 2013 at 10:47:14 AM PDT

          [ Parent ]

        •  This isn't immoral (2+ / 0-)
          Recommended by:
          stunzeed, RainyDay

          What's immoral is Bain buying companies and letting them go bankrupt. This is legally stealing money from the company's creditors.

          What's immoral is being the president of a start-up, and buying and selling shell companies so that all of your early employees are now holding worthless stock in shell corporations, while you hold all the valuable stock yourself.

          What's immoral is oil companies paying "scientists" to do "scientific studies" showing that global warming doesn't exist, so that you can continue to make money while destroying the environment.

          What's immoral is knowing that your products are being made by Bangladeshi or Chinese workers in extremely unsafe factories and not doing anything about it.

          On a scale of 0 to 10 in immorality, all the above should be scored very high, while taking advantage of legal tax dodges to avoid paying the government can't be worse than 1 or 2.

      •  There's nothing immoral about structuring (9+ / 0-)

        your business so as to pay the least amount of taxes you are legally obligated to pay.  That's why taxpayers are supposed to do -- pay only what they legally have to pay, and no more.  

        Tell me that you don't take all the deductions (including the standard deduction) available to you, and then you can berate another taxpayer for not paying more than it legally has to.  

        If you don't like what the tax laws let Apple -- or other companies -- do, then your complaint is with people who write the tax laws (and the people who vote them into office).  There's nothing "immoral" about a taxpayer who takes advantage of the financial incentives written into the tax law.

        •  Ethics and morality... (2+ / 0-)
          Recommended by:
          Mogolori, terabytes

          ...is not what you're legally obligated to do.  It's doing what you should be doing.

          In addition, given that Apple is one of the companies that has publicly groused about the US corporate tax rate, it rings a little hollow to then watch them then dodge taxation this country needs.

          Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

          by The Technomancer on Wed Apr 24, 2013 at 11:14:18 AM PDT

          [ Parent ]

          •  That's just silly. Absurd. (9+ / 0-)

            It's ridiculous to say that ANY taxpayer should pay more in taxes than they legally are obligated to pay.   Nobody "should" pay more in taxes than the law says they have to.  Not you, not me, not the neighborhood bar, not Apple.  

            Tax law is not about paying some amount that somebody else thinks is "moral" or "ethical."  You, or I, don't get to decide how much somebody else "should" pay if they want to be "moral" or "ethical."  Paying taxes is about complying with the law, nothing more and nothing less. There's nothing "immoral" or "unethical" about paying what the law says you have to pay.  And there's nothing "immoral" or "unethical" about taking a deduction that the law says you are entitled to take.  

            In fact, if anything, it would be unethical for the officers of Apple to have the company pay more in taxes than they legally owe.  After all, they have a fiduciary duty to the owners of that company -- the shareholders -- to maximize the return on shareholder investment.  Any officer of a company who said, well, we can legally structure our business according to method "A," but if we do method "B," we'll owe billions more in taxes, so let's do method "B" -- that officer would be violating his/her fiduciary duty to the shareholders.  That's not only unethical, he/she can get sued for that.  

            •  Fiduciary duty to shareholders (1+ / 0-)
              Recommended by:
              sturunner

              is not at the top of the morality pyramid.  At least not as expounded in the religious and non-religious ethical arguments I'm familiar with.

              "And now we know that government by organized money is just as dangerous as government by organized mob." -- FDR

              by Mogolori on Wed Apr 24, 2013 at 11:38:22 AM PDT

              [ Parent ]

              •  Taxes have nothing to do with morality. (5+ / 0-)
                Recommended by:
                cfm, johnny wurster, erush1345, VClib, nextstep

                Taxes are all about legality -- nothing more.  

                Technomancer said "moral" and "ethical."  "Morality" plays no role in taxes, unless you violate the law. Then, violating the law is "immoral."  As for ethics, there's nothing unethical about paying the least amount of taxes you are legally obligated to pay.  In fact, it's probably unethical -- i.e., a violation of your fiduciary duty to shareholders -- to pay MORE in taxes than the company legally owes.

              •  Mogolori - but it is at the top of the fiduciary (0+ / 0-)

                duty pyramid to the owners of the business, the shareholders. The officers and directors of Apple have a duty to minimize the payment of taxes worldwide. It the officers and directors of Apple are not committed to that goal they will resign or be terminated.

                "let's talk about that"

                by VClib on Wed Apr 24, 2013 at 08:59:38 PM PDT

                [ Parent ]

            •  Get real, coffeetalk! (2+ / 0-)
              Recommended by:
              terabytes, sturunner

              Who wrote the tax rules with all these exploitable, corporate loopholes??? Oh, right, the congress critters that are bought lock, stock and barrel with corporate money.

              What about the climate cliff?

              by wayoutinthestix on Wed Apr 24, 2013 at 07:09:54 PM PDT

              [ Parent ]

          •  As an Apple shareholder, I think Apple should be (0+ / 0-)

            increasing its dividend and supporting its stock. I would argue that this is at least as much a societal good as giving extra dough to a government that spends upwards of a trillion dollars on war, spying and imprisoning people without trial. When the government gets its house in order on that front, maybe helping it out with laudable donations would be apropos. Until then...

            For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

            by Anne Elk on Wed Apr 24, 2013 at 01:07:41 PM PDT

            [ Parent ]

            •  I don't understand this argument. (1+ / 0-)
              Recommended by:
              sturunner

              Because it's legal (and because it benefits you directly as a shareholder), it's cool if Apple dodges the Tax Man.  It's a societal good for Apple to not pay its fair share of taxes.  But because the US government doesn't spend 100% of the revenue it brings in in the wisest manner -- never mind that the manner is completely OK under the law, which is the same standard you hold Apple to -- it doesn't deserve to be funded.  Heck, you also referred to taxes as "laudable donations".

              Why the double standard?

              Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

              by The Technomancer on Wed Apr 24, 2013 at 01:16:59 PM PDT

              [ Parent ]

              •  Double standards is what you subscribe to, (0+ / 0-)

                not me. You don't like Corporations very much; that's pretty clear. And you don't like it when a public Company deftly avoids paying more tax than is required. The US government isn't "unwise"; it's pretty much a force for evil. It's pretty corrupt. It doesn't spend money for the good of the people. So I would rather not feed a monster like that. The government, if it merely stopped pouring money into the pockets of defense contractors, agribusiness, and hedge fund managers, would easily have enough money to fund its operations. So I have to wonder: why the double standard? Why is the problem not a voracious and corrupt government rather than a publicly traded Company trying to serve the interests of its shareholders who after all a just ordinary people like myself?

                For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

                by Anne Elk on Wed Apr 24, 2013 at 01:25:14 PM PDT

                [ Parent ]

                •  I don't have a problem with corporations. (1+ / 0-)
                  Recommended by:
                  sturunner

                  I get paid a comfortable salary by one.  I've worked for quite a few in my career.  I plan to start my own someday.  I don't plan on setting up a Double Irish, nor will I be fearful of having shareholders sue me because I didn't.  I even work in the tech industry, which is where a large numbers of tax dodges like this occur.

                  I pay my fair share in taxes.  Corporations should as well.

                  Like you, I don't agree with how the government spends every single dollar it receives.  But you're making the argument that because it's not 100% perfect, that it shouldn't get funded at all.  I'm not the one that's stated that what Apple has done is A-OK because it is legal.  I've never stated that I'm in favor of legal abuses of rights like our government has done.

                  You, however, are in favor of one entity doing something immoral under the law (likely because you personally benefit from it), and against another entity doing things that are legal under the same set of laws.

                  Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

                  by The Technomancer on Wed Apr 24, 2013 at 01:36:57 PM PDT

                  [ Parent ]

          •  The Tech - there is no what you should be doing (0+ / 0-)

            unless it is that Apple should be paying the lowest possible amount of taxes on a worldwide basis. That is what the officers and directors of Apple are legally obligated to do.

            "let's talk about that"

            by VClib on Wed Apr 24, 2013 at 09:01:30 PM PDT

            [ Parent ]

      •  The immorality isn't Apple's (1+ / 0-)
        Recommended by:
        Wednesday Bizzare

        Corporations just obey the law.  If they don't get caught.  But they also spend millions to wine and dine and lobby congress to get the laws they want, so they can say, "I'm just following the law."  

        The immorality is in the lobbying and the eager role congress plays, giving them whatever they want.  US democracy is done for; the power of government is for sale to anyone that wants to pay to play.

        I'm still mad about Nixon.

        by J Orygun on Wed Apr 24, 2013 at 12:33:04 PM PDT

        [ Parent ]

      •  The Tech - it's not immoral (0+ / 0-)

        No one has ever written with more eloquence about the immorality of taxes than the famed Judge Learned Hand, one of the most quoted federal court appellate jurists of all time.

        "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."

        There is no issue of morality or ethics in paying taxes. Everyone owes what the law requires and not a penny more.

        "let's talk about that"

        by VClib on Wed Apr 24, 2013 at 09:10:25 PM PDT

        [ Parent ]

  •  GM still winner for largest Tax Dodge $45Billion (6+ / 0-)

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Wed Apr 24, 2013 at 10:31:21 AM PDT

  •  Pretty standard, and smart (6+ / 0-)

    and just goes to show the nonsense of the argument that our corporate tax structure is overbearing.

    This is a feature, not a bug.

    "Small Businesses Don't Build Levees" - Melissa Harris Perry

    by justmy2 on Wed Apr 24, 2013 at 10:37:26 AM PDT

  •  Well... sort of (2+ / 0-)
    Recommended by:
    The Technomancer, Odysseus

    You are spot on in your analysis.  Apple, as a company, has made the decision to pay 3% interest as opposed to 35% taxes.  Likely that 3% interest is a tax-deductible expense too.  

    However, the debt money will be used for stock buy back.  So the seller of the stock would see a capital gain from the sale.  Also the buyer of the debt will receive dividends.  We don't know where those investors are located so it's difficult to speculate whether or not they would pay taxes on the gains.  Point is there will be some tax received, just nowhere near 35% and not paid by Apple directly.

    I personally think stock buy backs are a stupid waste of capital a kin to basically lighting money on fire.  Cisco and Microsoft have been doing these tactics for years and it's had no affect on their stock price whatsoever.  To me, it's a pretty obvious sign that your company has lost the ability to innovate.  

    I'm not in favor of a tax repatriation holiday but go ahead and let companies do these complex maneuvers to get around the laws.  In the end, local US companies or foreign upstarts looking to invest will make the effort to win.

    •  Stock buybacks are not a waste of capital (6+ / 0-)

      if the company has far more capital than it can effectively use and the current market valuation of the stock is on the low to fair side.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Wed Apr 24, 2013 at 10:48:08 AM PDT

      [ Parent ]

      •  Disagree (0+ / 0-)

        Simple supply and demand.  If I take more of my stock off the market, that stock price should go up.  But in the case of Cisco and Microsoft, their stock prices have not moved for years even though the market as a whole has performed well.  So if buying up your stock is not increasing the stock price then you're essentially throwing it in the trash.  

        I can guarantee you that Apple's stock will not rise based on this stock buy back plan.  In fact, a few investment houses have cut their estimates on Apple moving forward meaning the announcement will likely cause the stock to drop.  Therefor, waste. of. money.

        •  From the corporate side... (5+ / 0-)
          Recommended by:
          Odysseus, nextstep, FG, erush1345, VClib

          ...a stock buyback represents the idea that the company feels their stock is undervalued, and with a P/E ratio in the single digits, it probably is.

          It also helps Apple compete for talent in Silicon Valley, as the stock option packages matter a lot more than raw salary to the engineers around here.

          Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

          by The Technomancer on Wed Apr 24, 2013 at 11:03:51 AM PDT

          [ Parent ]

        •  Cisco & Microsoft had extremely high P/Es (3+ / 0-)
          Recommended by:
          Odysseus, FG, erush1345

          and they were coming down after the tech bubble.  So you are looking at a balance of movements - some that move the price up and others that move down - the fact that the net movement was down does not mean the up movements did not have an impact.

          Stock buybacks when the stock had high valuations (such as when the P/E was greater than its organic growth rate) are mis-timed buybacks - consistent with my above comment.

          Companies that have large excessive cash frequently have the problem that management spends the cash by overpaying for bad acquisitions - which is far worse than a buyback that does not result in an increase of the stock price.

          The most important way to protect the environment is not to have more than one child.

          by nextstep on Wed Apr 24, 2013 at 11:12:25 AM PDT

          [ Parent ]

        •  It is true that in general stock buybacks (0+ / 0-)

          mean that the Company can't think of anything better to do with their money, and that may really be true in Apple's case. However, if you are a Company officer or Board member, you might appreciate some efforts to push up the value of your equity. It may be one reason why Warren Buffet opposes granting of stock options.

          For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

          by Anne Elk on Wed Apr 24, 2013 at 01:11:13 PM PDT

          [ Parent ]

          •  Anne - Buffet opposes stock options? (0+ / 0-)

            What I have read many times is that Buffet was one of the strongest advocates for having options show up in GAAP P&Ls as a compensation expense charged against current earnings. If you have a link to something that states that he opposes the granting of stock options to employees I'd like to read it.

            "let's talk about that"

            by VClib on Wed Apr 24, 2013 at 10:04:51 PM PDT

            [ Parent ]

    •  True. (1+ / 0-)
      Recommended by:
      Odysseus

      But many of the institutional and individual holders of the stock will be paying a capital gains rate far lower than the corporate tax rate.  Hell, if they bought the stock when it was flirting with $700 (or anywhere above the current price, for that matter), they'll be able to claim a capital loss and credit that against other gains.

      I'm fine with the actual idea behind a stock buyback, especially when it doesn't even represent half a company's cash hoard.  Apple's not gonna be buying anything that requires them to have 12 digits in the back, and if shareholders feel they can get better value investing that money in other companies, let them!

      Unless Apple's directors and management are taking the company in a radically different direction, however, I highly doubt that this is solely to return money to investors.  They can't do anything with it overseas since their capital expenditures are nearly all in the US, so they might as well return it and make the shareholders happy while leaving their US cash hoard relatively untouched.

      Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

      by The Technomancer on Wed Apr 24, 2013 at 10:52:28 AM PDT

      [ Parent ]

  •  Though entirely without expertise in the field (1+ / 0-)
    Recommended by:
    johnny wurster

    I would have to suppose that "The Largest Tax Dodge in History" would be an awfully high bar to meet.

    "The extinction of the human race will come from its inability to EMOTIONALLY comprehend the exponential function." -- Edward Teller

    by lgmcp on Wed Apr 24, 2013 at 11:03:06 AM PDT

    •  If it's not the largest, it's close (2+ / 0-)
      Recommended by:
      lgmcp, Odysseus

      I haven't done the research/math to adjust historical tax dodges for inflation, but we're dealing with a company, in a raw numbers sense, that fluctuation between being the largest and second largest company in the history of the world in terms of market capitalization and revenue.

      Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

      by The Technomancer on Wed Apr 24, 2013 at 11:09:30 AM PDT

      [ Parent ]

      •  so what you have (1+ / 0-)
        Recommended by:
        erush1345

        is an unsubstantiated attack against Apple, a charge you admit you made without researching to see if your contention is true or not.. Certainly, Apple is not the largest company in the world, nor is it the second.  A simple Google would show it is #19, with Exxon and Royal Dutch Shell as 1 and 2. It took me 10 seconds to refute your point, So why did you post this in the first place?

        "Whenever the people are well-informed, they can be trusted with their own government" T. Jefferson

        by azureblue on Wed Apr 24, 2013 at 11:30:32 AM PDT

        [ Parent ]

        •  Apple is #2... (0+ / 0-)

          ...in terms of market capitalization.  It trades off with Exxon-Mobil on a regular basis depending on how the stock price fluctuates.

          And you did nothing to actually refute the main point, which is that Apple will be dodging the tax bill by issuing debt rather than performing the buyback with cash on hand but held overseas.  Remember, Apple is currently one of the few public companies out there to hold zero debt.

          Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

          by The Technomancer on Wed Apr 24, 2013 at 11:34:23 AM PDT

          [ Parent ]

          •  no, I did not have to (1+ / 0-)
            Recommended by:
            erush1345

            some other poster here already did that, and tried to patiently explain to you that what Apple is doing with its profits is very unexceptional, but you retreated into a "it's immoral!" corner when faced with the facts.

            And now you parse your definition of largest company. I got mine from Forbes and I checked with Wiki, and they are right and you are wrong.

            What I see is someone who wants to play word games to slam a profitable and successful company for doing something all comparable international companies do, and which is, as other posters have told you, is clearly legal. See, you clearly ignore that Apple, which makes profits overseas, has no obligation to move money made from overseas sales of its hardware, software, etc., to America. In fact, some other countries consider that tax dodging. Apple is under no obligation to keep all of its money in one place, but, for sure, it's not putting it in the Bahamas..

            The company posted a profit of $9.5 billion on revenue of $43.6 billion in the first three months of this year, compared to a profit of $11.6 billion on $39.2 billion in the same quarter in 2012. This is what Wall street is gnashing its teeth about. oh no! Apple did not make a huge pile of money, only a big pile of money!

            While profits are down, sales are up: The number of iPhones sold in the quarter rose to 37.4 million from 35.1 million during the same quarter last year.The number of iPads sold surged to 19.5 million from 11.8 million a year earlier, the earnings figures showed.

            "Whenever the people are well-informed, they can be trusted with their own government" T. Jefferson

            by azureblue on Wed Apr 24, 2013 at 11:52:58 AM PDT

            [ Parent ]

            •  Here we go again... (1+ / 0-)
              Recommended by:
              KenBee

              1.  If we're not going to enforce any sort of corporate taxation, let's stop kidding ourselves that we'll do anything other than live in a low-revenue country.  Which programs do you feel should be cut so that Apple can legally dodge billions in taxes, and so other corporations can not pay these supposedly burdensome taxes they all bitch about?

              2. I modified the title so that it would stop distracting from the point.  It's still one of the largest tax dodges in history.

              3.  I never referred to Apple as the largest company out there, either in comments or in the diary.  I did say that they fluctuate between #1 and #2 in market capitalization (this is what "largest in terms of market capitalization" means, not any other definition you're dredging up from Forbes or Wikipedia) in response to you, which is absolutely 100% true.  I understand that it's difficult to stay on topic, but I have confidence that you'rean intelligent enough individual to do so.

              4.  In conclusion, what your response is saying is that you're A-OK with not just Apple, but any large corporation using arcane accounting loopholes to dodge a tax bill.  If you're just not happy that I'm attack Apple, they aren't the only ones doing it, so pretend I said Google or Microsoft or GM instead.  And they should do it because shareholder value is more important than funding the government.

              Sorry.  I just don't agree with that.

              Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

              by The Technomancer on Wed Apr 24, 2013 at 12:04:40 PM PDT

              [ Parent ]

      •  GM did $45Billion in 2010 - far above Apple case (2+ / 0-)
        Recommended by:
        lgmcp, erush1345

        See my comment above.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Wed Apr 24, 2013 at 11:33:28 AM PDT

        [ Parent ]

  •  Time for punitive taxes (2+ / 0-)
    Recommended by:
    ontheleftcoast, No Exit

    on the hoarders of wealth, both corporate and private individuals.

    "It is easier to fool people, than to convince them they've been fooled" - Mark Twain

    by Sarge in Seattle on Wed Apr 24, 2013 at 11:07:49 AM PDT

  •  It's all in the name... (6+ / 0-)

    If this was a diary about Microsoft pulling off this tax evasion the story would be on the top of the rec list for days. But Apple is not only allowed to do this but somehow cast as heros for doing it. It's wrong when any company uses these sort of tax loopholes to avoid paying for the country they benefit from being part of. It doesn't make a difference if it's GM, Boeing, Microsoft, or Apple. It hurts America, period.

    Sorry conservatives, but Occam's Razor isn't a beard trimmer for jihadists. What it means is I don't have to accept your crazy-assed theories as an alternative to reality.

    by ontheleftcoast on Wed Apr 24, 2013 at 11:23:00 AM PDT

    •  I hope that's not the case. (2+ / 0-)
      Recommended by:
      Mogolori, ontheleftcoast

      I mean, I like Apple products, I'm typing this on a MacBook Pro, I have an iPhone, iPad, and Apple TV, get my music from iTunes, etc.  I'm a fan of the company, but seriously, this kinda stuff is just wrong, and sometimes the best thing a friend can do for you is call bullshit on you when you deserve it.

      Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

      by The Technomancer on Wed Apr 24, 2013 at 11:29:41 AM PDT

      [ Parent ]

    •  No. It isn't wrong. And it wouldn't be wrong (1+ / 0-)
      Recommended by:
      erush1345

      for any Company as long as it is complying with the law, as has been emphasized by a number of comments here.

      For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

      by Anne Elk on Wed Apr 24, 2013 at 01:13:21 PM PDT

      [ Parent ]

      •  So... (1+ / 0-)
        Recommended by:
        ontheleftcoast

        ...which program shouldn't have it's sequestered funding restored, or should be cut further since Apple's paying nowhere near the tax rate they should be paying?

        It is wrong.  For Apple and any other company.

        Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

        by The Technomancer on Wed Apr 24, 2013 at 01:20:31 PM PDT

        [ Parent ]

        •  We disagree and will never agree. (1+ / 0-)
          Recommended by:
          erush1345

          You think it's wrong. I think it's fine. From a rough look at the comments here, I think I am in good company.

          The answer is to change the tax law rather to bleat on about morals.

          For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

          by Anne Elk on Wed Apr 24, 2013 at 01:27:38 PM PDT

          [ Parent ]

  •  Not defending Apple exactly, (1+ / 0-)
    Recommended by:
    stunzeed

    but the Company is just following the law. You want to change tax laws? Great. All for it. But you can't blame a Corporation for taking advantage of all legal means to minimize its tax bill, as do we all.

    That said, we clearly need major tax reform, and one key reform is to eliminate the 76,000 or so pages of the tax code and replace it with a much simpler and more efficient means of collecting taxes. The main reason, after all, that we have 50,000 lobbyist personnel in DC has a lot to do with specific loopholes in tax law.

    There are many good proposals for better revenue collection, such as a VAT, national sales tax, financial transactions tax, etc. Of course, with the "NO" party in power, we will be waiting a while.

    For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

    by Anne Elk on Wed Apr 24, 2013 at 11:41:28 AM PDT

    •  Wrongs done under the auspices of legality... (1+ / 0-)
      Recommended by:
      VeloDramatic

      ...are still wrongs.

      Trust me, I understand this perspective.  Between federal taxes, state taxes, sales taxes, payroll taxes, etc., I pay a crapload of taxes.  But I also hold the view that bitching about the amount of taxes I pay is akin to bitching about how successful I am, and generally an asshole thing to do.

      What I'm looking at here is a nation that has no new methods for generating tax revenue in the pipeline, and unable to generate revenue thanks to loopholes such as these.

      Apple is one of the most wildly successful companies in world history.  They also only paid a 9.8% tax rate in 2011.  On the overseas money, they paid 1.9%.  Our nation is getting cheated, whether it's legal or not, and to expect people and corporations to stop trying to pay their fair share when people say "Oh, that's totally cool, pay nowhere near the corporate tax rate, we still love you" rather than attempting to modify such behavior via shaming them is rather naive.

      Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

      by The Technomancer on Wed Apr 24, 2013 at 12:57:30 PM PDT

      [ Parent ]

      •  No. They aren't, (0+ / 0-)

        at least not in an objective sense. Wrong for you, certainly, and I would urge you to avoid claiming any deductions on your taxes. But Apple is doing the right thing for its shareholders to which it has a fiduciary duty. When the US government stops pouring tax revenue down ratholes like Afghanistan and stops killing people with drone strikes, and stops imprisoning people without trial for decades, then you can come back and talk to me about why anyone should ever send a penny more than they have to for this shitbox of a government.

        For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

        by Anne Elk on Wed Apr 24, 2013 at 01:17:42 PM PDT

        [ Parent ]

        •  You're woefully misusing the concept... (0+ / 0-)

          ...of fiduciary duty.  That binds the company to act in the interests of itself and its shareholders, but taxation is not part of this, lest every company that's not using a Double Irish setup is suddenly running afoul of the law.  Directors have a duty to the company, to not act in a matter which indicates a conflict of interest, and much act in good faith to return shareholder value.  The taxation regime is not a part of this legal concept -- no shareholder will win a suit claiming that a company could have paid less taxes and that not doing so is a breach of fiduciary duty.

          The non-sequitur about how the government spends its money is irrelevant -- if it's not those, it'll be something else you object to that justifies why the government should not receive the tax revenue it is entitled to.  Because obviously, rather than fixing the government, we should be...how could I put this...starving the beast, right?

          Any sufficiently advanced technology is indistinguishable from magic. -- Clarke's Third Law

          by The Technomancer on Wed Apr 24, 2013 at 01:28:46 PM PDT

          [ Parent ]

          •  The Tech - I agree that few shareholders (0+ / 0-)

            are sophisticated enough to make the case that the officers and directors violated their fiduciary duties by not employing the most sophisticated tax saving strategies. However, the officers and directors of Apple do have a fiduciary duty to minimize its payment of taxes worldwide. Between Apples internal tax counsel and outside tax experts the management and the board will be exposed to tax strategies that do indeed lower worldwide taxes. They have a fiduciary duty to listen, become more knowledgeable, and pursue those options which lower taxes without putting Apple at risk.

            "let's talk about that"

            by VClib on Wed Apr 24, 2013 at 10:11:25 PM PDT

            [ Parent ]

  •  So what we don't know. (0+ / 0-)

      Remember back several months ago - when APPL stock took a bid dip?  It wasn't a gradual slip, it was a one-off kind of drop.  Since then, the stock has drifted lower.   Now we are reading that they are going to buy back stock.  
        I don't own any of APPL - so I don't give a damn - but it is a curious number of events.  Price drops dramatically and then comes the stock buy-back.  
         800K worth $350M was sold in the last few minutes of the trading day (at approx 1557 - with closing bell @ 1600).
          It was later proposed that a single "rogue trader" from a Hedge fund is under investigation - sigh.

           Now everyone can continue with the pie fight.  

  •  I'm rather surprised (3+ / 0-)

    These diary comments generally read like they were written by the Chamber of Commerce. Perhaps it does have something to do with the fact it is Apple, cue the god light from the clouds and heavenly choir.

    I'm writing this on my MBP and about to head out for lunch iPhone in hand but all that's missing from this thread is someone to claim "corporations are people my friend"

    I liked the diary.

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