Wednesday, May 29, 2013

One BAD Apple

The recent news that Apple has played the tax laws of Ireland versus the U.S. to effectively avoid paying any corporate tax on tens of billions of income might be the proverbial straw that breaks the camel’s back regarding finding a solution to offshore tax haven abuse. 

All the rest of us are essentially subsidizing all the government services that Apple is using.  Our roads and bridges, courts, public education, even our military defense.
So exactly how do we force multinational corporations to pay their fair share of U.S. taxes even if we can’t get other countries to join us in this effort?

Harold Meyerson addresses this issue in an opinion editorial in The Washington Post.  Here are some excerpts.
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The Washington Post
May 28, 3013
Apple’s U.S. revenue should be taxed

The open secret of many global corporations’ success — and occasionally, downfall — is to fall between the cracks. Apple, which is based in Cupertino, Calif., created an Irish subsidiary with no employees, into which it funneled roughly $30 billion between 2009 and 2012 on which neither Ireland nor the United States levied taxes.…

The legal evasion of corporate taxes by shifting income to low-tax climes isn’t only a U.S. problem. Low-tax trolling is on the agenda of the Group of Eight leaders’ meeting next month. But absent a global sovereign, there will always be countries with tax rates lower than their neighbors’ and companies seeking to take advantage of that disparity. Reducing the nominal tax rate on corporate profits in the United States to 25 percent, or 15 percent, from the current 35 percent won’t deter some future Apple from shifting profits to some future Ireland if the tax rate there is zero.
So, what to do? …taxing corporations on their revenue rather than their profits. If Apple gets 60 percent of its revenue from sales in the United States, Apple should pay U.S. taxes on that revenue. Let France collect taxes from Apple on its sales in France, China on its sales in China and so forth. Taking production and the location of corporate headquarters out of the equation would end the noxious practices of placing factories where the taxes are lowest and creating dummy subsidiaries to funnel profits through low-tax countries. Companies would still roam the globe in search of the cheapest labor, though a better Congress might one day seek to reward businesses for keeping and generating high-value-added jobs in the United States.…

Ultimately, what’s needed are global standards for taxes, labor and regulation. Until they exist, let’s do what we can to stop game-playing that benefits only the rich.

1 comment:

  1. However we got to this place where, greed is good, and paying taxes is for the little people its time to change the rules that allow off shore tax havens to begin with and that allow corporations to purchase politicians by making them dependent on corporate donations. For more interesting information click here.

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