Well well Liberal America, who loves Apple and their products so much, how do you justify this?
Apple Inc. (AAPL) has set up corporate structures that have allowed it to pay little or no corporate tax — in any country — on much of its overseas income, according to the findings of a U.S. Senate examination released Monday evening.
The unusual result is possible because the iPhone maker’s key foreign subsidiaries argue they are residents of nowhere, according to the investigator’ report, which will be discussed at a hearing Tuesday where Apple CEO Tim Cook will testify.
This is amusing, really.
What’s happened here is that Apple has created subsidiaries that have no tax home at all.
Effectively what is going on is that Apple has created corporate entities that have no “citizenship”; they are thus exempt from tax in any jurisdiction when it comes to those entities.
This is not technically illegal, but it is exactly the sort of scheming that our legal environment and tax environment has encouraged. Apple, incidentally, is nowhere near the only firm doing this but it happens to be one of, if not, the largest.
Tax avoidance is not illegal. Evasion is. But you, as a natural person, cannot declare yourself (or any part of yourself) a taxable citizen of nowhere.
But this is exactly what big corporations like Apple have done through legal machinations. It’s wrong, not because Apple is doing it but because you can’t.
It’s that simple folks.
This is what happens when you set up a tax code that is outageously complex and full of special privileges granted to certain organizations that lobby for those privileges that apply only to them. Corporations get their best return on investment by “lobbying” Congress, which really ought to be called bribery (or even blackmail), because effectively (although not “legally”) that’s exactly what it is.
You, as an ordinary citizen, get no such special treatment.
This isn’t limited to big multinational corporations and the Federal Government either. We have set up “enterprise zones” locally that are exempt or otherwise are privileged in tax status for certain “special” companies; this happens all the time when state and local governments lure manufacturers and other businesses to an area, always backed by the claim that they will “create jobs” and “help the economy.” What they actually do is shift the increased cost of government services that come with increased business and personal presence onto you while they pocket the difference.
This crap must stop.