Before I ask my question let me say that I am a big fan of Apple. I've used their computers almost from the time they started selling them. I own several Apple computers, iPhones, iPads, even an iTouch. I've been an Apple shareholder for a long time and I've made a LOT of money on the investment. In fact, what I'm about to suggest might cost me personally. But yesterday's New York Times article surely should make people who defend current tax policy and even propose lower business taxes think a little bit.

Apple reported that it made almost $25 billon last year, but paid less than $2.5 billion in federal taxes, a 9.8% tax rate. I'd suggest that rate is probably lower than the tax rates paid by most of the people posting on this forum. I know it's a much lower rate than I paid last year, MUCH lower. It was also reported that Apple is joining with a number of other large corporations to fund a major lobbying effort to get Congress to pass a "tax repatriation holiday", a period when those companies doing a large proportion of their business outside the U.S. could bring their profits made overseas back into the U.S. without paying any taxes on them.

Let's briefly review how Apple does business. Almost without exception, not one Apple product is manufactured in the U.S. Almost all their products are produced in China. In fact, if you place an order for an Apple product thru their Apple Online Store, your order will be fulfilled directly from their distribution center in Shanghai. Other than Chinese citizens, no American will touch the product you order other than the FedEx employees who deliver it to your home. If you buy an Apple product at a brick-and-mortar Apple store, the products will be shipped there directly from China and only the Americans working in the store will be part of the supply chain.

Apple's profits doubled between 2010 and 2011. It as become the most valuable company in the world. Like most large multinational companies, Apple employs an army of tax lawyers figuring out ways wherein they can set up subsidiaries to do business in states or countries with low or no income taxes and then allocate income to those subs to minimize taxes. If you want to describe this activity as taking advantage of tax loopholes, that's exactly what it is. Many large corporations paid even lower tax rates than Apple in 2011; more than 30% of the Fortune 500 companies paid no federal income taxes at all last year. (Let's see, that's about half the individuals and 30% of our largest companies not paying any taxes to finance our government? That can't be right, can it? That would result in a big budget deficit, wouldn't it? Oh, I forgot...we have a big deficit!)

So when we hear the GOP mantra that changing tax policy other than further reducing corporate taxes will hurt job creation, it seems to raise the question which is the tag line on the frequently broadcast MSNBC political ad...

"Hurt the job creators? Really? Then where are the jobs?"

Is everyone in the U.S., individuals and businesses, paying their fair share in taxes? If there was ever an argument for a major change in tax policy, this is it.

How about this for a question....which tax change would have a more positive effect on the U.S. economy? Further reductions in corporate income tax rates, or a reduction in personal tax rates, even if corporate taxes were increased to make such change "revenue neutral"?

Wanna call that "income redistribution"? Go ahead. I'd call the current tax code arithmetic that doesn't add up.

great piece. All facts. Apple pays less a percentage than I do and creates zero jobs. Yet the republicans will counter with redistribution of wealth nonsense.

Originally Posted by waynet

great piece. All facts. Apple pays less a percentage than I do and creates zero jobs. Yet the republicans will counter with redistribution of wealth nonsense.

Do you think there's a reason Apple produces almost all it's products out of country? Liberals never learn.

Originally Posted by RichieLion

Do you think there's a reason Apple produces almost all it's products out of country? Liberals never learn.

Go ahead and give us the answers, Richie.

How about starting by answering the questions on the table, before you get into the political criticisms and overly general commentary?...

• Is the current income tax system fair? Should half the individuals in the U.S. pay no income tax? Should about 30% of our largest corporations pay no income taxes? Should the average corporate tax rate be less than the average personal tax rate?

• Would a reduction in personal income tax rates combined with an increase in corporate tax rates, with the objective of revenue neutrality, produce more jobs than further reductions in corporate taxes? (Increased corporate tax revenues might take the form of elimination of special tax benefits, deductions and loopholes and might even permit a reduction in the corporate rate.) Clearly, corporate earnings are dramatically on the upswing, but unemployment is still way too high. Shareholders like me are happy campers, with near record corporate earnings floating the stock market to record levels and permitting generous dividends. But what about the middle class, Richie? About 10% of them can't find a job. The profitable corporations are creating jobs, but not here in the U.S. So what change in tax policy might help them get to work?

I don't know what there is to "learn", Richie, other than that our current system of taxation is both unfair and doesn't produce sufficient revenue to even begin to justify and pay for services, benefits and entitlements provided by the federal government

But let's keep it simple. Just answer the questions. You can skip the quick, cutting, uninformative politically-driven replies.

So how are the Democrats in Congress and Obama administration encouraging job creation here at home, and how can we take them seriously about caring about jobs here.......when Obama appoints Jeffrey Immelt, GE C.E.O as his "Jobs Czar".......while GE has shipped almost all its production to foreign nations like China, and putting thousands out of work here??????

Light bulb factory closes; End of era for U.S. means more jobs overseas
Gallery

By Peter Whoriskey
Wednesday, September 8, 2010; 9:48 PM

WINCHESTER, VA. - The last major GE factory making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison's innovations in the 1870s.

The remaining 200 workers at the plant here will lose their jobs......"

Light bulb factory closes; End of era for U.S. means more jobs overseas

Great post Villages Kahuna.

Wonder what Mitt Romney would do with this kind of question? I am sure he will get to the Villages on his campaign circuits. Maybe someone from TOTV should find out what he would do with this kind of dilemma?

Originally Posted by Villages Kahuna

Go ahead and give us the answers, Richie.

How about starting by answering the questions on the table, before you get into the political criticisms and overly general commentary?...

• Is the current income tax system fair? Should half the individuals in the U.S. pay no income tax? Should about 30% of our largest corporations pay no income taxes? Should the average corporate tax rate be less than the average personal tax rate?

• Would a reduction in personal income tax rates combined with an increase in corporate tax rates, with the objective of revenue neutrality, produce more jobs than further reductions in corporate taxes? (Increased corporate tax revenues might take the form of elimination of special tax benefits, deductions and loopholes and might even permit a reduction in the corporate rate.) Clearly, corporate earnings are dramatically on the upswing, but unemployment is still way too high. Shareholders like me are happy campers, with near record corporate earnings floating the stock market to record levels and permitting generous dividends. But what about the middle class, Richie? About 10% of them can't find a job. The profitable corporations are creating jobs, but not here in the U.S. So what change in tax policy might help them get to work?

I don't know what there is to "learn", Richie, other than that our current system of taxation is both unfair and doesn't produce sufficient revenue to even begin to justify and pay for services, benefits and entitlements provided by the federal government

But let's keep it simple. Just answer the questions. You can skip the quick, cutting, uninformative politically-driven replies.

Originally Posted by Villages Kahuna

Go ahead and give us the answers, Richie.

How about starting by answering the questions on the table, before you get into the political criticisms and overly general commentary?...

• Is the current income tax system fair? Should half the individuals in the U.S. pay no income tax? Should about 30% of our largest corporations pay no income taxes? Should the average corporate tax rate be less than the average personal tax rate?

• Would a reduction in personal income tax rates combined with an increase in corporate tax rates, with the objective of revenue neutrality, produce more jobs than further reductions in corporate taxes? (Increased corporate tax revenues might take the form of elimination of special tax benefits, deductions and loopholes and might even permit a reduction in the corporate rate.) Clearly, corporate earnings are dramatically on the upswing, but unemployment is still way too high. Shareholders like me are happy campers, with near record corporate earnings floating the stock market to record levels and permitting generous dividends. But what about the middle class, Richie? About 10% of them can't find a job. The profitable corporations are creating jobs, but not here in the U.S. So what change in tax policy might help them get to work?

I don't know what there is to "learn", Richie, other than that our current system of taxation is both unfair and doesn't produce sufficient revenue to even begin to justify and pay for services, benefits and entitlements provided by the federal government

But let's keep it simple. Just answer the questions. You can skip the quick, cutting, uninformative politically-driven replies.

vk - good questions - don't have the answers - but it makes me wonder what obama and his administration has done or is doing to correct the imperfections of our tax policy and lack of revenue production! are there answers to that dilemma? i tend to agree with the bobbleheads who believe those probs should have been addressed BEFORE health care was.

njbchbum

As with any political issue, folks like these will try and make this stand alone, but forget that this President appointed a blue ribbon panel and one of their goals was the tax code....he swished it away.

The Ryan budget, while I certainly do not endorse it totally addresses tax reform...Obama makes fun of it.

I read an article in the Wall St Journal detailing some of the back room work being done to try and get the prep work done on revising many aspects of the tax code and being worked on by both parties.

And while touting the Buffet Rule, this administration, despite EVERYONE saying that it is wrong and unecessary are going ahead and SPENDING 8 BILLION dollars on medicaire advantage expirement that even the CBO opposes but they will do it so that nothing drastic happens before the election.

NONE of these economic issues can be discussed on their own in my opinion.....VK is a smart man and he knows that both parties want tax revision and that the House budget begins that process, but we are about to begin the dirtiest political campaign in history....make that we have begun it already......and this is simply partisan politics pure and simple.

The WH has begun the class warfare stuff already with the Presidents remarks to[B][I] "The president warned union members that Republicans would rather give "rich folks" more tax breaks, than invest in the American worker.

"Republicans in Congress would rather put fewer of you to work rebuilding America than ask millionaires and billionaires to live without massive new tax cuts on top of the ones they’ve already gotten," Obama declared in a speech to to construction union members at the Hilton hotel in Washington.

Obama added that Republicans' economic plan depended on tax cuts for the rich and "dismantling your unions."

"I mean, if you ask them, what’s their big economic plan in addition to tax cuts for rich folks, it’s dismantling your unions. After all you’ve done to build and protect the middle class, they make the argument you’re responsible for the problems facing the middle class," Obama added.

The president praised the unionized middle class as the for contributing to an economy based on the middle class."


Ahead of May Day, Obama delivers class warfare | Campaign 2012 | Washington Examiner

This thread is part of an attempt to frame the issue and make the Republican party all a bunch of rich guys and the "poor" democrats (who may be even richer) are the only ones covering our butts....also making the unions stronger, bigger and mucho more powerful.

They will frame the President as a hero on this Bin Laden thing...very crass in my opinion as well as most of the world if you read the press and even taken apart and called some really bad names by Huffington who usually loves Obama.

This is what it will be like....this thread ignores the continual spending, the ignoring of attempts to engage in budget talks.....our country has not had a budget in THREE YEARS and nobody cares about that, nor are there any discussions on it. The Buffet rule was nothing but trickery and everyone knows that but again a chance to frame things how they want to. Just think the 8 billion dollars this adminstration is spending despite it being a sham is almost 20% of the entire Buffet rule....it is ludicrious.

DO both parties play the game...yep...for sure and I wait anxiously for the debates.....the cheapness and shallowness of the past few weeks is sort of disappointing to me.

Lots of people would answer that our tax system is 'fair' because they are doing alright financially. This defines many conservatives, because they want to 'conserve' things as they are and keep what they have. There is no motivation to change things, and in fact, a fear of changing things lest they end up with less than they have now. Depending on your orientation, you can label these folks 'desirous of protecting what they have worked so hard to accumulate' or 'greedy' and 'selfish'.
On the other hand, almost no one could logically argue the tax system is fair if you added the qualification '...for the country as a whole'. Our legislators are given the charge of seeing things that way, but few are able to overcome the distractions and pressures which surround them and stick to the job. Until a majority of them are influenced or compelled to change things, nothing will change.

A reduction in personal income taxes for those earning less than one million per year, combined with a corresponding increase on higher incomes which achieves revenue neutrality, will certainly create domestic jobs. Why certainly? Because real increases in incomes for lower, middle and even upper-middle class Americans are immediately poured back into the domestic economy. Yes, some of that is siphoned off to the Chinese manufacturers, but the greater amount is spent on US services and some goods. Increased demand for those goods and services equals instant job creation.
Much larger percentages of higher incomes are diverted to investments and expenditures outside of the domestic market. Direct investments in foreign businesses, Swiss Alps vacations and Canary Islands bank accounts come to mind. And wealthy folks admit they would not be disinclined to invest in the US economy if their tax obligation for capital gains were to be significantly raised from the current low figure of 15%.

The problem with corporate tax rates is not that they are too low. They are too high. Lowering corporate tax rates would also undoubtedly result in domestic job creation. The real problem are the corporate tax loopholes, some the outrageously unfair products of powerful lobbyists and corrupt or stupid congressmen, others, well-intentioned efforts to address economic circumstances which have long since changed, (see farm subsidies and oil company incentives).

We need new loopholes. For example, incentives for returning manufacturing jobs to the US, hiring veterans, and citizens instead of aliens. All loopholes must have expiration dates, long enough for businesses to chart longer term returns on investments, short enough to discontinue rewards to obsolete or unproductive enterprises.

What worries me is that those with the power to do so will continue to lack the courage and motivation to
initiate change, until we experience our next, and necessarily more serious, economic disaster.

This is a subject VK mentioned. I would like to offer an opinion. Sure bring the profits back to the USA and get a tax deal only if you invest the money in construction of plants, hiring and training employees to staff those facturies. Otherwise, no deal.

I don't have all the answers except that I know if you overtax companies they'll take their business elsewhere. It's common sense. With that business leaving, the jobs leave with them.

You can write a thousand more words about how I'm simplifying a complex subject, but I know what I've written is solid thinking.

I don't need a thousand words to make my point.

Originally Posted by RichieLion

I don't have all the answers except that I know if you overtax companies they'll take their business elsewhere. It's common sense. With that business leaving, the jobs leave with them.

You can write a thousand more words about how I'm simplifying a complex subject, but I know what I've written is solid thinking.

I don't need a thousand words to make my point.

OK, Richie, apply a little "solid thinking" to the situation with General Electric. GE didn't pay any taxes on their income in the U.S. at all last year. In fact, GE got a tax refund of $3.2 billion on taxes paid on prior years' income. This company should love doing business in the U.S.

So how many jobs has GE created in the U.S.? Sadly, even though GE can't get a better tax deal than paying nothing, they also haven't created any jobs in the U.S. since 2004. In 2004 GE employed 165,000 people in its U.S. operations. That employment declined steadily each year until the end of 2011, when GE's U.S. employment totaled only about 131,000 people.

So with maybe the most favorable tax deal of any large company--no taxes at all--GE cut it's U.S. employees by 34,000 jobs, a 21% cut in American employment. So in spite of enjoying a tremendously favorable tax deal, GE didn't create any jobs at all. In fact it cut jobs!

I don't know how you can cut GE's taxes to less than nothing, Richie. So again, like the MSNBC ad says, "Don't tax the job creators?...where are the jobs?"

Go ahead, apply a little solid thinking to this one Richie and tell us your findings and conclusions.

Then maybe you can take a crack at my original two questions. Your answers won't take a lot of words, but they will require a little "solid thinking".

Yet the one simple fact gets glossed over time and time again. It's not the governments money and they didn't earn it. The government some of you so fondly love and adore are nothing but parasites that feed off of other peoples success, takes money, creates programs, creates dependants, and buys votes.

It sickens me to watch people squabble over percentages and how much the government should confiscate from other people. Nothing more than thieves and some of you gleefully support them... In the name of fairness of course.

Originally Posted by Villages Kahuna

Before I ask my question let me say that I am a big fan of Apple. I've used their computers almost from the time they started selling them. I own several Apple computers, iPhones, iPads, even an iTouch. I've been an Apple shareholder for a long time and I've made a LOT of money on the investment. In fact, what I'm about to suggest might cost me personally. But yesterday's New York Times article surely should make people who defend current tax policy and even propose lower business taxes think a little bit.

Apple reported that it made almost $25 billon last year, but paid less than $2.5 billion in federal taxes, a 9.8% tax rate. I'd suggest that rate is probably lower than the tax rates paid by most of the people posting on this forum. I know it's a much lower rate than I paid last year, MUCH lower. It was also reported that Apple is joining with a number of other large corporations to fund a major lobbying effort to get Congress to pass a "tax repatriation holiday", a period when those companies doing a large proportion of their business outside the U.S. could bring their profits made overseas back into the U.S. without paying any taxes on them.

Let's briefly review how Apple does business. Almost without exception, not one Apple product is manufactured in the U.S. Almost all their products are produced in China. In fact, if you place an order for an Apple product thru their Apple Online Store, your order will be fulfilled directly from their distribution center in Shanghai. Other than Chinese citizens, no American will touch the product you order other than the FedEx employees who deliver it to your home. If you buy an Apple product at a brick-and-mortar Apple store, the products will be shipped there directly from China and only the Americans working in the store will be part of the supply chain.

Apple's profits doubled between 2010 and 2011. It as become the most valuable company in the world. Like most large multinational companies, Apple employs an army of tax lawyers figuring out ways wherein they can set up subsidiaries to do business in states or countries with low or no income taxes and then allocate income to those subs to minimize taxes. If you want to describe this activity as taking advantage of tax loopholes, that's exactly what it is. Many large corporations paid even lower tax rates than Apple in 2011; more than 30% of the Fortune 500 companies paid no federal income taxes at all last year. (Let's see, that's about half the individuals and 30% of our largest companies not paying any taxes to finance our government? That can't be right, can it? That would result in a big budget deficit, wouldn't it? Oh, I forgot...we have a big deficit!)

So when we hear the GOP mantra that changing tax policy other than further reducing corporate taxes will hurt job creation, it seems to raise the question which is the tag line on the frequently broadcast MSNBC political ad...

"Hurt the job creators? Really? Then where are the jobs?"

Is everyone in the U.S., individuals and businesses, paying their fair share in taxes? If there was ever an argument for a major change in tax policy, this is it.

How about this for a question....which tax change would have a more positive effect on the U.S. economy? Further reductions in corporate income tax rates, or a reduction in personal tax rates, even if corporate taxes were increased to make such change "revenue neutral"?

Wanna call that "income redistribution"? Go ahead. I'd call the current tax code arithmetic that doesn't add up.

Unfortunately you have bought in to the bs printed by the NY Times. During FY 2011 Apple was required to pay estimated taxes equal to their taxes in the corresponding quarter of FY 2010. Apple did so. Their earnings, however, had more than doubled. Apple's actual tax rate for FY 2011 was 24%, the same as it was for FY 2010.

http://files.shareholder.com/downloa...al_History.pdf

It is worth noting that approximately 60% of Apple's sales were outside the US and the profit on those sales paid in the countries in which the profits occurred.

Apple is under pressure to distribute part of its $100 billion cash holdings and is expected to pay out approximate $40 billion over the next few years. The problem for the US, generated by our tax code, is that only about one third of that $100 billion is in the US. Apple would have to pay an additional 30% tax to bring back home profits that they have already been taxed upon.

Consequently Apple will distribute the cash it has in the US and use the cash accumulated outside the US to expand business internationally, build more plants, contract new labs ,etc. Until we change our tax code to allow companies to repatriate profits without penalty, we will be deliberately shoving work to other countries.