Apple Inc. apparently didn’t get the memo: There are only two certainties in life – death and taxes.
Or perhaps as one of the world’s most recognized, and profitable, corporations, neither death nor taxes are that certain for them, or other large companies.
For those not following business news, Apple has been ordered to pay $14.5 billion in back taxes to Ireland by the European Union.
That amount, they say, represents the taxes the tech giant should have paid over the past decade.
Among the finer points that may have been missed, Apple didn’t do any chicanery to avoid the taxes. They cut a legitimate deal with Ireland, which has tremendously benefited the Emerald’s Isle’s economy and given a ridiculous boost to their employment and income averages. The deal has clearly benefited Ireland, but at the expense of countries that might have collected the taxes.
The Europe Union’s regulation enforcer said that Apple’s deals with the Irish government allowed the technology giant to pay virtually nothing on its European business in some years. Apple paid an effective corporate tax rate of 1% in 2003 and just .005% in 2014.
The deal allowed Apple to create Apple Operations International, a company that does not legally exist anywhere. Apple has said they will eventually get around to paying taxes from that company, possibly to the U.S., but only if the tax rates here are changed.
And, yes, someone can rightly point out that Apple already pays a lot of taxes, but look at the proportion compared to what they make. They freely enjoy the protections that our nation and European nations enforce to maintain their profits. If an Asian company blatantly copied all Apple products and services, who would be called upon to enforce their copyright protections?
The amount they are being asked to pay back ($14.5 billion), while seemingly staggering to regular folks, is a mere drop in the bucket for Apple, which, according to The New York Times, has a total cash pile of more than $230 billion.
Unfortunately, Apple isn’t the only large corporation double dipping in Ireland. American firms are increasingly clever at finding ways to pay (or not pay) taxes in other countries. Facebook and Google (along with Apple) have saved about $8 billion in recent years through their deals in foreign lands.
Stopping this shell game of finance is incidentally a point both Hillary Clinton and Donald Trump generally agree.
According to visualeconomics.com the amount not paid by Apple, Facebook and Google could pay for the federal government’s entire share of the children’s health insurance program, which covers about 4 million kids; fund the salaries of nearly 200,000 elementary school teachers, buy a year’s worth of groceries for 770,416 families of four.
The average American, according to visual economics, takes home about $37,000 after taxes, but if we paid our taxes like Apple does – paying a .7% rate would save us about $3,575 each year. What reeks of unfairness is the avenues that big companies and some unpatriotic individuals awash in cash find to not pay taxes, thus shifting the burden to all us Main Street operations that lack the schemes.
A small landscaper can’t very well claim he’s not ready to declare whether his crew actually owns equipment in Pickens or Gilmer so he’ll hold off on paying his taxes.
And could you imagine the response of the IRS if an individual said his weekly paychecks really go into a holding company in the Caribbean (another prominent place to park wealth) so he’s not going to pony up his share for defense spending this year?
Come on. We love our iPhones and iPads but we regular Americans have to pay taxes. And the largest portion of Apple’s business comes from the U.S. It’s not fair that Ireland is willing to cut a sweetheart deal, to help an American company avoid paying their fair share.
Maybe this election year will really strengthen the spines of some candidates to put a stop to this perk given to the biggest companies at the expense of the rest of us.