John McCain is an Idiot.

I’ve never been a fan of John McCain.  I can appreciate his service without blindly following his philosophy.  And nothing proves to me that the man is an absolute idiot more than his current attack on Apple, Inc.

In the interest of full disclosure, I am an Apple fan.  I’d like to think I’d feel the exact same way if McCain attacked any other corporation the way he is attacking Apple, but I may not have the information about those companies that I do about Apple.

That said, McCain is just way off base in his thinking about the mega tech company.  In statements he made in the Senate hearing about Apple’s alleged tax evasion, an evasion in which it has never been asserted that Apple violated any laws, McCain claims that “It’s time for Apple to invest in America.”

Funny, that’s EXACTLY what Apple was trying to do when they pulled the alleged shenanigans that got them called before the hearing.  Here’s the back story.

Over 30 years ago, back when Steve Jobs was in charge the first time, Apple started to expand into overseas markets.  They developed a holding company to handle the overseas business, Apple International Operations (AIO) and looked for a tax friendly country to set up shop.  Ireland came to the rescue and offered AIO a sweet deal on corporate tax income if they set up shop on the Green Isle.  Apple accepted, and AIO has operated out of Ireland ever since.  Starting with the iPod and moving on to the iPhone and iPad, Apple has seen it’s overseas market skyrocket.  Two thirds of their sales and three fourths of their revenue is now from selling products and services overseas.

During all this time, the one thing Apple has always kept in the good old USA is research and development.  As such, Apple has a mammoth campus in California, and is building an even larger building.  The giant ring shaped “Campus 2” will be the home of Apple’s R&D for decades to come.  This is a multi-billion dollar investment in America that McCain flat ignores.

Since 2001, and I’d argue that the change really started in 1998 with the colorful iMac and Steve Job’s return to the company, Apple has seen revenue skyrocket.  Completely free of debt, Apple has amassed a fortune in cash.  While Apple often pays generous dividends to shareholders, and buys companies and technology from that stockpile, many shareholders have complained that Apple was under leveraged with its lack of debt, and over hoarding on their cash.  Apple listened and decided that over the next year, through dividends and share buy backs, Apple would return $100billion to shareholders worldwide.

Except the vast majority of shareholders are in the United States.  So despite the billions Apple is investing in America building Campus 2, Apple plans to return $100billion to the US Economy.  But to do that, Apple was about $17billion short.  AIO, however, was not.  AIO could have transferred about $26billion to Apple and after Apple paid $9.2billion in taxes it would have the $17billion it needed for the $100billion investment.

However, since that represents a 35% tax payout, Apple looked around for another way.  And when Apple walks into your bank, with hundreds of billions of dollars in cash and asks for a deal on a loan, banks listen.  Apple swung a sweet deal on a $17billion loan on the strength of the billions in cash and the yearly income of tens of billions it currently makes each year.  As a result, Apple will be paying 2% on $17billion rather than 35% on $26billion.

It was this huge loan that caught the eye of McCain.  For a sense of scale, this is roughly the same amount of money the Bush administration ultimately gave the Auto Industry during the bail out.  No matter how you cut it, $17billion is a huge sum of money.  What upset McCain isn’t that Apple took out a massive loan, but that they did it to avoid paying $9.2billion in taxes.

Again, $9.2billion in taxes versus the $100billion in American Investment in the form of share buy backs and dividends.  After Apple already paid billions in taxes last year, and will pay billions in taxes this year.

Again, Apple didn’t break any laws.  And the accusations that Apple lobbied for tax loop holes is ludicrous.  Apple pays far less than other tech companies in lobbying.  While that is about to change, historically Apple has been a small player in politics.

But like a typical politician, when McCain sees a pot of money, he looks to figure out how he can tax it.  McCain desperately wants to get the governments hand into Apple’s cash reserves.  So accusing Apple of evasion makes sense… even though the money didn’t come from American consumers or American sales.

If McCain was serious about trying to get American companies to repatriate their cash reserves, maybe he should try to be more like Ireland.  Or any other tax haven country.  Allow these companies to repatriate their reserves at a reasonable rate, say 2%-5%, and they will do it.  If Apple could return money from overseas sales (the sole reason for AIO to exist) at the same rate as Ireland, there would be little reason for AIO to continue to exist.

But ultimately McCain is an idiot because he truly believes Apple doesn’t invest in America.  So let’s see exactly what Apple DOES invest in this country.

Apple employs 50+ thousand people at highly competitive wages.  Besides being a massive employer of American talent, all those employees pay income tax, taxes collected by Apple FOR FREE as a service to the government (and another issue for another blog). Apple imports, and pays import taxes, on millions of units brought back from manufacturing in China (and don’t think that Apple hasn’t looked elsewhere for manufacturing, they have.)  Apple has a billion dollar campus in California and is expanding it on a massive scale to increase R&D space.  Apple has routinely HIRED during the recent recession while other companies in their sector have been laying people off.  And, perhaps most importantly, Apple created an entire economy with it’s App Store, a marketplace that didn’t exist 5 years ago and has paid developers around the nation over $9billion in sales.  And don’t forget the upcoming $100billion in payouts to shareholders.  All of which will be TAXED.

Furthermore, Apple did absolutely nothing different than what John McCain does every year. McCain has accountants that file his taxes and make sure that the Senator has the smallest tax exposure possible.  That’s all that Apple has done.  Perhaps we should be asking McCain what he has done to “Invest in America” instead.  Can he boast as much investment in America as Apple has done?

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11 thoughts on “John McCain is an Idiot.

  1. Nicely said. John McCain (RINO, AZ) is indeed an idiot. Sadly he lots of company in the US Senate and House of Representatives.

  2. Pingback: Is John McCain really an idiot? | The Attack Machine.com

  3. Oh, but how many “shovel-ready” jobs does Apple produce? Isn’t that the barometer of how much they care about the average American? McCain is pissed because Apple played the game and won. It’s quite simple: make it profitable to add jobs/make things here and the manufacturing facilities will come back.

    nicely done, sir…

    • Shovel ready? Thousands. They are opening five retail stores a quarter and beginning construction on Campus 2. Somebody has to pick up a shovel and build them. Not to mention the millions of products that must be shipped daily.

      It was the invest in America comment that pissed me off.

  4. John McCain is an Idiot, but that is really a function of his incessant war mongering rather than anything to do with his tax posture. You seem like a nice man, and from your description of yourself you seem to think that being a positive force in society is a good thing.
    That is why your arguments in favor of apple are baffling. The problem in our country is that over the last 30 years, the “ownership society” mantra has driven us all away from measuring our behavior based on what is socially acceptable to a very dangerous and constant lament by those who want to own everything: “I did nothing illegal”
    A) That is a toxic position for us all to take — for one thing, our legal system is called the “common law” which effectively means that nothing is technically illegal until there is a law against it, or we go to court and determine if we want to make a law against it. You see, the common law implies that we all sort of understand what is right and wrong in our society and we will stay within some “common norms” to avoid finding out after going to court that what I did was against the “common law”. So in effect looking only to laws on the books or codes, ignores a major strength of our unique form of government — people self-regulating and avoiding constantly pushing the envelope to get ahead of their neighbors. Put another way, tweeting pictures of your nether regions to Sydney Leathers is not “illegal” but it certainly can impact your image as a good citizen!. Imagine Anthony Weiner just saying using the Apple defense “I did nothing illegal” — good luck! And that is how we want it, Anthony Weiner doesn’t need to go to jail, but he loses his perch as a positive leader in society, and people will be warned against emulating him.

    B) Now, to the case of Apple. Lauding this company for keeping R&D here while moving manufacturing overseas is comical. Apple is using every “not illegal” trick in the book to leverage our phenomenal system i) they get use of the best resources in our university labs (US tax subsidized), they hire students who have generally received govt assistance to man their labs, they uses our court system to protect patents, they use the immigration system to receive preferential treatment for their foreign hires to replace hirer wage Americans and they depend on our military and state department to protect them at home and abroad. ii) then they transfer the intellectual property they create in the US to a foreign subsidiary for below market value (which is controversial and probably illegal, although hard to prove), and then they make sure that that subsidiary occupies a nether country which allows them to avoid taxation on profits, and finally, they lobby congress to allow them to avoid paying taxes on the profits they want to repatriate.

    So when Apple says “I did nothing illegal” they actually mean “I did nothing that I have been successfully prosecuted for, and if you just tell me what you plan to prosecute me for, I will lobby congress with the billions of dollars in extra cash sitting on my balance sheet (from not paying taxes) and will make it legal, so don’t bother to prosecute me.”

    So here we are. You are a nice family man who probably pays 35-50% of your income in taxes. If you make more than $1,000,000 a year, you probably could hire lawyers to try to figure out how to off-shore some of your income and investments in order to lower your effective tax rate. Most people don’t and that is because a) it is a huge hassle and b) we are a phenomenally successful country primarily due to the fact that most people pay their taxes as conceived, not as manipulated by sitting on the razor’s edge of the code. Greece and many other countries suffer inordinately when people figure out how to avoid taxes, and then it becomes institutionalized.

    The problem with Apple doing it and being fawned over is that you are simply encouraging everyone else to go and undertake the same activities. The tax code can always be gamed, if you hire enough lawyers. I the case of Apple, their absurd responses at the hearings indicate that they are spending an inordinate amount of time and money gaming our tax code. Maybe they shouldn’t go to jail, but they should not be held up as an example of great corporate citizenship!

    If Apple were a good corporate citizen, it would be lobbying for the govt. to reduce corporate taxes across the board to say 25% and then giving up the loopholes and tax strategies they have created. Although Tim Cook said that he would be amenable to these types of solutions, his company does nothing to cause this change. Instead they continue to pay consultants and employees massive amounts to lower their US tax bill.

    Apple is essentially a foreign company which keeps 10-15% of its operations in the US to benefit from our intellectual property generation abilities and so that the executives can live in Atherton or Menlo Park and hire illegal aliens to tend to their kids and gardens. Good taxpaying Americans should not be fooled by their faux US first posture.
    “Designed in California (by foreign engineers imported to keep costs down, and send their designs to China where employees of our contractors live in hovels and occasionally commit suicide on the job)” is a far cry from “made in America (and working to make America a better place to manufacture high tech goods)”

    • Apple is a good corporate citizen, better by far than most of its competitors. The insane tax code already in place that Apple is trying to “game” forces companies off shore already.

      Prior to 2007, America didn’t have a single major player in the cell phone industry. Today, we have one. Apple. Yet because Apple plays in world wide markets, you think Apple should be taxed at domestic rates when no one else in the field does? That’s hardly fair to Apple.

      As far as Apple lobbying congress for anything, Apple is very new in that game. Apple just hired a lobby firm in the past two years, generally taking a pass at trying to manipulate legislation. They’ve changed their position because to not do so makes them less competitive. Samsung spends far more than Apple on lobby efforts, and they aren’t even an American company!

      Everyone with an ounce of sense is trying to “game” American tax codes. You’d be insane not to try. The tax code is broken, and makes no sense for Apple to repatriate millions of already taxed dollars that it raised through sales overseas. Where is the logic in that?

      Sounds to me that you don’t want Apple to remain competitive and go out of business. Ford Motor Company made $5billion last year, only a billion in the USA, and they didn’t repatriate the other $4bil, but Apple does it and you’re calling them poor corporate citizens. Heck, every major multi-national company in the world behaves like Apple. It’s the common practice.

      Want the money here? Congress needs to make it competitive and attractive to bring it here. And 20-25% is neither. Frankly, the common sense thing would be to not tax corporations at all. All you’re doing is double taxing the consumer anyway. Let’s just face facts, the income tax is nothing but legalized theft of our personal property.

  5. You seem to know a lot about what Apple’s lawyer’s and PR people would like us to think. You almost sound like you have a financial interest in Apple’s wellbeing. And by the way paying 2% to borrow your own money is only saving money if the tax code is screwed up enough to let you do it. The rules will change and corporate scofflaws will be forced to repatriate. Under those rules, they won’t be issuing any debt.

    You said: Apple is a good corporate citizen, better by far than most of its competitors. The insane tax code already in place that Apple is trying to “game” forces companies off shore already.
    Reply: Just because you say so doesn’t make it so. Yes the code is bad. Apple is part of the problem, not the solution.

    You said: Prior to 2007, America didn’t have a single major player in the cell phone industry. Today, we have one. Apple.
    Reply: That would be Motorola, Palm and Garmin. Garmin switched its focus to GPS related items and its stock price has doubled since 2009. Motorola is still around, but sick, yet for many years it dominated the field while manufacturing in the good old US of A!

    You said: Yet because Apple plays in world wide markets, you think Apple should be taxed at domestic rates when no one else in the field does? That’s hardly fair to Apple.
    Reply: Fair? Apple has the largest horde of cash of any corporation on the planet – $145bn. if Apple repatriated all of its cash and paid 30% of it in taxes, it would still have the largest horde of cash of any corporation on the planet, as Microsoft is 2nd at $74bn. Mull that fact over my friend. Maybe Apple really is benefitting from all that US R&D, and should consider repatriating rather than investing more and more over seas — maybe it would not only be patriotic, but it would be good business. But no, their money grubbing lawyers say they should instead borrow against the position and pay interest, because that is tax deductible also. Maybe there is something else going on here. Maybe we should enact a special tax just for Apple to make sure that we get paid back for creating a system that offers them the best R&D on the planet and the best Intellectual property laws on the planet. I guarantee you that Samsung does not benefit from as rich of a IP infrastructure at home and that is also the case for Chinese manufacturers.

    You said: As far as Apple lobbying congress for anything, Apple is very new in that game. Apple just hired a lobby firm in the past two years, generally taking a pass at trying to manipulate legislation. They’ve changed their position because to not do so makes them less competitive. Samsung spends far more than Apple on lobby efforts, and they aren’t even an American company!
    Reply: That is factually incorrect. The website Opensecrets,org shows that Samsung spent less than $1.8m since 2010, and Apple has spent over $7m in the same period, and plans to spend $4mm+ this year. Apple may be late to the lobbying game, but it has figured out that schmoozing the jackals in DC is good for its wallet,

    You said: Everyone with an ounce of sense is trying to “game” American tax codes. You’d be insane not to try. The tax code is broken, and makes no sense for Apple to repatriate millions of already taxed dollars that it raised through sales overseas. Where is the logic in that?

    Reply: Yes the tax system needs reform. Unfortunately as long as Apple, Exxon and GE, continue throw money at keeping the system exactly the way it is, there will be no change. The logic is that Apple is not just magically making profits overseas. It is selling its IP to sham corporations at a discount. The only logic is that it thinks it can cheat and get away with it. So here’s my logic – I went to school at UVA and under the honor system, we could take closed book exams at home — guess what Mr. simple man. Father, kayaker, biker, and friend, I stuck to the code even though I knew that I could look at my books and get away with it. You on the other hand are clearly of the school that says I would have been insane not to game the system, maybe get a different text book than the one from my class an use that??? and get straight A’s. What you call insane, I call dishonorable. And that is why Tim Cook looked like such a clown trying to explain how a company based in Ireland but owned managed and controlled in California by Apple, should escape taxation in both places.

    You said: Sounds to me that you don’t want Apple to remain competitive and go out of business. Ford Motor Company made $5billion last year, only a billion in the USA, and they didn’t repatriate the other $4bil, but Apple does it and you’re calling them poor corporate citizens. Heck, every major multi-national company in the world behaves like Apple. It’s the common practice.
    Reply: Again, just because you say it does not make it so. Apple pays an effective rate of 7%. The US Tax Foundation, pegs the average rate for US multinationals at 25% — http://taxfoundation.org/article/are-multinational-companies-dodging-their-taxes. And now that you mention Ford, it is highly successful, is a top 5 global manufacturer and pays 25-30% in taxes. Apparently, you can be successful, manufacture a lot in the US, pay taxes and still compete. And as My calculation above indicates, if Apple paid full repatriation, it would still be competing very well, to the tune of having the world’s largest cash reserves. No sir, I don’t want Apple to go out of business. I want it to live by our rules, so that it has an interest in fixing them, rather than just ignoring them.

    You said: Want the money here? Congress needs to make it competitive and attractive to bring it here. And 20-25% is neither. Frankly, the common sense thing would be to not tax corporations at all. All you’re doing is double taxing the consumer anyway. Let’s just face facts, the income tax is nothing but legalized theft of our personal property.

    Reply: There is not a single serious organization on the left or right that believes the corporate tax rate should be zero. The US created the corporate form in order to provide benefits and shield investors from liabilities beyond their investments. We Americans support courts that provide the best protection of IP and also have created a subsidized transportation and financial system that works hand in glove with the corporate model. When a cigarette manufacturer spend 30 years in court litigating against people that it lied to for decades in order to have them pass away before they get paid, those court costs are paid by us, not the corporations. When the Supreme court spend its time ruling that a corporation is actually a citizen and therefore, can give as much money as it wants to political candidates, it is the US tax payer that foots the bill. Now that I think about it, maybe we should raise corporate rates!

    You have a very strange attachment to Apple which has led you to besmirch your own reputation on your own blog by creatively making a bunch of important false claims. Any person who watched the Apple hearing could clearly see that Tim Cook was embarrassed by the absurd statements his lawyers were forcing him to make. Maybe after this you could show some humility, but I doubt it!

    You are a strange type of apologist who somehow believe that the company which would have the largest cash horde in the world even after repatriating at full freight, is a poor entity that could become uncompetitive and go bankrupt at anytime. There is no logic to your point, just a strange attachment to the front runner — You must have grown up a Cowboys fan! Apple is successful and would be successful at full US rates. If it actually cared enough to follow the rules, it could then speak loudly and eloquently about the need for tax reform. Sadly instead of choosing the high ground and being a force for positive change, Apple has chosen to take advantage of a broken system — Apple is on the low road.

    • The rules will change and corporate scofflaws will be forced to repatriate. Under those rules, they won’t be issuing any debt.

      My Turn:The rules may change, but there will still be debt issued all the time. Heck, St. Jude issued debt for their new addition to campus, despite having the cash on hand to pay for it. Why? Their cash earned more interest than the debt cost them. It was good business. I loaned myself money to buy a car, because it was cheaper than cash at the time. Again, good business.

      You said: Apple is a good corporate citizen, better by far than most of its competitors. The insane tax code already in place that Apple is trying to “game” forces companies off shore already.
      Reply: Just because you say so doesn’t make it so. Yes the code is bad. Apple is part of the problem, not the solution.

      I never said Apple was part of the solution. I said McCain was. And the rest of the politicos that want my money.

      You said: Prior to 2007, America didn’t have a single major player in the cell phone industry. Today, we have one. Apple.
      Reply: That would be Motorola, Palm and Garmin. Garmin switched its focus to GPS related items and its stock price has doubled since 2009. Motorola is still around, but sick, yet for many years it dominated the field while manufacturing in the good old US of A!

      My Turn:Garmin and Palm were never major players in the cell phone industry. Motorola had a chance at it, but lost out big to Nokia. Apple is the most profitable cell phone company ever. If your going to say Motorola was a major player, then you’d have to define Apple as a juggernaut of the industry.

      I’ll take that back. Moto was instrumental in creating the business. So for that, they were major. But by 2000, long before Apple got in, Moto was on the long slide down to the role of minor, at best, player.

      You said: Yet because Apple plays in world wide markets, you think Apple should be taxed at domestic rates when no one else in the field does? That’s hardly fair to Apple.
      Reply: Fair? Apple has the largest horde of cash of any corporation on the planet – $145bn. if Apple repatriated all of its cash and paid 30% of it in taxes, it would still have the largest horde of cash of any corporation on the planet, as Microsoft is 2nd at $74bn. Mull that fact over my friend. Maybe Apple really is benefitting from all that US R&D, and should consider repatriating rather than investing more and more over seas — maybe it would not only be patriotic, but it would be good business. But no, their money grubbing lawyers say they should instead borrow against the position and pay interest, because that is tax deductible also. Maybe there is something else going on here. Maybe we should enact a special tax just for Apple to make sure that we get paid back for creating a system that offers them the best R&D on the planet and the best Intellectual property laws on the planet. I guarantee you that Samsung does not benefit from as rich of a IP infrastructure at home and that is also the case for Chinese manufacturers.

      My Turn:So it’s about their cash, not their activities. Because they are successful and have the largest cash hoard in the world we should punish them. That makes sense. At least now I know where your intentions lie. It’s not about the loan, it’s about the cash hoard. Let’s see, in 1996 Apple was on life support. Now, in 2013, Apple has a cash hoard. Tell me, where you complaining about AOI back in 1996? Or only now that AOI has a cash hoard is it an issue. Well, don’t worry. Apple is currently paying shareholders $100bil over the year, so the hoard will be greatly reduced and taxed.

      You said: As far as Apple lobbying congress for anything, Apple is very new in that game. Apple just hired a lobby firm in the past two years, generally taking a pass at trying to manipulate legislation. They’ve changed their position because to not do so makes them less competitive. Samsung spends far more than Apple on lobby efforts, and they aren’t even an American company!
      Reply: That is factually incorrect. The website Opensecrets,org shows that Samsung spent less than $1.8m since 2010, and Apple has spent over $7m in the same period, and plans to spend $4mm+ this year. Apple may be late to the lobbying game, but it has figured out that schmoozing the jackals in DC is good for its wallet,

      My Turn:You got me on this one. I was reading an older article from 2010 about Apple hiring the lobbyist for the first time. However, being new to the game, how much has Samsung spent over the last ten years? Microsoft? Ford? Apple is the new kid on the block.

      You said: Everyone with an ounce of sense is trying to “game” American tax codes. You’d be insane not to try. The tax code is broken, and makes no sense for Apple to repatriate millions of already taxed dollars that it raised through sales overseas. Where is the logic in that?

      Reply: Yes the tax system needs reform. Unfortunately as long as Apple, Exxon and GE, continue throw money at keeping the system exactly the way it is, there will be no change. The logic is that Apple is not just magically making profits overseas. It is selling its IP to sham corporations at a discount. The only logic is that it thinks it can cheat and get away with it. So here’s my logic – I went to school at UVA and under the honor system, we could take closed book exams at home — guess what Mr. simple man. Father, kayaker, biker, and friend, I stuck to the code even though I knew that I could look at my books and get away with it. You on the other hand are clearly of the school that says I would have been insane not to game the system, maybe get a different text book than the one from my class an use that??? and get straight A’s. What you call insane, I call dishonorable. And that is why Tim Cook looked like such a clown trying to explain how a company based in Ireland but owned managed and controlled in California by Apple, should escape taxation in both places.

      My Turn:So, you do the honorable thing and don’t claim your deductions, report your garage sale money to the IRS (oh, and you did get the business license for the garage sale too, right?) and you don’t claim anything for all you give to charity either. Because that would be dishonorable. Because nothing Apple did is any more dishonorable or illegal than any of those things.

      You said: Sounds to me that you don’t want Apple to remain competitive and go out of business. Ford Motor Company made $5billion last year, only a billion in the USA, and they didn’t repatriate the other $4bil, but Apple does it and you’re calling them poor corporate citizens. Heck, every major multi-national company in the world behaves like Apple. It’s the common practice.
      Reply: Again, just because you say it does not make it so. Apple pays an effective rate of 7%. The US Tax Foundation, pegs the average rate for US multinationals at 25% — http://taxfoundation.org/article/are-multinational-companies-dodging-their-taxes. And now that you mention Ford, it is highly successful, is a top 5 global manufacturer and pays 25-30% in taxes. Apparently, you can be successful, manufacture a lot in the US, pay taxes and still compete. And as My calculation above indicates, if Apple paid full repatriation, it would still be competing very well, to the tune of having the world’s largest cash reserves. No sir, I don’t want Apple to go out of business. I want it to live by our rules, so that it has an interest in fixing them, rather than just ignoring them.

      My Turn:They are living by the rules. You want the rules changed to punish them for having the largest cash hoard on the planet. They aren’t ignoring the rules, they are meticulously using them.

      You said: Want the money here? Congress needs to make it competitive and attractive to bring it here. And 20-25% is neither. Frankly, the common sense thing would be to not tax corporations at all. All you’re doing is double taxing the consumer anyway. Let’s just face facts, the income tax is nothing but legalized theft of our personal property.

      Reply: There is not a single serious organization on the left or right that believes the corporate tax rate should be zero. The US created the corporate form in order to provide benefits and shield investors from liabilities beyond their investments. We Americans support courts that provide the best protection of IP and also have created a subsidized transportation and financial system that works hand in glove with the corporate model. When a cigarette manufacturer spend 30 years in court litigating against people that it lied to for decades in order to have them pass away before they get paid, those court costs are paid by us, not the corporations. When the Supreme court spend its time ruling that a corporation is actually a citizen and therefore, can give as much money as it wants to political candidates, it is the US tax payer that foots the bill. Now that I think about it, maybe we should raise corporate rates!

      My Turn: Raise them all you want. Corporations don’t pay taxes. At least successful ones don’t. If a corporation is making a profit, and that’s the point right, then they aren’t paying taxes on anything. Their customers are. All you’ll be doing raising taxes on corporations is passing the bill on to us. Frankly, I’d rather not pay their taxes, but you seemed enamored with it.

      You are a strange type of apologist who somehow believe that the company which would have the largest cash horde in the world even after repatriating at full freight, is a poor entity that could become uncompetitive and go bankrupt at anytime. There is no logic to your point, just a strange attachment to the front runner — You must have grown up a Cowboys fan! Apple is successful and would be successful at full US rates. If it actually cared enough to follow the rules, it could then speak loudly and eloquently about the need for tax reform. Sadly instead of choosing the high ground and being a force for positive change, Apple has chosen to take advantage of a broken system — Apple is on the low road.

      My Turn:Actually, I’ve never liked pro football, and have been using apple products since the late 80’s. There is no attachment to the front runner here, I was already an Apple fan when Apple looked like it was about to go bankrupt. And let me tell you, Apple may have the largest cash hoard, a fact that is entirely unrelated to this conversation, but go ask Microsoft how quickly one can fall. Or Gateway. Or Dell. Or Yahoo. There are plenty of examples of how quickly fortunes can be reversed, and how the mighty have fallen. I’ve seen Apple on the bottom and a Microsoft that seemed unstoppable and could do no wrong. Roles reverse.

      And now, since you tried to analyze me, here’s how you come across. It quickly became apparent that your problem isn’t the tax code, because you admitted it’s flawed. So it must be the company you’re upset with. And you’ve clearly shown it is all about the cash. I suspect you were a Cubs fan growing up, always complaining about the richer clubs paying for championships instead of earning them.

  6. You don’t like taxes and somehow assume that if corporations don’t pay them, we will end up in a better place, we will keep more of what we make. That is simply not the way economics work. Small changes in tax percentages tend to have very little impact on behavior. A large tax cut that would inure to the benefit of the biggest consumers, would generally put more cash in the hands of the richest consumers, and in in the short run would likely drive up the price of luxury goods, as rich people would have more disposable income, and lower income people would be paying higher taxes to pay for government expenses, which will not magically disappear.
    Your response completely ignored the benefits and theories I mentioned above, relating to the corporate structure.
    Having corporations pay taxes is rough justice for assigning taxes to the consumption of goods. In a round about way, corporate taxes pay back the system based on usage — which is a much fairer way to do it, than to just ignore the fact that corporations get benefits and use up expensive resources, and then go and try to collect a flat tax from everyone, even if they did not consume, and therefore did not cause corporations to create expenses that we fund. This is a well known issue referred to as an “attribution problem” and the corporate tax at 20-25% would do a better job of solving this problem
    As for your defense of Apple it is verging on mania. No sir, when I go to my accountant at the end of the year I ask him to hit it right down the middle of the fairway. All of our household helpers are on the books and get paid with check from our bank account. Some of our college and high school babysitters get cash, I have never had a garage sale, and when I donate goods to Goodwill monthly I don’t take a receipt. So please abstain from making assumptions about my behavior.
    The reality is that in life, some hypocrisy and lawlessness is acceptable. Comparing garage sales income inclusion to what Apple is doing is so out of bounds, that it really is not worth discussing — but I am a bit of an intellectual masochist and will try to explain the difference.

    Garage sales are ignored generally because they are usually a sideline activity that would create more paperwork to include, than taxes generated would cover. So we rationally tend to ignore that behavior — goes back to my common law argument — our society accepts this practice as it is marginal and has no social benefit associated with rectifying it. Now if I was in the garage sale and barter business, you can bet that the IRS would be breathing down my neck to include my revenues in tax returns.

    Apple is not asking its accountants to hit it down the middle of the fairway. Apple is even playing golf. Apple is hiring Rodney Dangerfield and asking for the Triple Lindy, every year in order to a) steal IP from its US companies and transfer them overseas (illegal, but hard to monitor, especially if the corporation is willing to lie) and then b), it is hiring Chinese people to manufacture phones in Chinese plants that only produce Apple products, where people are literally committing suicide on a regular basis.

    Are you kidding me??? Please stop with the logical inaccuracies and look at the big picture. Apple steals IP, sends it to Ireland for transfer to China, then uses abusive employment tactics to produce goods that are sold around the world.

    Selling IP at a discount to a related party is stealing.

    Other than a sad argument like — if Apple doesn’t do it, someone else will, please directly address these pathetic issues or just accept that Apple
    is at best as bad as other corporations and at worst, leading the way. Just to help you out and hopefully break this mindless worship of a legal creation, please read about what Apple and now Samsung are doing in order to get you your coveted technology:

    http://motherboard.vice.com/blog/samsung-is-copying-apple-s-shady-labor-practices-too

    Note that Samsung is “copying” Apples despicable actions. After reading this, if you want to wax on about Apple’s great contributions to Western Civilization, go on — but I for one will not be listening.

    If you cannot admit that there is more than something fishy going on here, it will be quite obvious that you are simply and anti-tax zealot with a bad technology consumption habit.

    People change. Companies change. Today’s Apple is not the spunky underdog fighting to create a better world. Today, Apple is a colossus with more cash than any company in the history of mankind. If that company can not be depended upon to set a better example, then I fear greatly for the future of capitalism, and you should really change your bio on this blog:

    Try: A simple man. Father, kayaker, biker, and friend. I don’t look for much, give what I can, and take what is offered from anyone, even companies that steal and treat foreign employees with the same respect that the settlers treated native Americans and slaves. I like good friends, good times, and good causes, unless they interfere with my accumulation of technology which I find to be cool. I’m also, quite possibly, certifiable.

    Seriously, you can like the I-phone without making a crusade out of defending the indefensible behavior of a corporate giant.

    • Again, it’s all about the cash with you. I’m done. You’re clearly a ” too much profit” zealot who wants to punish those that make some undefined too much money. All you care about is punishing the successful and bitching about people who make too much. Welcome to Chicago Cubs baseball.

  7. Truly hilarious response. Very little of what I just wrote has anything to do with Apple’s cash position. Read the article. Better yet have your kids read it and ask them what they think about Apple. When companies go overseas for tax purposes that is one thing. When they go overseas for tax purposes and end up abusing workers, they are bad guys.
    You must be a fan of Lance Armstrong’s, lamenting the nasty government for coming down a true American success story — so what if he cheated a bit, everyone else was doing it. What is Lance’s excuse — you would be insane not to game the doping rules.
    I rest my case.

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