Five thousandths of a percent

Apple pays five one-thousandths of a percent in taxes.

It is able to do this by means of its agreement with a tax-haven country (Ireland) that allows it to pretend that its business is there and pay microscopically low taxes there, instead of paying fair taxes in the countries where it makes its enormous profits.

A European Union commission, after several years of investigation into just ten years of Apple’s operation, has ordered Apple to pay 13 billion euros ($14.4 billion, £11 billion) in back taxes to Ireland.

This seems an enormous amount, but to Apple, which has $230 billion cash, it is “no big deal”.

Apple and Ireland react with a show of virtuous anger, and vow to appeal: Apple, because it prefers not to pay; Ireland, because it wants to keep its reputation as a safe tax haven, so that international corporations will remain interested in opening small offices in it so as to defraud other countries.

The Guardian’s article gets around to quoting the mild, proportionate remarks of the commission and its supporters only after a lot of furious and threatening arguments from Apple and Ireland. See what you think of those. Seems to me they translate into: “We want to keep our tax haven dodge. Five thousandths of a percent instead of the fifteen percent that others have to pay is nothing special. It isn’t the illegal ‘aid by a government to a company.’ We don’t care that the citizens of England and Germany, and America, too, are being robbed of the fair taxes that could go toward their schools an hospitals.”

The argument about creating jobs is often used as a cover. Let us do this, it’s bad but it employs people. Abolish concentration camps and you put guards out of work.

I had wondered why the European Union, with its many beneficent initiatives, could not do something about tax havens like Ireland and Gibraltar and the British Virgin Islands. The all-out resistance of the international corporations, which can bribe governments to be on their side, explains why. Perhaps this unprecedented and courageous ruling will be the beginning of a wider crackdown on this global form of unfairness.

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13 thoughts on “Five thousandths of a percent”

  1. I own Apple stuff because it is quality stuff…reliable and robust. Corporate operation, fiscal manipulation, and greed to the corporate monster is not a lack of morality, it’s just business.

    I live in the United States of America. Corporate greed is a way of life. It starts small, an entrepreneur who wants to make a difference and perhaps get rich doing so. As he grows, he cares less about the difference and more about financial growth until they reverse their priorities: boom! Standard Oil, Union Pacific, Blue Cross, Merc, Apple.

    I can’t blame them; I used their products when they were trying to make a difference, and still do, even when I am outraged at what I helped them to become.

    Our respective governments Feed those monsters so as to get a piece of that meal. The bigger the monster, the bigger the kill. To all of them, it’s just business. A game. To me, well, I wish they all could make those differences without being so immoral and greedy.

    1. I’ll go ahead and take offence at your reply. I’m an entrepreneur. I’ve started three companies. None are at Apple’s level, but each is respectable and respected. Just like King Arthur Flour, we’re all B corporations; companies that think of social well being just as much as profits.

      The list of largest employers in America include Home Depot, McDonalds, Target, UPS, all the Yum! brands (Taco Bell, KFC, etc), Pepsi, Albertsons, Walgreens, CVS, Disney, and so forth. While you could argue that any of these companies have corporate greed, I would argue that no one has ever yelled at most of them for business practices that are designed only to avoid paying taxes.

      Regardless, you do have a choice. Vote with your wallet. Vote with your feet. Support the local business as opposed to the global one. Get involved. Be the change you want to make.

      Personally, I couldn’t care less about Apple’s tax situation. I couldn’t care less about Apple, frankly. Just like I couldn’t care less about Google, IBM, Dell, Microsoft, or any other tech company other than mine. After all, I have businesses to run and try to get rich from!

        1. If I look at the page, and see the stacked replies, I thought I was replying to Anthony Tripodi’s comment, “as [the entrepreneur] grows, he cares less about the difference and more about financial growth until they reverse their priorities.”

      1. If you are an honest man you should be offended, although offense was not my intention. It was more a lamentation at the operating practices of the mega-corporation. But, since you are offended you are owed some background.

        I am a retired airline pilot. I worked for Pan American World Airways until they were sold, then for Delta Airlines until I retired. When Pan Am was dying, they manipulated stock deals, they sold off assets, they sued for tax relief, and furloughed many of their employees. They did so while providing large monetary incentives to their upper management in the form of largess bonus. When the airline was taxed or penalized, that extra cost was passed to the consumer or employee.

        Our division was sold to Delta Airlines. After the New York terror attacks, Delta declares bankruptcy. They sue for the rights to use the retirement accounts to survive, and used that money to provide large monetary bonuses to management personnel in order to buy loyalty. You can’t buy loyalty, and I’m guessing they didn’t learn that practice in business school. Meanwhile, many employees retire without their pensions…

        My father was dying of liver cancer. He needed a medicine that cost $600 per dose. $600. That from a corporation that made a two billion dollar profit that same year. That’s after covering their operating expenses…

        Now, maybe I’m being too simplistic and slightly unfair, but let me tell you what it sounds like. To me it sounds like corporate greed.

  2. Taxing corporations is a devious, yet brilliant way that government increases taxes on its citizens.

    Corporations don’t pay taxes. Their tax bill is passed on to their consumers as a price increase, or to their shareholders, as a dividend decrease. The $14 billion will ultimately be paid by consumers like you and me.

    If the politicians were honest, and they needed $14 billion, they would send a bill for $2,250 to each of Ireland’s 6.4 million citizens, rather than taxing Apple.

    Equally despicable is that by taxing Apple Ireland’s government is increasing their coffers at the expense of citizens of other countries.

    1. I would have thought that if corporations pay no tav, inthat they pass the cost to customers, then Apple would have paid its share, so as yo look like a good citizen, then passed gthe cost on; instead of paying 0.005 percent in a secret deal that was bound to come out.

  3. Apple is just one garden variety example of shrewd use of tax laws to their benefit. Egregious? Certainly – but far more outrageous is Mylan and their manipulation of EpiPen prices. They get benefit of EU/Netherlands tax laws for similar monetary benefits, but gain protection of their device through US patent laws – for a medical device that is literally life-saving for people with allergic reactions. Ten years ago I could purchase the EpiPen for about $25US, not for me, but to have on hand for administration to others who might suffer anaphlaxis. The cost of the Epinephrine in the EpiPen is trivial – the jacked-up exorbitant cost is for the delivery device, which is what Mylan patented under US laws while still a US company. And now they try to appear magnanimous by offering a ‘cut-rate’ of about $300 to people susceptible to anaphlaxis. What bunk. And most of the sales of the EpiPen are from public entities who pay full price – ambulance services, police departments, schools, etc – which are all funded by our tax dollars.

  4. This is unconscionable and should be a main item in the news, not just another item lost in our emails. It’s truly disgusting!

  5. Perhaps the most astonishing little fact in this story, for me, is that Apple sends all their money to their head office, which doesn’t exist any where in physical space, so, according to Apple, they don’t owe any part of it to any national government. I guess they have their head in the cloud.

    I’ve used Macintosh computers for 30 years, and I’m writing this comment on an ipad, so I’m a tiny part of the problem, too.

    1. Yes, and I am writing this, and had to write that blog post, on an iPad (with considerable difficulty), because I read the article just before departing on a journey. Wait till after and it would be old news.

      By inventing things on which we become dependent they get power over us, and over governments. Governments then don’t dare to gainsay them, but we can.

      Whether I, if I had the luck to invent something that millions wanted, would resist the temptation to pay lawyers to find me ways to dodge taxes, will never be known.

      1. I own an iPad, two Macintosh computers, and an iPhone. I’ve never used one of the Macintoshes, the other hasn’t been turned on since 2008, the iPad has been charging since at least January next to my bed with the occasional bleep to let me know that the power cord has come out of the wall, and the iPhone sits on the marker ledge of the whiteboard in my office, plugged in and vibrating when it’s time for a meeting notice with no cellular service or other functionality.

        In short, I do not feel dependent upon my Apple devices.

        We have culpability in this as well – we buy their products. Some of us because we “have to have them” and some of us because “we’ll look bad if we don’t” and some of us because “they’re the best tool for the job.” Regardless of the rationale, Apple cannot survive without sales. Want to put a big dent in $230 billion whatevers? Stop giving them new ones.

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