Apple has been questioned by the United States Congress and the court of public opinion in regards to its growing horde of cash it keeps outside the United States. Apple insists that it has done nothing wrong and has not broken any laws, foreign or domestic. The cash in question comes from profits of operations outside the United States. Apple has pursued a plan to keep the offshore profits outside of the country in order to avoid the United States 39% corporate tax. The structure of companies Apple has created in Ireland have enabled the company to stockpile profits and pay little to no tax.
Apple and many other multinational companies have been keeping profits made outside of the United States for years in an effort to reduce tax exposure. Apple has taken the scenario a step further by creating a company that has does not have a country of origin, and thereby doesn’t owe any country taxes. Other multinational corporations have taken notice, and have begun to emulate Apple. The corporate tax rate in the United States has involuntarily been the driving force behind corporations developing offshore tax avoidance schemes.
The question arises whether or not it is morally right for Apple, or any other company, to avoid paying taxes to any country just because they can? Apple benefits from the services taxes pay for in every country they operate in. Should taxes only be paid by those that cannot shift profits through a shell game of tax avoidance? Maybe the tax code needs to be updated to motivate companies to bring offshore profits back to the United States. Undoubtedly, something needs to be done, but in the meantime Apple will continue to shift profits and create huge stockpiles of cash offshore.
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...ploying this scheme will undoubtedly inspire other multinational corporations to emulate their profit shift playbook. This will only escalate as other companies follow suit and leave enormous amounts of wealth outside the United States.
It annoys me that Apple can get away with this profit shift. Probably because I didn’t buy any Apple Stock at $12 in 1998. While Apple is not breaking any laws, it is defrauding the global community out of billions in tax revenue. While I am a Capitalist, that would do the same thing if given the chance. I am also tax payer that is increasingly squeezed by new taxes and increasing tax rates. While I don’t know what the answer is, a solution needs to be pursued by the international community in order for companies like Apple to pay their share of the global taxes that pay for social programs and improvements.
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