Case Study Of Apple In The United States

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Executive Summary
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 …show more content…

Apple pays about $6 billion annually in federal taxes on these sales. Congress has no authority over sales outside of the United States. This is where one has to question the United States antiquated corporate tax system, which was created long before it was common for United States corporations to have such global operations. It does not seem reasonable to expect a company to bring the money back to the United States just to be taxed at 39%, just because it is the right thing to do. If the tax code was written in a way that allowed foreign profits to be repatriated at a single digit percentage rate, I believe more companies would prefer to have their money in the United States. This is not going to happen at the current 39%

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