Avoiding Taxes, Apple’s Irish Strategy Apparently Backfires

Updated Aug. 30, 2016-

Apple’s strategy to avoid paying taxes in the U.S. has ostensibly backfired in the wake of the European Commission’s €13bn tax assessment. That’s $14.5 billion in U.S. dollars.

The tech company has been receiving massive Irish tax benefits, which the commission says is illegal. By sheltering profits in Ireland, Apple has avoided paying U.S. taxes.

Ireland has allowed Apple to pay 1 percent in taxes – significantly less than other companies.

Apple and Ireland say they’re appealing the ruling.

You might call it bad tax Karma.

The most nonsensical irony in corporate America involves Apple CEO Tim Cook’s tax strategy which has drawn fire from the European Commission. Why? It’s apparently backfiring, and is unpatriotic and shortsighted.

Why? It’s unpatriotic and shortsighted. Apple and others aren’t paying their fair share to the U.S. treasury.

They disingenuously avoid paying America’s 35 percent corporate tax rate while being heavy donors to Democrats.

Mr. Cook’s tax philosophy was illustrated in a far-reaching interview published in the Washington Post.

ID-100313503“The tax law right now says we can keep that [profit] in Ireland or we can bring it back,” Mr. Cook told the newspaper.

While capitalizing on a mega tax loophole, such CEOs oppose the candidacy of Donald Trump, who campaigns on dramatically lowering the onerously high tax rate to a low 15-percent rate.

Like the nonprofit Citizens for Tax Justice, Mr. Trump argues more American workers could get family wage jobs if companies, such as Apple, stopped hiding an aggregate $2 trillion overseas.

He has also lamented the the nation’s near-$20-trillion debt and failing infrastructure such as roads, bridges and airports.

Mr. Trump has blasted Apple for outsourcing jobs and inversions to shelter its income.

While complaining about high taxes, CEOs like Mr. Cook favor Hillary Clinton who famously wants to split up the economic pie in income redistribution while hiking taxes even higher.

Apple has about $200 billion in cash, so it’s very strange fiscal thinking.

Conversely, Mr. Trump’s plan will revise the tax code to make it possible for corporations to keep most of their money and incentivizing them into hiring more employees.

“We shall tax and tax, and spend and spend, and elect and elect.”

-Harry Hopkins

Facing mounting criticism for taking its American profits overseas, the tax-dodging CEO says he won’t bring his company’s money back to the U.S. until there’s a “fair rate.”

Other critics of Mr. Cook’s strategy say he’s guilty of unpatriotic behavior.

“It is the current tax law. It’s not a matter of being patriotic or not patriotic,” Mr. Cook was quoted as saying.

Poised to take a bite out of Apple is the European Union. Ireland has prospered with its tax code – the lowest in the EU.

But EU officials want a piece of the action and are strategizing to penalize such companies for more tax revenue.

Apple isn’t the only global American company to capitalize on Ireland’s tax code. Many others are, too.

The moral:

It is a matter of patriotism to pay American taxes, eliminate the nation’s near-$20-trillion debt, rebuild the nation’s infrastructure and to create family wage jobs.

Plus, by evading America’s tax structure – assuming the EU prevails – Apple and other companies will eventually pay a higher price for sheltering their American profits in Ireland.

That is, of course, unless Mr. Trump wins the election.

From the Coach’s Corner, here are editor’s picks:

How CEOs, Taxes and Policymakers Fail the U.S. — Like it or not in President Obama’s second term, stagnant growth means there’s still the possibility of a double-dip recession. We’re in a precarious position, largely, because businesspeople and consumers lack confidence in the economy – for good reasons.

How Not to Fear an IRS Audit – 6 Tips — The key to dealing with an IRS audit is to have done your homework. If you do all your homework, you don’t have to fear an audit.

Ideas to Accelerate Slowest Economic Recovery in Decades — Most voters are likely to vote their pocketbooks. So for them the positive spin on the economy by Hillary Clinton and President Barack Obama doesn’t reflect reality.

Governments – from Cities to Federal – Dangerously in Debt — The U.S. economy has been slowly mending. However, the situation is bleak for governments at all levels. Why? High debt is dangerous and economic growth is dreadfully slow. This is best illustrated by the enclosed U.S. Debt Clock.

‘Dirty Little Secrets’ Trump Hasn’t Told You about Economy — Donald Trump has pushed the envelope to say the least. Many businesspeople get it. So do entrepreneurs, and millions of different demographics of voters who are angry at the economic decline of America.

Academic Study: Rich Pay More than Their Share in Taxes — The 2016 study by the National Center for Policy Analysis reveals the current tax code is highly progressive. It’s entitled, “U.S. Inequality, Fiscal Progressivity, and Work Disincentives: An Intragenerational Accounting.”

“We shall tax and tax, and spend and spend, and elect and elect.”

-Harry Hopkins


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

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Seattle business consultant Terry Corbell provides high-performance management services and strategies.