How Apple Sidesteps Billions in Taxes
How Apple Sidesteps Billions in Taxes –summary-
Yoichi Horibe
I would like to talk about
modern tax problem by using tax breaks afforded as an example. At first, Apple
constructs an office in Reno to avoid high tax rates. Reno is a kind of tax haven for low
taxations. High technology companies tend to use tax haven to avoid paying tax.
Recently, these kinds of companies like Google, Amazon, and Microsoft have been
using royalties on intellectual property.
On the other hand, non-tech
companies like Wal-Mart have to pay a tax rate of 24 percent which is about
average for this kind of industry. They would try to use tax havens too. For
example, hedge fund tends to use tax haven‘s money when they need large money
for mergers and acquisitions. Hedge fund would specialize in this method rather
than tech companies.
Basically, Apple’s employees
are Americans who live in United States because they specialize in making i-pods.
If they can earn money by the royalties, they don’t have to go all over the
world to sell i-pods by oneself. For
example, Luxembourg is a good place to avoid tax. That is roughly 20 percent of
iTunes’s worldwide sales. However, they also implement lobbying campaigns
because they want to sell the products in their place too.
Unfortunately, there are so
many criticisms about Apple’s tax breaks. Even though Apple uses legal methods,
however their annual report doesn’t show how much tax they paid government. In
addition, the government doesn’t show how they use the tax for local
facilities. Local facilities which
couldn’t receive government‘s benefit are exposed. Apple always shows
exaggerated figures but it is not reliable guides to what is actually paid.
In conclusion, I think this
is a kind of money game. Actually, local businesses have been victims of the
game thought they are not a player. Apple said” We have contributed to many
charitable causes.” However, I think this is wrong because the game player must
pursue to their profit for their shareholders. The most important thing is to
revise each annual report for local business, I guess. If the structure of the
game is pretty good, this world would be better and fairer.
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