How Apple is Hurting the American Taxpayer

It's the holidays, and whether you celebrate Christmas, Hanukkah, Kwanzaa or anything else, there's one thing that we all have in common.

Corporate America wants us all to buy stuff, lots of stuff.

And from a purely economic standpoint, the holiday season is a big boon for retailers and manufacturers who wait all year for their products to fly off the shelves on black Friday and the month leading up to Christmas and the New Year.

But where's all that money we spend actually ending up?

It's not going to taxes, and it's not circulating through the American economy.

No, because companies like Apple, General Electric, Boeing and Verizon don't pay much in taxes relative to their earnings, at least not here in America.

Take a look as 60 Minutes' Charlie Rose pressed Apple CEO Tim Cook on the issue.

That last sentence from Cook is really strange, because it's technically true, but it's beside the point.

The real question isn't whether Apple "pays what it owes", the real question is whether Apple is hiding massive amounts of profit offshore so that their CPAs can calculate that Apple owes less than it really should.

As Charlie Rose pointed out, Congressional and independent probes have shown that that's exactly what Apple is doing.

And they're making a killing by doing it, the Senate Permanent Subcommittee on Investigations found that Apple avoided paying 9 billion dollars in U.S. taxes.

SEC filings show that Apple holds over $181 billion in offshore profits, more than any other U.S. company, and they would owe roughly a third of that, about 60 billion dollars, if they tried to bring the money back into the United States.

But it's not just Apple, it's pretty much all of the biggest corporations on the Fortune 500.

According to research done by Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund - the 500 largest American companies hold more than $2.1 trillion of accumulated profits offshore, just to avoid supporting America by paying the U.S. taxes they should.

The same research shows that they would collectively owe more than $620 billion if they decided to bring that money back home.

One thing that pretty much every presidential candidate points out as a problem, even if they disagree about what needs to be done about it, is the fact that companies are dodging our taxes and storing their massive profits overseas.

In 1952, Corporate Income Taxes made up 32% of Federal Revenue, today those taxes make up closer to 10% of federal revenue.

And you and I personally are making up the difference.

Payroll taxes have increased as a portion of federal revenue by more than corporate income taxes have decreased. In the 1950s, payroll taxes only made up about 10% of federal revenue, and now they provide roughly 40% of what it costs to run our government and keep our streets paved.

That's right, the richest companies are hiding TRILLIONS of dollars overseas, and the average working American is paying the difference in taxes.

According to Americans for Tax Fairness and Citizens for Tax Justice, companies like General Electric, Boeing, Verizon and 23 other firms paid zero, none, zilch, in federal income taxes between 2008 and 2012.

That's right, according to that research, for four years, 26 of the most profitable companies that the world has ever seen paid nothing in taxes. And 111 other firms paid nothing in at least one of those years.

Americans for Tax Fairness and Citizens for Tax Justice also noted that 288 other Fortune 500 firms only paid a tax rate of 19.4%.

To put that in perspective, that's in the neighborhood of what a single person who earns 30,000 dollars a year has to pay on his or her income.

According to Citizens for Tax Justice, at least 358 companies on the Fortune 500 were operating subsidiaries in tax havens at the end of 2014, a strategy that if you or I tried, we'd end up in jail.

And as Vermont Senator and Democratic Presidential hopeful Bernie Sanders has been pointing out for years, some of those companies even end up getting rebates from the government.

Which means that your tax dollars are not just paying to make up the loss in federal revenue that these giant corporations aren't paying, it means that your tax dollars are actually being used to subsidize those corporations that aren't paying taxes.

Over the last 60 years, and on steroids since the advent of Reaganomics, our tax code has created a massive redistribution of wealth from average working people into the offshore corporate bank accounts both these companies and many of their senior executives and large stockholders.

Tim Cook probably isn't evil, and he didn't even really lie to Charlie Rose, Apple pays what it technically owes year to year.

The problem is, thanks to corporate shell games and an easily exploited corporate tax code, Apple and America's other largest corporations simply don't owe, and thus, don't pay, as much as they should.

Which is why it's time to close corporate loopholes to make it harder, and more expensive, for companies to dodge U.S. taxes and offshore their profits.

Comments

w1ders's picture
w1ders 6 years 40 weeks ago
#1

And H.Wallstreet Clinton will help them offshore more money and jobs if elected. She also likes what her husband did to public services that are sorely needed. Looking forward to her or a republican in the W.H. is about a toss up. We need to elect Senator Sanders and stand with him in 2016!! Thank you Thom for the info.

rlthrockmorton 6 years 40 weeks ago
#2

Equating Hillary to any Republican is doing an extreme disservice to logic and experience. Republicans have nearly destroyed this country and one more in the White House will certainly complete the job. There isn't one among the Republican candidates that one can point to that would be anywhere near as competent as Hillary. I for one would love to see a return to the country that Bill handed off to the cheerleader President, GWB.

stecoop01's picture
stecoop01 6 years 40 weeks ago
#3

I, personally, no longer celebrate Christmas as a religious holiday, but rather for the Winter Solstice and the return of the Sun.

So, to all of you, may the Return of the Sun bring you a joyous and prosperous New Year.

Aliceinwonderland's picture
Aliceinwonderland 6 years 40 weeks ago
#4

Reply to #2: rithrockmorton, I respectfully disagree. Republicans and corporate Democrats together have destroyed this country; Republicans didn’t do all that damage by themselves. It wasn’t a Republican who ushered in NAFTA and began offshoring all manufacturing jobs in this country; it wasn’t a Republican who repealed Glass Steagall, or consolidated our media so that it morphed into the corporate fascist freak show we have today. Those were some of the most destructive policies inflicted on us and our society, and we've got Clinton #1 to thank for all of it.

I have never voted for a Republican in my entire adult life. And as of this election, I will never cast another vote for a corporate fucking Democrat. Eight years of Obama’s bullshit has been the last bloody straw for me.

On another topic brought up by Thom, I think this whole holiday shopping mania thing is stupid.

I love getting together with friends and family, feasting together... but since my teens, have had a take-it-or-leave it attitude about gifts. It's always fun to get a gift for someone when you know what that person likes, and you happen to stumble upon the perfect thing for him or her... But all this obligatory shopping is just a waste of time and money in my opinion. Doing each other's shopping is just plain stupid.

When I was a kid it was about getting new TOYS. All about the toys. What kid doesn't love new toys?! But once I'd outgrown my craving for toys, I completely lost interest in gifts. And that's the part that makes the holiday season such a commercial goddam racket. What a silly way to celebrate the birth of a socialist and spiritual leader who owned only the clothes on his back, and would give away even that to someone who needed it.

2950-10K's picture
2950-10K 6 years 40 weeks ago
#5

The biggest lie ever told....give the Fascists tax breaks and it will trickle down. The other big lie is free trade, which only facilitates the biggest lie.

RLTOWNSLEY's picture
RLTOWNSLEY 6 years 40 weeks ago
#6

Cook also said that in the future his company would be hiring most of their technical staff in China where young graduates are far more qualified than American graduates. He didn't include the fact that they will work for far less money and benefits. There is an enormous benefit for companies that have a highly qualified technical staff proficient in the language of the country where their manufacturing operations are located. More American technical jobs flushed down the drain ! Another American corporation hastening America's fall to 3rd world status, a prediction by several independent economists that is expected to occur within the next 10 years ! Passage of the T.P.P. will only accelerate this move to that predicted outcome !

David32's picture
David32 6 years 40 weeks ago
#7

Thom, what does it take to get the point across to all those, yourself included, that corporations ARE TAX COLLECTORS, NOT TAX PAYERS!!!!!! They have no FAIR SHARE since it is the customer that pays. How can we claim that corps are not people when we turn around and treat them like people when it comes to taxation? Do you suppose that all those profits would be moved offshore if we eliminated taxes on profits? We should eliminate corporate/business taxation on profits, tax only for essential fire, police, etc services and find other ways to curb corporate greed. Hiding taxation of the public behind the myth of corporate taxes is in my mind the biggest scam ever perpetrated on taxpayers. Wasn't shifting taxation to corps attributed to Reagan so the claim could be made that the taxpayers burden was lightened? Thom, I agree with most of your ideas but you and Bernies are just wrong on this FAIR SHARE nonsence. Surely you realize that at the end of the day it is the public's labor that pays for everything.

SisterAnnie's picture
SisterAnnie 6 years 40 weeks ago
#8

I can only offer the following. 1) Stop consuming as much as you can, buy as local as possible and buy USED if possible. 2) Have fewer children...otherwise you are looking at your children being indentured servents of sorts - barely any pay and continual debt. 3) Vote - even if you have to hold your nose. I LOVE my country and it is crushing to me to see how horribly we have fallen and how many in the generations from the 50's to the 90's have become predators. That is not the US I grew up in and its not the US I believe in. We can do better.

Thom's Blog Is On the Move

Hello All

Today, we are closing Thom's blog in this space and moving to a new home.

Please follow us across to hartmannreport.com - this will be the only place going forward to read Thom's blog posts and articles.

From Screwed:
"If we are going to live in a Democracy, we need to have a healthy middle class. Thom Hartmann shows us how the ‘cons’ have wronged this country, and tells us what needs to be done to reclaim what it is to be American."
Eric Utne, Founder, Utne magazine
From The Thom Hartmann Reader:
"Right through the worst of the Bush years and into the present, Thom Hartmann has been one of the very few voices constantly willing to tell the truth. Rank him up there with Jon Stewart, Bill Moyers, and Paul Krugman for having the sheer persistent courage of his convictions."
Bill McKibben, author of Eaarth
From The Thom Hartmann Reader:
"Thom Hartmann seeks out interesting subjects from such disparate outposts of curiosity that you have to wonder whether or not he uncovered them or they selected him."
Leonardo DiCaprio, actor, producer, and environmental activist