In a scene reminiscent of one of the Hangover movies, the Senate Permanent Subcommittee on Investigations met today to examine whether or not Apple is properly paying its taxes. The Chair of the Subcommittee, Senator Levin of Michigan opined at the start that Apple was one of the biggest, if not the biggest, tax avoider in America. The session went downhill from there, if such a thing is possible.
What was Apple's misconduct? Simply put, Apple has tens of billions of dollars in foreign countries on which it has not paid United States corporate income taxes. Oh, the horror!
The senators at the meeting, like the group in the Hangover movies, cannot seem to remember what they have done in the past. After all, Apple has all this money in foreign accounts because Congress set the law up to allow it. Indeed, the very Democrat party that led this hearing is the same party that put the law in place in the first instance. The law is not difficult to understand. The United States Tax Code provides that if a corporation earns profits in another country, those profits will not be subject to American taxes unless and until the funds are brought back to the USA. That rule applies to every American corporation across the land.
If we focus on Apple, what that means is that an American company, Apple, has earned tens of billions of dollars by selling computers, ipods, iphones and other items in countries all around the world. Apple has then paid taxes on all those earnings to the country in which the profits were earned. If Apple sells a Mac in London, it pays tax to the UK on the profits. If Apple sells an ipod in Beijing, it pays tax on the profits to the Chinese. After a while these profits build up to a large amount, and that gives Apple a decision to make. If Apple were to bring back ten billion dollars to America, it would have to pay the IRS roughly 3.5 billion dollars in taxes. On the other hand, if Apple keeps the money in accounts outside of America, it owes no tax. There is nothing sneaky or underhanded going on here; it is the very law which these hazy idiots in the Senate are responsible for.
The impact of this law is also quite clear: it works very hard to keep jobs and economic growth out of the USA. Think about it. Apple has tens of billions of dollars that it could invest. If it builds the identical plant in North Carolina or just outside of Shanghai, the cost will be dramatically higher in the USA. Why? If Apple brings half a billion dollars back to America to pay for the cost of construction, it will also have to pay an additional $175 million in taxes to Uncle Sam. There is no such tax burden if the plant is built in China.
Now think about what the apparently hungover senators are saying and doing. They are not trying to change the law to get rid of the disadvantage for investing in the USA that they created. No, these fools are instead lambasting Apple because it is following the law. Can it be that they just do not understand what is happening? It certainly would seem so.
One last note about today's hearing that we cannot overlook. Senator McCain of Arizona revealed today that he really is as old and out of touch as he looks. He actually asked the Appple CEO why he has to keep updating the apps on his I-phone. He wanted to know why Apple couldn't fix that. The man actually is unaware that new updates are improvements to his phone. He seems to think that these are repairs. How could anyone ever have thought that this bozo could win a presidential election?
What was Apple's misconduct? Simply put, Apple has tens of billions of dollars in foreign countries on which it has not paid United States corporate income taxes. Oh, the horror!
The senators at the meeting, like the group in the Hangover movies, cannot seem to remember what they have done in the past. After all, Apple has all this money in foreign accounts because Congress set the law up to allow it. Indeed, the very Democrat party that led this hearing is the same party that put the law in place in the first instance. The law is not difficult to understand. The United States Tax Code provides that if a corporation earns profits in another country, those profits will not be subject to American taxes unless and until the funds are brought back to the USA. That rule applies to every American corporation across the land.
If we focus on Apple, what that means is that an American company, Apple, has earned tens of billions of dollars by selling computers, ipods, iphones and other items in countries all around the world. Apple has then paid taxes on all those earnings to the country in which the profits were earned. If Apple sells a Mac in London, it pays tax to the UK on the profits. If Apple sells an ipod in Beijing, it pays tax on the profits to the Chinese. After a while these profits build up to a large amount, and that gives Apple a decision to make. If Apple were to bring back ten billion dollars to America, it would have to pay the IRS roughly 3.5 billion dollars in taxes. On the other hand, if Apple keeps the money in accounts outside of America, it owes no tax. There is nothing sneaky or underhanded going on here; it is the very law which these hazy idiots in the Senate are responsible for.
The impact of this law is also quite clear: it works very hard to keep jobs and economic growth out of the USA. Think about it. Apple has tens of billions of dollars that it could invest. If it builds the identical plant in North Carolina or just outside of Shanghai, the cost will be dramatically higher in the USA. Why? If Apple brings half a billion dollars back to America to pay for the cost of construction, it will also have to pay an additional $175 million in taxes to Uncle Sam. There is no such tax burden if the plant is built in China.
Now think about what the apparently hungover senators are saying and doing. They are not trying to change the law to get rid of the disadvantage for investing in the USA that they created. No, these fools are instead lambasting Apple because it is following the law. Can it be that they just do not understand what is happening? It certainly would seem so.
One last note about today's hearing that we cannot overlook. Senator McCain of Arizona revealed today that he really is as old and out of touch as he looks. He actually asked the Appple CEO why he has to keep updating the apps on his I-phone. He wanted to know why Apple couldn't fix that. The man actually is unaware that new updates are improvements to his phone. He seems to think that these are repairs. How could anyone ever have thought that this bozo could win a presidential election?
1 comment:
The BOZO's that voted for him for the nomination.
Had we nominated Romney in 2008, He most likely would have won & we would not be discussing OBAMA & his cronies.
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