Activists start holiday campaign to draw attention to 'tax dodgers,' cite Apple, Microsoft, Google

How U.S. companies manage to keep large portions of their profits from taxes has been a hot-button issue in recent years, with technology companies coming under fire for alleged tax dodging practices. For the Fourth of July holiday, a nonprofit activist group is attempting to bring attention to the issue.

According to the Americans for Tax Fairness group, Apple, Microsoft and Google are among the top U.S. companies that dodge taxes by placing offshore profits in shell accounts and similar methods. The group cites a March report from Citizens for Tax Justice, which claims the companies each increased their offshore profit holdings by more than $10 billion over the last four years; Apple and Microsoft were allegedly leaders in the tactic, with the former allegedly increasing its offshore profit holdings by more than $28 billion in the past year and the latter increasing its offshore profit holdings by $16 billion in the same time frame.

In April 2012, a New York Times investigative article claimed Apple funnels its profits to two Ireland offices before transferring them to the Netherlands and finally the Caribbean. The techniques gave Apple an effective tax rate of just 9.8 percent, according to the article. A Bloomberg report in 2010 claimed Google pays just 2.4 percent in taxes through the use of similar tax avoidance strategies. Citizens for Tax Justice claims the companies should all be paying tax rates of more than 30 percent.

Apple CEO Tim Cook testified in front of the U.S. Senate Permanent Subcommittee on Investigations that his company doesn't "depend on tax gimmicks" and that Apple pays "all the taxes we owe." The subcommittee used the technology company as an example of how corporations are legally avoiding taxes through loopholes in the U.S. tax code, with Sen. John McCain saying calling the tax system "broken and uncompetitive." McCain claimed Apple has more than two-thirds of its total profits in offshore accounts.

Microsoft founder Bill Gates has pushed for stricter tax laws for the wealthy, which presumably includes U.S. companies, claiming he doesn't pay enough to the federal government.

Source: Americans for Tax Fairness | Image via Americans for Tax Fairness

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I don't much have an issue with any of it. I'm sick and tired of a bloated government subsidizing laziness, malfeasance and just bad judgment amongst our citizenry. I'm tired a government that insists on confiscating more and more of our hard-earned money to pay for things it never should have been involved with in the first place, REGARDLESS of how well-intentioned. All of this whining is about trying to bilk more money from "evil corporations", when more than HALF our people don't even pay taxes. We need to stop all corporate welfare and we need to stop income taxes. Abolish the IRS and move to a simple national sales tax. NOT a VAT like the fools in Europe have, but an actual end-user sales tax. It's time for America to fight against the socialist agenda that has plagued it for the last few decades.

I don't take issue with companies filing taxes in the country where they made the money (so for example why should the US see money made in France?)

I do take issue where money is funnelled overseas to evade local taxation. A prominent example of this has been Starbucks which has evaded tax in the UK by funnelling money to its subsidiary in Luxembourg. The IP rights for the Starbucks brand are owned by the Luxembourgish firm and then licensed to the UK subsidiary. Thus money that is brought in in the UK could be counted as an expense by paying it out in 'royalties' to the Luxembourg firm where there is lower tax, reducing UK profits to incredibly low or even negative levels whilst actually making a profit. They have only recently stopped this practice due to public pressure since it came to light.

This may well be within the letter of the law but it is not within the spirit. As to where the practice is morally, the UK taxpayer provides a 'roof' over the head of Starbucks UK - safe streets, sanitation, a secure nation state, health care for workers. Why exactly should Starbucks not contribute to that as any solely UK-based firm and indeed its own employees do?

The money they earn in the US they pay US taxes on. The money they earn in France they pay French taxes on, etc. Why should they pay double taxes on the money they make overseas?

A better graphic for that list would be "$500+ Billion that could be brought back to the domestic economy if our current tax laws weren't so screwed up."

I don't see any of these companies "dodging" anything. They are merely filing taxes in accordance with the laws in place.

You want to blame someone, blame the idiots who made the laws with such loopholes in place.

Yes Activists start protesting! So that way that money instead of going to us go to Egypt they got 6.8 Billion this year in aide! Or to the IRS to fix there inaccurate portrayal of Star Trek flims! Or to give our *friends* more foreign aide another example Israel! We cant even afford free health for our selves but we sure darn provide free aide to foreign countries!

The thing is, there is absolutely 100% nothing illegal or unethical about these companies keeping tax dollars in a foreign country/bank. These companies conduct business overseas and when they bring in big profits they have the choice of leaving that money in another country where it's either tax free OR the tax rate is significantly less than America. Or they can bring it back to our American shores and immediately pay 35% corporate tax rate on that profit.

So think about this... GE has $108 BILLION dollars that they earned from customer sales, legally and legitimately. That is $108 BILLION dollars in exchange of products & services that people willingly paid them to receive. Then if GE was to transfer those funds to America, the Federal Government immediately gets $37.8 BILLION dollars right off the top, not counting any state level corporate taxes. So GE in the end walks away with around $70 billion dollars.

This just goes to show that those individuals running that website are nothing more than nanny statist's trying to take what doesn't belong to them, what they didn't earn, what they don't own, and distribute it to someone else who they feel needs it more than the business who earned it legitimately.

Now that is pure evil...

modem said,
The thing is, there is absolutely 100% nothing illegal or unethical about these companies keeping tax dollars in a foreign country/bank. These companies conduct business overseas and when they bring in big profits they have the choice of leaving that money in another country where it's either tax free OR the tax rate is significantly less than America. Or they can bring it back to our American shores and immediately pay 35% corporate tax rate on that profit.

So think about this... GE has $108 BILLION dollars that they earned from customer sales, legally and legitimately. That is $108 BILLION dollars in exchange of products & services that people willingly paid them to receive. Then if GE was to transfer those funds to America, the Federal Government immediately gets $37.8 BILLION dollars right off the top, not counting any state level corporate taxes. So GE in the end walks away with around $70 billion dollars.

This just goes to show that those individuals running that website are nothing more than nanny statist's trying to take what doesn't belong to them, what they didn't earn, what they don't own, and distribute it to someone else who they feel needs it more than the business who earned it legitimately.

Now that is pure evil...


Exactly.

Really liking the Apple logo as the article image here.

Also the graphic is pretty silly. Why should companies pay US taxes on all money earned globally? If that money is earned outside the US and used outside the US on things like R&D, administration, retail expansion, etc. then why should the US get tax money from that?

No idea. Apple earns over two-thirds of their profits in countries that are not the US. Of course their accounts in those non-US countries contain over two thirds of Apple's profits.

"offshore account" is a troll phrase.

Stetson said,
Really liking the Apple logo as the article image here.

Of course, Apple is true innovator on tax evasion techniques... Iwonder if they are patented.

amazing. so these "patriotic activists" actually prefer to pay for cost of product + cost of more tax from these companies. wow.