While not all that is said is true, not all that is truth is told.
Apple’s Empty Tax Argument. Threats from multinational corporations are driving down taxes across the world. Admitting sheltering at least $30 billion of international profits in Irish subsidiaries that pay no tax at all, Apple has called for U.S. corporate tax rates to be slashed. Institute for Public Accuracy. Tuesday, May 22, 2013
The Guardian reports: “Apple has called for U.S. corporate tax rates to be slashed after it admitted sheltering at least $30 billion of international profits in Irish subsidiaries that pay no tax at all.
James Henry said today: “Companies like Apple are fond of saying that they don’t break the law, but it’s an empty argument since they are largely responsible for what the law says, since big companies have such an influence over malleable tax law. And of course, slave owners made the same arguments in the 1850s, factory owners using child labor made the same arguments in the 1890s and sweatshop owners in Bangladesh made the same argument just last month.
Henry is lead researcher for the report “The Price of Offshore Revisited” from the Tax Justice Network. Last year they estimated that total wealth in tax havens was between $21 trillion and $35 trillion dollars. He is currently in the Netherlands.
“Apple stashes most of its global profits in Ireland, where a couple of thousand employees work. Meanwhile, hundreds of thousands of Chinese workers build iPads and such and virtually no taxes are paid there. Royalty payments regarding patents are funneled through the Netherlands, which grants an even lower tax rate than Ireland. Companies used to act this way towards states in the U.S., but the formulary apportionment system ended the worst abuses.
“We really need a Truth Commission on this whole large-corporate offshore tax arena. The fact is, Apple is just one of many manufacturers that are playing these games, using offshore loopholes to absolutely decimate corporate tax revenues. These practices really took off in the late 1990s, when the Clinton administration suddenly made it much easier to set up unlimited numbers of foreign entities that are allowed to enjoy all the benefits of tax treaties. As if they really were separate from their parent corporations, with substantive activities in the low-tax jurisdictions where they end up. So it is no accident that the share of corporate after tax income in GDP is at an all time high, while labor’s share, and real incomes, are shrinking. Combined with the right’s insistence on budget cuts and austerity, what we really have is an undeclared class war, pure and simple. And labor did not start it — it was started by the corporate elite.”
Henry was recently featured in “The Tax Free Tour” — a new in-depth look at global tax havens from Dutch Public TV that, among other things, answers the question: How does Apple only pay 1.9 percent on its overseas profits when the U.S. corporate tax rate is 35 percent — explaining tax avoision techniques like “double Irish with a Dutch sandwich.” Also, see taxodus.net — an online game about global tax dodging. Henry is former chief economist at the international consultancy firm McKinsey & Co. ###
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