1. How is it possible that Apple, as a U.S. company, does not pay the regular corporate tax rate?
Apple is effectively trying to accomplish a high profit while minimizing on payment of high taxes (Schwartz and Chen). Ideally, to achieve this, apple transfers its income into various branches and also by uniting with some other companies that pay lower taxes.
Taxes are mostly generated from real products as compared to intellectual properties which may include distinct software that runs on their devices. Apple mostly does make income through material goods but rather from their cerebral properties (Holtzblatt, John, and Norbert 133). It has also built up companies in states that experience low taxation which includes: Ireland and the British Virgin Islands. By doing this apple can reduce its worldwide taxes. To not pay a lot of taxes apple has designed their collaborative strategies that make use of the penchants in the tax governance.
2. How do you feel about Apple's tax strategies from both a moral and a business perspective?
Morally apple tax strategies are compliant to the daily tax acts since they pay taxes to the government of Ireland and in terms of business perspective; it is contributing to the growth of Ireland economy (Schwartz, Nelson and Chen). On my point of view, apple tax strategies are okay since they pay taxes to many governments even though they have targeted countries that have a low taxation rate. Apple has defended itself before the Senate stating that is proud to be an American company (Holtzblatt, John, and Norbert 138). They pay 30.5% of the realized profit to the U.S which is much compared to the tax they pay to the other ancillaries that they have established their business. These subsidiaries tend to save apple a large amount of money that can be lost when they pay taxes only to the U.S government
3. Please take an opposing position from the one you took in (2) above and defend that position.
Apple company is ranked among the most profitable company in the world since it realizes a significant margin of profits yearly, but it is good at evading taxes especially U.S taxes. It does this by taking refuge in countries where they pay little taxes. Apple can realize low foreign rate through shifting of larger shares of profit into its ancillaries. Since Apple is a company originally based in the United States, it should not evade taxes put in place by the government because a considerable part of the enterprise is situated in the U.S
4. Now defend your original position against the arguments you made in part 3.
Apple may have strategies to avoid much of the taxes, but by doing this; they tend to create many job opportunities not only in the U.S but also to other countries where they have established their company (Schwartz, Nelson and Chen). All the governments also benefit from the taxes paid by apple; hence it will be selfish for the United States government to argue out that Apple should only pay taxes to the U.S.
5. If Apple's CEO decided to change course and not take advantage of tax "loopholes" would that be a responsible or irresponsible decision for the company?
It is an irresponsible decision for the company. This is because the company will tend to pay more taxes than usual which may lead to the company incurring more significant loses. By not taking advantage of the loopholes too may contribute to a decrease in the company's income which instead of getting to the company's savings, will be used in the payment of taxes (Schwartz, Nelson and Chen). This may lead to a fall in the company's progress due to lack of enough funds to run the company. It can also lead to a decrease in job opportunities since it has companies' offshores that have created job opportunities.
Holtzblatt, Mark A., John Geekie, and Norbert Tschakert. "Should US and global regulators take a bigger tax bite out of technology companies? A case on Apple's international tax minimization and reporting strategies." Issues in Accounting Education 31.1 (2015): 133-148.
Schwartz, Nelson and Chen, Brian. "Disarming Senators, Apple Eases Tax Tensions" The New York Times 21 May 2013 https://www.nytimes.com/2013/05/22/technology/ceo-denies-that-apple-is-avoiding-taxes.html
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