Government Should Thank Apple
Just a few years ago, Tim Cook and other Apple executives were dragged into Congress to explain why they were minimizing taxes. Huh? Isn’t that what all companies should do? Apple wasn’t doing anything illegal. It was legally dodging corporate taxes on much of its income by exploiting loopholes in Irish and American tax laws.
Tuesday, after the market closed, Apple announced record profits of just over $18 billion for its first fiscal quarter, which ended in December. This wasn’t just a record for Apple. It was an all-time record for any corporation in any quarter. What went largely unreported, however, is that the $18 billion figure is after taxes. In fact, if you look at the statement of operations, you will see that Apple’s provision for income taxes was $6.4 billion! That comes out to 26.2% of pre-tax profits.
Let’s put this into perspective. In 2013, the U.S. government collected approximately $2.8 trillion in tax revenues. Approximately 10% of that figure, or $280 billion, came from corporate tax receipts. That was for the entire year! So at an annual run rate Apple’s tax bill represents almost 10% of the government’s annual tax receipts from all corporations. You can bet government officials are trying to figure out ways to make Apple pay even more. Instead, they should get on their hands and knees and thank Apple!
Read Vahan’s blog at Janjig.com.
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