Apple’s Tax TroubleDamien Moye
Over the past couple of weeks, the IRS has been in hot water over unfairly targeting certain groups. In the past couple of days, the attention shifted to Apple. Apple is accused by the US government of owing a $74 billion dollar tax evasion bill.
The focus is now on Ireland. A U.S Senate investigation of Apple exposed Ireland’s many loopholes and blamed the European nation for being the iPod, iPad and iPhone maker’s tax haven. According to some reports, some companies registered in Ireland have no employees other than executives. Senator Carl Levin (D-Michigan), went so far as to say, “Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven… It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere.” Ireland is expected to be grilled by their European neighbors about their tax laws as well.
Keep in mind Ireland, more so than in most European countries, is dependent on foreign companies like Apple, Google and Intel. Apple denies any wrong doing. In fact, they turned the tables, claiming the gov’t needs to do better getting with the changing technology and economy. In their defense, Apple testifies over half their revenue comes internationally, these funds are needed to build internationally. They accused the US of charging so much in taxes, leaving them no choice but to go overseas.
I think there’s more at play here. Keep in mind our deficit is $17 trillion dollars. Would the US come down on Apple so hard if we had a $17 trillion dollar surplus? Apple has had a mixed couple of years. But now their stocks are coming back, now they’re dealt this blow? In the 1990s-early 2000s, Ireland was the gem of Europe. Now, their economy is so bad even their cherished pubs are closing down. Now their…ahem… ‘tax loopholes’ are coming under fire. What do you think is driving this Apple/Ireland scenario?