Stop Demonizing Apple About Taxes

Note: This post reflects my personal views, and not necessarily the views of my employer.

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There has been a lot of talk in the news and tech blogs lately about how Apple has practically made a science out of avoiding taxes.  Everyone seems to be eager to use this as ammunition to throw on the “Apple is evil and represents all that is wrong with corporate America” fire.  But it seems to me we’re all missing the bigger issue here.

There are two basic types of companies: non-profit and for-profit.  Since non-profit companies are, well, not being motivated by profit, they answer to their board of advisors and to their donors, who help to ensure that the money given to the company is spent wisely.  For-profit companies, of which Apple is quite obviously one, are a completely different story — especially when they are a publicly traded company.  Publicly traded companies answer primarily to their stockholders, who each stand to lose money if the company does not perform well.  Part of performing well is cutting costs.  And taxes are a big cost for any business, even the small ones.  Apple’s taxes in fiscal year 2011 were well over $3 billion.  And yet, without a lot of careful planning and strategy, they could have paid a lot more.  The critics are saying that they should have.  But why?

Here’s the deal, folks: Everything Apple has done to “avoid paying taxes” has (as far as anyone knows right now, anyways) been perfectly legal.  Apple is in business to make boatloads of money for its shareholders.  They would be financially irresponsible if they paid more in taxes “just because they should”.  If you feel that they should have paid more in taxes, then why not blame the real culprit: the tax laws of the U.S. and the other nations that allowed Apple to take advantage of loopholes in order to benefit financially.  We have all known for years that our tax laws here are broken.  And this is one very good example of why.  The fact that Apple is able to sidestep billions of dollars in additional taxes, and do so completely legally, is the problem.

Now, that said, I do think our taxes in many ways are way too high and need to be revised to begin with.  The government brings in more in tax revenue every year, and yet somehow, our national debt continues to significantly outpace our revenue.  But, as the saying goes: don’t hate the player, hate the game.  Apple isn’t to blame for following the rules that were laid out before them.

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