Page 2 – Do the Right Thing, Apple’s Good, and Final Thoughts
Do the Right Thing
But here’s the thing: just because we can do a thing doesn’t always mean we should do a thing. When we pay blind allegiance to corporate profits above right and wrong, we have lost our way. Tim Cook cites Martin Luther King, Jr. frequently about the importance of standing up for what you believe.
Timeless words from #MLK, “Our lives begin to end the day we become silent about things that matter.”
— Tim Cook (@tim_cook) January 19, 2015
Not paying local taxes is something that matters to me, and I’m a tiny, insignificant $AAPL shareholder. From city, county, and state deals where companies negotiate sweetheart deals, to corporate structures that shift where profits are generated, it may be legal to avoid taxes, but that doesn’t make it right.
Apple Does So Much Good
There are so many areas where Apple does enormous good—far, far more good than any other electronics giant, and probably any other for-profit company.
Apple goes above and beyond in minimizing its environmental footprint, even in countries where regulations are nonexistent or unenforced. Apple has also been aggressive and innovative in developing multitudinous renewable energy sources for its global operations.
Apple should be lauded for this, loudly and clearly.
Apple wrongly takes heat for its labor practices in China, when I believe the company should be praised for improving workers’ lives with higher wages, worker training, and constant monitoring of the companies it works with. No other American outsourcer I know of has taken such strong steps to protect worker rights outside the U.S.
Apple’s record on diversity is also outstanding, especially under CEO Tim Cook.
But local taxes matter. Roads matter. Schools matter. Housing authorities matter. Health care matters. Regulation enforcement matters. All of the things that support civil society matter. Apple’s profits are made possible by that civil society, and the company should contribute its fair share.
As should every other company, whether or not there are legals ways to avoid doing so.
And Finally
I’m not trying to pretend this is an easy topic, and I sure as heck won’t pretend to know precisely what Apple’s “fair share” is. But it’s clearly more than “nothing.”
According to The New Zealand Herald, “Had Apple reported the same healthy profit margin in New Zealand as it did for its operations globally it would have paid $356m in taxes over the period.”
That kind of money matters to countries the size of New Zealand. To me, Apple should kick in to help pay for the civil infrastructure it needs to make those profits.
And I won’t be silent about it.
Yes all this looks to be quite a ‘shock’ to NZ parliament 🙄
https://taxpolicy.ird.govt.nz/tax-treaties
Clearly others here know way better than the parliament 🙄
https://taxpolicy.ird.govt.nz/tax-treaties/role-double-tax-agreements
So much fun. 😀
And yet I’m still right and you’re still wrong. No bother by the way. 😀
Oops – John, not Peter. I don’t resile from anything else I said.
Kheit (you don’t deserve a title; neither am I going to call you Peter any more):
You barrelled in with all the charm and perspicacity of an Australian cricket captain or, dare I say it, a tangerine “reality” TV “star”.
– no you don’t. That’s pathetic rhetoric.
See above. Sarcastic, unnecessary, unpleasant teka. (I used a Te Reo Mäori word; it would have been censored otherwise).
You have said that you are ignorant about New Zealand. This is palpably clear.
1) Apple is incorporated in New Zealand, with offices in Auckland and Wellington. Under the Companies Act, Apple’s duties are to the company itself, its employees, its customers (via the Consumer Guarantees Act and the Fair Trading Act), and much further down, if at all, to its shareholders. What the situation is in the US is of no relevance.
2) New Zealand has a representative democracy, where we get to vote for parties that represent our interests. Many parties. (Virtually) Every vote counts. If you gave a damn about anything other than your own selfish views, you might like to take a look at that.
3) This has raised a lot of interest in New Zealand. There is widespread concern, especially after Matt Nippert’s exposure of (particularly) Apple’s tax avoidance, and there is a chance that it will have an effect on the general election later this year.
Don’t bother replying. I don’t care for you.
Bryan, there comes a point after reading this time and again I have to ask: What are you doing about it?
Who are you complaining to? A bunch of people who come to a website called The Mac Observer that are Apple fans to begin with? Even if there are people here who agree with you, what are you doing and what would you like people to do?
It’s like the boy who cried “Wolf!” one too many times. You are screaming into the proverbial hollow tube. What you are getting out is a form of an echo. To put it like my late mother used to: Stop kvetching and start stretching. What are you doing other than kvetching in so many words? Have you contacted your local representatives that control your state finances? How about your members of congress? Sure, they may be bought and sold by the lobbyists, but you can have an effect on them.
As a small business owner, I am not sure I agree or disagree. I know I do not get the same tax breaks as the larger companies but I also know that when I have a problem, standing on a platform and screaming is not going to help. I’ve been to Annapolis (my state capital) to speak with my representatives. I’ve told them personally what my concerns are for both my business and the changes in the laws that they are proposing to help but will hurt me in the long run. I’ve learned to stop kvetching and I am stretching out to work with the people who are making the laws.
My challenge to you is what will you do to start stretching? To start to make an impact? Otherwise, to borrow a quote from Macbeth, it’s all “full of sound and fury signifying nothing.”
@Laurie, in other words, I’m right. Since it’s “difficult” you can get some money or no money from them. That’s the deal your representatives chose to take. And now the public “knows” we look forward to your voting the politicians in the “RULING” and voted in party, out for your agenda now. Want to make a bet?
I love that you “disagree” with shareholder responsibility being ruled out by you. I’m sure that is of great police to the corporate officers when a shareholder suit is lobbed on them. I’m sure your post will totally put that in perspective during the law suit. Glad we have you on record as defender of truth and justice that is TOTALLY relevant to the real world. 🙄
John Kheit:
Politely: It is clear, as you say, that you know absolutely nothing about New Zealand. Up until Matt Nippert disclosed Apple’s tax avoidance, the extent of it was not known by the voting public. As the Labour Party leader Andrew Little has said, the ruling National Party has been asleep at the wheel over tax: Stuff. Labour itself has been lax in the past in stopping this, but National has had nine long years and still done nothing.
But it’s hard to do anything about it – these large multi-nationals (and it’s of course it’s not just Apple) shuffle their tax dealings around the world until they find a spot where they have the least tax obligations. It’s whack-a-mole. Until the voters and tax-payers where they are not paying their fair share know about it and decide that this is not acceptable and force their governments to enact laws to stop it, these companies will continue to do it. But voting for or against a party is a binary choice – it’s possible but rare to make that vote in a particular way on a single issue.
As for the companies responsibility for their shareholders overriding all others, I reject that as Friedmanesque ideology. It’s a cop-out. If companies want to do business in this country, they must follow New Zealand’s laws. And they can profit from it – there’s huge good will in being a good corporate organisation. Cartoon
Corporations have no business worrying about what is “right” and what isn’t in this matter.
Their obligation to shareholders is to do what is legal. To do anything else lands them in hot water. If they fail to obey the absolute scrupulous letter of the law they will have government agencies after them, costing the company more. If they choose to not take advantage of every law as written, if the choose to pay a “fair” amount” or “what is right” then they will have a shareholder revolt on their hands which will cost the company more. They might even get the SEC after them. Either way Apple is doing exactly what they as a publicly traded corporation have to do. They have no wiggle room in this regard.
@john kheit Hahaha, thanks to TMO’s resident lawyer and contrarian for weighing in on this.
Bryan, are you sure this is accurate? Even if Apple if Apple isn’t paying certain taxes such as corporate income tax to New Zealand, its sales are almost certainly taxed via the GST. If the GST is 15%, then the tax on $4.2B would be some $630 million, certainly not “zero.”
Bryan, I feel the issue is the same type of one that people complain about Apple not bringing back foreign profits back into the country. If people want different rules, then the government needs to change them. I don’t agree with not paying taxes. By all means support the locals. It seems that in many cases the common people are the least concern when governments make these tax laws and loopholes for corporations. There is another question, if Apple pays more taxes in a country, do they raise prices like they have in UK after Brexit referendum? Then what is the cause of that — possibly less sales, and then the net effect is less money
I think you are pointing at the wrong party. Apple didn’t write the rules/laws/tax rate. Those laws/rules were written by your politicians. Apple cannot change those rules. The politicians can.
How much should Apple contribute? 10%? 15? Everyone is going to give a different answer.
Shouldn’t there at least be some guidelines? – there are – it’s called the tax guidelines. And Apple is doing exactly what those guidelines say.
Apple is a private entity and is answerable to its shareholders. The politicians on the other hand, are answerable to YOU
You can’t change Apple. You *can* change politicians.
Bryan, could you be more thorough? What exactly is Apple’s corporate footprint in NZ? What corporate taxes are they “avoiding”? Are we just talking about retail sales profits? If the later is the case then Alan and Kiwi answered that moral objection. You cannot be arguing that Apple should be paying Corporate profit taxes in every country an Apple product is sold. I would think the board would fire Cook for doing something like that.
New Zealand collects a large (15%, if I recall) GST sales tax on every purchase. That is, NZ collects significant taxes for every Apple product sold in NZ. The real question has nothing to do with how and where taxes are collected, but how much. 15% is partially from retail markups, and is paid more directly by the consumer than a direct corporate tax, but the real question is how much total taxes should NZ be enriched by Apple business in NZ. Perhaps it should be a lot more, but I have no problem with what route the money takes to get to the government.
As a New Zealander I’m pretty sure this is an incomplete picture of Apple’s tax payment in NZ. While they may be using the law to avoid paying taxes on profits here as they do elsewhere there is also a little thing called Goods and Services Tax which is applied to all their products at the rate of 12.5%. So sales of their products here do contribute to the NZ’s government’s coffers as opposed to the claims of zero contribution made in the article.
Apple along with many others whilst following the rules may be legally right but it’s certainly not ethically right. The problem is the rules and the people who make them, the politicians. They could stop this tomorrow if the agreed to change the system but there’s too many interests, too much corruption involved. Given the apathy of the electorate this will never change.
Well I’ll give you a hint without knowing anything about New Zealand. Your lawmakers made laws like that. Either the majority of folks are actually OK with that and that’s why you have those lawmakers, or you need to convince or remove and elect other lawmakers to do what most people like. That’s my out of left field speculation.
Most loopholes, here and abroad, on taxes aren’t really accidental. They are enacted purposefully. Ireland new darn well what deal it was cutting.
Perhaps NZ didn’t, but if the law has been that way for multiple years, I’d guess that the govt knew what it was doing, and had its reasons.
I don’t know where the previous response is coming from. I would say amusing at very least. As a NZ RN I pay close to $1000 in tax. Locally owned businesses pay tens of thousands a month in tax to support the infrastructure that is quote “systemically underfunded”. Yet many overseas cooperations come here and literally take billions of dollars away from the economy by manipulating loopholes In the tax laws. The rest as to why this continues to be legal is completely beyond me and many of us here in New Zealand
Totally disagree. If Apple is following the law, then kudos to them.
Further, Bryan, the page views/ads this story, this website, and podcasts from it go to many other states where you guys do not pay taxes, yet TMO derives beneficial income from activities in all those states, and yet pays 0 taxes there. So I know it’s perfectly legal, and why I have no problem with it myself, since you don’t think such things are right, I look forward on your report of paying supplemental and non-necessary taxes there. 😀