Apple ducks taxes - just like every other corporation

Posted on Tuesday, May 1st 2012 at 1:18 a.m.

The New York Times recently ran a front-page story detailing how a combination of onshore and offshore business practices enable Apple to pay far less taxes than other technology companies.

The only problem is that the Times’ indignance is tempered by the fact that the practice is not unique to Apple.

The Times outlines how, for example, most of Apple’s cash reserves are invested by a subsidiary, Braeburn Capital, located in Reno, NV, rather than Cupertino CA.  Nevada has no corporate taxes, while California’s is 8.84%.  Apple also operates subsidiaries in Ireland, the Netherlands, Luxembourg, and the British Virgin Islands, allowing it to shave off even more of its effective taxable profits.

However, the practice of shifting around monies, controlling where profits and losses are booked, and various other practices are not only not unique to Apple, but pretty much standard practice for any large corporation, and certainly the standard for most of the technology-based companies on the S&P 500.  There are island nations in the Carribean that would be destitute if it were not for the billions of dollars in American capital sitting in them.  GE’s Jack Welch once theorized that in the future there would be floating factories that would move to countries with the lowest taxes and least regulations in order to maximize profits.

Why has the Times put a bulls-eye on Apple?  For that matter, why has everyone put a bulls-eye on Apple?  I am no fan of the company - I think it is slowly becoming the new Sony, and not in a good way - but I’m perplexed about why perfectly rational people are laying all the ills of technology and capitalism at Apple’s feet.  It could be Apple’s sheer size, or its position in the zeitgeist as the “it” company.  Whatever the factor, I think that there are plenty of reasons to discuss the merits of Apple’s practices and products without singling them out for practices that many of its peers in the technology world engage in.

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