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Elizabeth Warren: Apple's Tax-Shirking Schemes Show Congress Must Reform US Code


#1

Elizabeth Warren: Apple's Tax-Shirking Schemes Show Congress Must Reform US Code

Nadia Prupis, staff writer

The ongoing Apple tax scandal in Europe is the perfect opportunity to reform the U.S. tax code, Sen. Elizabeth Warren (D-Mass.) wrote in an op-ed for the New York Times on Thursday.


#3

Wonder why the focus on Apple? Is Apple the only company dodging taxes by off-shoring money in Europe?


#5

Is anyone using these comment threads to gather information? Tax Reform will no doubt be a big congressional priority after the election, no matter who wins. The key question is, how do rational folks in the progressive and independent citizenry of the U.S. learn who, what, and why about the myriad of competing proposals that will be pushed onto the congressional meat grinder, and what influential options exist along the way to insure that as reform proposals go forward, the inevitable mistakes are headed off and prevented?

I would love to see Common Dreams commission a series on the history of tax reform, perhaps starting with academic works in progress on the issues.


#6

Every solution you proposed Sen. Warren is a good one, but what about clawing back the taxes already owed to us by the multinational corporations on the $3.2 TRILLION dollars they have sitting offshore?
How do you propose that we get that done?


#7

Apple is just the most currently visible of the tax dodgers, but this has been going on for a very long time. And, it's one of the reasons that we are always burdened by degrees of austerity, none of which is our fault.
The practical matter of the IRS not collecting (mega) taxes owed by corporations speaks loudly for itself.


#8

Watching Obama, and now Clinton making quarterly trips to Silicon Valley, Seattle and other tech/power centers to collect bundles of money from their bag men assures that nothing will change. Prior to Bill Clinton most POTUS domestic travel was to make public appearances. Today trips to meet bag men far exceed the trips to make public appearances.


#9

Typical to go after the big, well known companies. Just like groups go after employers like McDonald's or Wal-Mart for labor violations, or Exxon for environmental problems.


#10

Mega tax breaks are available only to big companies, well known or not.

Ever since bipartisan 1986 US tax "reform" passed the tax advantages for the largest corporations improved exponentially while the tax rules for individuals and small businesses became more onerous.

Many corporate mergers were and continue to be driven by the tax advantages bigger corporations get, with the ultimate goal being to become a too-big-to-fail corporation like the Wall Street banks where you get taxpayer funded mega bailouts on top of the preferential tax treatment. Since the advent of Obama's ACA drug and insurance companies have been on the biggest merger spree those industries have ever seen. They are anxious to add bailout profit centers.


#11

YES! Let's get serious NOW. We finance these big corp start ups then get screwed on badly needed funds for upgrading and democratically broadening our public education. ALL our young people should be entering and more than simply passing through 12 to 16 years of poorly funded, staffed, supplied, unenriched coursework and facilities. For too long teachers have had to make do with the scraps in overcrowded classrooms. We're the biggest joke in the developed world of education, while we're the richest nation. Americans work long hours and pay our fair share of taxes AND SUBSIDIZE these tax traitors. Let's quit letting them steal from our children's future and us!


#12

Senator Warren is an expert on tax distortion. She writes, “In the 1950s, corporations contributed about $3 out of every $10 in federal revenue. Today they contribute $1 out of every $10 …”. In fact, most corporations have elected to be taxed on individual returns of shareholders. Her omission leads readers to think that the corporate tax rate should be tripled. The nominal tax rates of 35% produce lobbyists and tax expenditures.

In the big picture there is nothing wrong with letting corporate owners pay a bit more based on stock value and letting the corporate entity pay a bit less. If Warren is really interested in U.S. jobs she should support a replacement of the job killing payroll taxes with a small 4% VAT. Warren and her liberal friends need to understand that taxing all three tax bases: net wealth, income and consumption can produce the same revenue with low tax rates and without the need for tax expenditures.

Consider a tax blend - a taxpayer choice of income tax rate between 8% and 28% paired with a wealth tax rate of 2% decreasing to zero. Each taxpayer would also be able to save up to $500,000 wealth tax free for retirement, health care and education; and combined payroll taxes (now fixed at 15.7%) would be eliminated. Social Security would be funded by a 4% VAT and 8% C corporation tax with no tax expenditures. Cumulative wealth taxes could be used to offset estate and gift taxes (set at 28%) – finally making the Estate Tax fair to all.


#13

I am sure Hillary discussed all this with Tim Cook at the fund raiser he held for her??

How does apple generate such profits????

Its amazing how this company and many others so benefit from open trade and a strong defense dept yet are the ones who try to pay as little as possible.


#14

Exactly, so why is she even pretending to care about it since she endorsed Clinton, and campaigned with her. She is just another hypocrite I could never trust again. Hopefully the people of Mass will remember what she did to Bernie the next time she is up for re-election, because he was the actual primary winner in Mass. They are one of the 17 states that had proven election fraud in Clinton's favor!


#15

a) Because the EU attempted crackdown on its Irish tax "avoidance" was in the news.

b) No but it is the largest......holding over $200 billion in deferred profits offshore out of the $2 trillion total being held by U.S. chartered multinationals.


#17

C corporation profits were about $2.1 trillion last year and they paid about $350 billion in federal corporate income taxes........about 10% of the $3.25 trillion paid in total federal taxes. Had they paid 35% on that $2.1 trillion pre-tax profit, they would have paid 22.5% of total federal taxes.

Moving from a payroll tax to a VAT would only increase wealth inequality. If the amount saved by the employer in payroll taxes were passed on to the employees in the form of higher wages instead of being used to enhance profit that would be fine, but nobody, I'm sure, thinks that would happen. The final consumer ends up paying the entire VAT.

How about a 2% wealth tax, but only on the approx. $20 trillion in wealth held by the wealthiest 0.1% with a minimum net worth of about $25 million? Per Pikketty and Saez, the wealth of this group has grown at 6% compounded since 1980 so they should continue to get even wealthier in spite of the tax. They now hold a mind-boggling 22% of total U.S. personal wealth (up from 7% in 1980). This tax would only slow the growth in their share of total wealth held.


#18

Yes, this crazy talk will stop once the Queen of Chaos gets crowned and Warren will be told to get with the freaking program! It is all a sham. Hopefully, the people of Mass will send Warren packing next time around.


#19

Apple is a complete disgrace. it makes so much money in its greed but refuses to contribute to the "general good" anywhere it is; instead wants to avoid any responsibility. Allowing this while the rest of us pay (except other greedy corporations) is "nuts" as Warren says.


#21

Not sure there is much Warren can do to give me faith in her again. I wonder if she was EVER a free agent.


#22

She can't be trusted, it was likely a confidence game all along.


#23

You might want to look into govtrack.us. You can find bills there, including searching by sponsor and subject, voting records, etc. It might appeal more to serious policy wonks, but it can be useful for finding things sometimes.

When it comes to taxes, there are so many exemptions and exceptions that it's almost impossible to actually keep track of the details unless you're willing to commit a good deal of time to the matter. Mostly, we're just going to get the highlights--general tax rate information and bigger changes to existing law, like if they made significant changes to the carried interest tax deduction or something like that.