So, 425 million in taxes paid to Australia for the past 5 years is not contributing? That's the amount the story you link to states they paid once you do the math.

You may say that's not enough but by their accountants, that's what they were legally obligated to pay. You can't blame them for looking for loopholes to avoid paying more than they have to. Matter of fact, they owe it to their share holders to make the company as profitable as possible.

I doubt there are others that would voluntarily pay more taxes than they are obligated to. If they did, I would wonder about their sanity.

Oh yeah, they're dangling alright.  Given some of the bullshit they've espoused in recent years, them fellers in the EU hierarchy 'd have to have balls that big they'd have no choice but to dangle.

If they were not fiddling their books and 'hiding' 6 billion a year in profits offshore they'd be paying about 5 times that much.

Call it 'clever accounting' others call it 'rorting the system'...no different to sneaking yourself OS to somewhere where there are no extradition agreements to avoid criminal prosecution.

ONLY the shareholders [and the well-paid accountants] are on the side of 'that's clever, Apple'.

HONEST people pay their dues.

I did say "worthy of mention".... and what I mean by that is that Apple has extracted billions upon billions in that time, and the tax it paid on those earnings is a piddling amount in comparison.  In other words, Apple betrayed its Australian customers and the Australian taxpayers by shifting the bulk of its profits to offshore tax havens... meaning the onus is then shifted to the people who supported Apple to make greater contributions... and while all this may seem piddling when compared to the US economy, which spends more on its war machine than Australia does on its entire budget, we have a population of a mere 21-22 million and Apple's cowardly and deceitful behaviour is taking food off the table of our poorest families.

Oh, and the key thing here, is that Apple hides its ill-gotten gain in tax havens where is cannot be retrieved by tax collectors, etc.  That suggests there is something quite wrong with the practice and is likely illegal

So by this you are saying it's perfectly okay for big corporations to cheat on taxes, thus placing greater onus on the average Joe to contribute more to prop up government tax coffers?

I hope not because it's the kind of attitude that eventually people suffer for.

isn't it common internet knowledge that the people that buy premium products are naive and uneducated, while the smartest people on the internet live on welfare?

sure, there's a lot wrong and immoral with multinational corporations and globalization. 

i am just not sure if the world would be a better place without it. it might well be, but it would require us to follow the Bhutanese concept of Gross National Happiness instead of Gross National Product.

now the people in Bhutan really seem to be happier than us westerners, but the standard of living is also a lot lower.

It's not 'cheating' if it's perfectly legal.  The home mortgage interest deduction is a 'loophole' - must someone decline to take the deduction in order to be 'honest' now?

The whole point being missed here is that Apple hides its profits in tax havens where it can't be touched by tax officials trying to recover unpaid taxes.  These are the key words 'hides' and 'tax havens'.  Now if Apple had done everything legally and by the book, why does it see the need to deposit billions upon billions in these 'untouchable' tax havens?  Why can it not leave those funds in their respective countries to be assessed for tax payments at the going rate?

I suppose it's okay for Apple to do this in Australia, New Zealand, the UK and Europe because... well because the US isn't being cheated, and that some how those funds will pour back into the US economy.  WRONG... on both counts:

Firstly: this practice of hiding profit is NOT confined to Australia and etc.  Apple also does the same thing from its US based operations.  I mean, why would it not follow the same practices as in it overseas based businesses?  This means, then, the US public/taxpayer is being cheated just like we are... because there's a huge vacuum in the economy - as in the taxes received books just don't add up - and somebody has to fill it to pay to top up the government's coffers so it can fund the huge war machine.

Secondly; Apple hides its ill-gotten gains in Ireland... meaning the money it stole from us and others does NOT benefit the US economy.  No, it goes to benefit Apple and its shareholders.  So, if anybody thinks that is okay, do they also think Apple and the shareholders who have become wealthy are going to pump any of  that money into the economy to benefit the average bloke?  No on both counts... because those shareholders will have learned from Apple just how to keep it all to themselves.

What I find truly preposterous is when ordinary people - many of whom do not have alot - will say that it is perfectly alright for corporations to cheat on their taxes... to find loopholes so as not to pay the proper amount due.  Firstly, that tells corporations that what they're doing is okay and that the public supports it.  Secondly; governments do not fund themselves, so whatever the corporations refuse to pay on their huge profits eventually comes from the ordinary bloke trying who is often struggling to feed, clothe and house himself and family.

So, having said that, I defy anyone to say that it is absolutely 100% fine with them to pay much higher taxes because the corporations are not paying their dues

They can't very well be 'hiding' anything if you (and apparently everyone else) know exactly where it is, now can they?

They also didn't steal anything.  They didn't put a gun to anyone's head and force them to buy their products.  If they've violated Oz law, Oz should put 'em in the dock.  Your venom would be better directed at your own government, which is who should be determining what 'fair' is - not you or me.  We can dislike Apple all we want but 'your fair' and 'my fair' may be wildly different.  Hence the evolution of 'government of laws' as opposed to 'government of men*'.

*Not that we're practicing what our Constitution preaches much these days, but I still kinda like the document.

You pay the 'dues' either way, you're just not willing to acknowledge that.  Easy to concentrate your anger at a single wad of cash like $6B, while 300 million people paying an extra $2 each to cover the tax flies totally under the radar.  Who gives a shit about $2, right?

Okay, be argumentative; however, the only people who know exactly where the money is are Apple and the bankers holding it, thus it IS hidden from the various tax authorities.

No, because it has tried to bring Apple to task, but Apple keeps avoiding the issue by throwing lawyers at it to create smoke screens, hence my venom, as you call it, is very much pointed in the right direction.

Okay, so it's okay for Apple to cheat on its taxes so you, who is in a lesser position to do so, have to pay more.  And it's not that I don't acknowledge having to pay dues where applicable, I know that and do so when required.  However, what I do protest is that people like me, just ordinary folk, have to pay more because companies like Apple do not pay their dues as required.

Anyway, it's pointless arguing with you - it's fine for Apple to cheat, lie and steal - so I'm outta here.

No need to be so touchy, starkers.  We have a difference of opinion about who actually 'pays' when it comes to corporate taxes, but I still love ya.  Nothing personal here.

For one thing, I'm not so sure us little folks are truly in a 'lesser position to do so'.  Actually, it's just that you know about Apple's behavior but you know nothing about how much I 'cheat' on my taxes.  I've actually long been rather more lackadaisical about reducing my taxes than I should have, but damn near everyone I know 'writes off' every restaurant meal they eat & takes all sorts of other dubious deductions to reduce their tax bill.  I've only this year gotten round to setting up an S-Corp as a legal vehicle to reduce my tax burden.  Does that now make me a dishonest tax cheat?  As I said, it's just a matter of scale, not a matter of principle.

And I don't understand how the Oz government has so little power or authority to address the issue.  If it can't simply enforce existing tax laws, seems there would be lots of things it could do to raise the cost of Apple doing business in the country & effectively claw back what you consider to be its 'fair share'.

Furthermore, we're talking about squeezing a balloon - it's gonna expand somewhere else.  Corporate taxes come out of consumers' pockets in the form of higher prices for all consumer goods across the board.  The consumer is paying the tax in all cases as corporations can't simply print money (unlike governments), it has to come from their customers.  If government needs a certain amount of cash, it's going to come from taxing lots of people a little, or fewer entities a lot, or a mixture of the two.  We could debate forever what the 'fair' balance of those should be.

I want to chime in here because from reading this discussion it seems apparent that most people aren't aware of how deliberately the tax system is setup to be gamed like this.

The Double Irish

The tactic used by Apple (and Google and countless others) is called the Double Irish.  Our own accountants recommended we do this for Stardock and Impulse a few years back but I rejected it on principle.

The way it works is as follows:

1. You have an American company (Apple, Google, etc.)
2. You create an Irish (or one in Denmark) that has no taxes on royalty based income
3. You create a Bermuda based entity that has no income taxes

You then assign the IP to the Bermuda company and have the licensing company be in Ireland or Denmark.  The sales of *licenses* generates royalty income which aren't taxed in Ireland or Denmark and the proceeds then go to Bermuda which aren't taxed.

The money is "outside" the United States but that's not relevant anyway because there's another part that the media doesn't talk about because, well, most people get lost at the complexities of this but here it is:

The last part is the key: The government has been buying up treasury bonds through a process called Quantitative Easing (QE).  This has the effect of lowering interest rates massively. For example, Stardock's credit lines have a 1.51% interest rate -- lower than the rate of inflation.  So what Apple, Google, etc. do is take out loans using the assets in Bermuda as collateral. This is the real "Buffet" rule btw as he's the one who has made this technique popular.  

The Bermuda assets are put into an investment portfolio that returns much better than 1.5% (the S&P 500 was up 25.5% last year -- thanks to QE) and increases in your portfolio are not taxed at all because they are unrealized gains (they only become capital gains when you sell something).

It's not the main issue

The entire debate gets sidetracked because Republicans lamely argue that the way around this is to lower corporate taxes which would do zilch to solve this and Democrats whine about evil corporations even though they are the ones pushing QE which is the real source of this issue.

Now, as a "rich" person, I love QE.  No one has done more to increase the wealth gap in recent years than our beloved President who continues to support QE.  QE causes interest rates to decrease and because of the devaluated dollars causes the stock market to go up.  

This means that a company is better off investing in the market using their portfolio as collateral to obtain super low interest loans than they are hiring people. And yet, we have politicians complain that companies aren't hiring even though they're sitting on a pile of money.  Well not shit. That's because it's more profitable to invest their profits into the stock market than it is to hire.

Quantitative Easing is the real issue

It's a simple IF/THEN question:  IF S&P 500 rate - Interest Rate > Natural profitability of the company THEN invest in stock market instead of employees.

When you can borrow at 1.5% using your investment portfolio that is generating >10% per year (25.5% last year) as collateral then the only way you hire employees is if your company's normal profit margin is pretty decent.

Last year was a good year for Stardock.  We had Start8, Legendary Heroes, ModernMix, etc.  And yet, from a profitability stand point, our unrealized gains (untaxed) from our investment portfolio was our most profitable "product" last year. 

If Stardock were a publicly traded company, I would have been fired for aggressively hiring and creating the SSIF (Stardock investment fund for new game studios) because I can borrow at 1.5% (and do, every day, we have an 8 digit credit line) and use our 8 digit portfolio as collateral and plow our profits into increasing that portfolio instead of hiring.

What is the solution?

There is no easy solution. That's why nothing has been done about it.  QE is supposed to go away. But everyone's addicted to it. EVERYONE. While rich people can get loans at 1.5%, even middle class people can borrow at 4% which is amazing.  It would be tough to return to the 7% norm.  Similarly, the rich and connected would very much dislike seeing their portfolios return to the 8% historical average.

Ireland and Denmark have a vested interest in keeping this system going because they are getting some income from this arrangement.  Bermuda also loves this arrangement.  The US is not really in a position to eliminate the corporate income tax and lowering it to say 20% or something more reasonably would do very little to change any of this.  It's hard to compete with "free".

It took us years to get into this situation and it'll take years to get out of it.  But perhaps if people learn the realities of our system and realize that our President is just as much part of this scheme as the biggest Wall Street insiders people will pay more attention to the politicians rather than blaming corporations.  

Next time someone bitches about the gap between the richest and poorest ask them if they voted for the guys who advocated endless QE. Because nothing in our lifetimes has exacerbated that gap than QE.

Corrections:

S&P 500 was up 29.6% for 2013, not 25.5%, Down Jones was up 26.5% (our portfolio was only up 25.5% because it has a lot of bonds in it and is generally more "conservative").

Thanks for that, Brad.  Is there any real 'value' in those unrealized gains, then, since it's all coming from printed/devalued dollars?  Or is it just in the difference between the interest rate and inflation?

Absent QE, the relationship between corporate taxes and prices should still apply.  But then, we're not absent QE.

Thanks for taking the time to put that together.  Enlightening.