Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Wednesday, May 22, 2013

Apple's U.S. Tax Bill Over Three Years Was $8.4 Billion Lower Than The Company Told Investors: Senate Report

Apple's actual U.S. tax bill is far lower than the company tells investors, according to a Senate panel report.

The Cupertino, Calif. company under fire now for its tax strategy, paid $8.4 billion less in U.S. taxes over a three-year period than the company told investors, according to the report released earlier this week ahead of CEO Tim Cook's testimony before the Senate.

All public companies estimate their tax bill in earnings reports and overestimates are common. However, what's unusual in Apple's case is that the difference between the company's stated tax bill and the amount it actually paid grew between 2009 and 2011.

“The differences widened substantially over the three-year period, expanding from a 2009 difference of $1.4 billion to a 2011 difference of $4.4 billion,” the report said.

As the report notes, there are legitimate reasons for the discrepancy; companies tell shareholders the amount they’ve set aside to pay U.S. taxes, but often that money doesn’t end up with the IRS immediately or ever. That’s because companies are required to report to investors and the SEC how much they think their taxes will lower their profits, but are often able to reduce that liability through a variety of legal creative accounting strategies.

For example, a company may tell investors how much money it would owe in taxes on profits housed overseas if the company brought that cash back to the U.S. But often, as in Apple’s case, the company has no plans to bring that money back home.

Apple didn't immediately respond to an e-mail message seeking comment.

"It's very dangerous to use a company's stated tax expense to make statements about what it actually pays in taxes," Douglas Shackelford, a University of North Carolina expert on taxes and accounting told Fortune in a report last year.

The finding was one of many in the Senate report that focused largely on the Irish subsidiaries Apple uses allegedly to avoid paying taxes on billions in profits to any government.

Apple’s CEO Tim Cook told the Senate panel in a hearing Tuesday that the company pays “all the taxes we owe.” Apple paid $6 billion in U.S. taxes for the fiscal year ended in September, according to the Wall Street Journal and Cook claimed in the Senate hearing that the company is the “largest corporate taxpayer in America.”

Original Article
Source: huffingtonpost.com
Author: -

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