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Apple's (AAPL) effective tax rate of 14% is just a smidgin lower than IBM at 15% and Google...

Apple's (AAPL) effective tax rate of 14% is just a smidgin lower than IBM at 15% and Google (GOOG) at 17%. And Apple's hardly on the lowest rung: Amazon's (AMZN) rate is just 6%, Ford's (F) 3%, and Carnival's (CCL) just 1%. In trying to untangle what S&P 500 companies pay in taxes, David Leonhardt finds top executives are exceptionally shrewd at holding tax rates down. (infographic)
Comments (35)
  • what about GE. i understand their tax rate was negative
    25 May 2013, 04:31 PM Reply Like
  • Just for one year, in 2009 I think?

     

    The average 'effective' corporate tax rate in the U.S. is somewhere around 29%, per the infographic, though I've heard other studies indicate 25% and 27%. And though the chart doesn't give counts, it would appear that quite a few more companies pay less than the indicated average, with a smaller major outliers on the high side skewing the average up.
    25 May 2013, 05:29 PM Reply Like
  • GE carried forward losses from the 2008 meltdown just like any other corp, or person, would do if they had long term capital gains losses.
    26 May 2013, 11:11 AM Reply Like
  • It's Apple we're talking about, a corporation, not an individual. This Current isn't about the "rich and powerful".
    25 May 2013, 05:17 PM Reply Like
  • "Corporations are people" , my friend. so said Mit Romney.
    25 May 2013, 09:20 PM Reply Like
  • Ah yes, I've brought that up myself, nonetheless, we are not talking about "the rich" we're talking about a specific corporation called APPLE. I hate when threads devolve off topic into the land of political pissing contests.
    25 May 2013, 10:08 PM Reply Like
  • this is really BS---who claims the corporate tax rate is ever 35%===our w-2 earnings plus a lot of 1099s puts us in the top bracket--guess we need to be politician--hedge fund mgr---solar corporation --or non profit to lower or escape our tax rate--what a country--only the middle class really pats their fair share of tax--as the very rich have tax estate lawyers that set up offshore trusts etc to avoid taxes completely===rjm
    25 May 2013, 05:23 PM Reply Like
  • Just the difference between what is legal and what is right.
    25 May 2013, 05:27 PM Reply Like
  • midsnell, look on your Form 1040. Look at the amount on Line 22. That's your Total Income. Now scan down and look at Line 43. That's your Taxable Income. Are the two figures the same? No? That means you're using loophole and deductions to lower your taxes, just like Apple. Not only that, but if your Total Income was $100,000 and your Taxable Income was $70,000, you'd only pay 14% instead of the 17% you'd pay at $100,000, so we want the 3% back you should have paid without those loopholes.

     

    Not only that, but the NYT's figures are FAKE! Yes, shocking, I know, but their "infographic" is for 2007 to 2012, a time when many firms either lost money or had their earnings cut tremendously compared to the previous 5 years. By cherry picking the right 5 years, the NYT makes it look like most corporations pay very little in taxes while we poor muppets were paying a huge tax burden. They also left out things like worker's comp, unemployment, use fees, excise fees, license fees...you name it, all the other myriad fees that a corporation pays that individuals don't. I don't have the resources of the Times but I'd bet that using 2001 to 2006 as the time period and adding all the real taxes paid by a corporation, the picture would look much different.

     

    As for the middle class paying their fair share, the top 10% of income earners in this county pay 70% of ALL income taxes. The rest of us pay 30%. Even this is somewhat misleading, since about 47% (the figure that got Romney in trouble) pay nothing or almost nothing and, in some cases, get FREE money back. So since, 10% pay 70%, and 47% effectively pay 0%, that leaves 43% of the rest paying 30% of the taxes. In reality, the middle class gets a huge tax break compared to the wealthy. Sorry to burst your bubble, but that's the truth.
    25 May 2013, 10:34 PM Reply Like
  • Don't blame the corporations for trying to legally minimize their tax based on rules congress has created over the years. We all try to minimize our taxes short of cheating. If you follow the rules of the tax laws, they are giving you those breaks if you a smart enough to take advantage of them. To make AAPL the scapegoat in front of a Senate committee is hypocrisy when congress a) wrote those laws and b) every congressman and politician do the same to minimize their tax bill. Too bad AAPL doesn't take advantage of many environmental or clean energy tax credits (maybe they do) and their rate would be even lower and then congress again can complain - to themselves! Can hear it now - 'Mr. Cook, why did you you take a tax credit for producing your solar powered iPhones and iPads? Don't you have enough cash?'

     

    Re-write the corporate and individual tax laws, lowering rates and with far fewer exemptions and deductions.
    25 May 2013, 05:48 PM Reply Like
  • > when congress a) wrote those laws

     

    Actually corporate lobbyists wrote those laws. Just saying.
    25 May 2013, 05:58 PM Reply Like
  • sorry they didn't. We don't elect lobbyist's. Buck stops (or gets spent) by Congress. If congress takes my advise and written word and puts into law, they can take credit for it.
    25 May 2013, 06:20 PM Reply Like
  • > sorry they didn't.

     

    Yeah, actually, they did. Sorry, fact is fact.

     

    > We don't elect lobbyist's.

     

    But they still write your laws. And they basically tell your congress critters which way to vote, since they got them elected and can (and will) get them un-elected.

     

    Once you start to understand this, you will be on your way to understanding how your "government" really works.
    25 May 2013, 06:25 PM Reply Like
  • dont lecture to me about how government works. Fact is congress put the laws in the books from input from various groups and the president signed it - whoever it was. If you refuse to blame your elected officials for laws, god help you.
    25 May 2013, 06:45 PM Reply Like
  • congress votes on laws not lobbyists, lobbyists attempt to (and usually do) influence the votes.
    25 May 2013, 06:56 PM Reply Like
  • Everybody influences votes...by voting.

     

    Unfortunately, congress has not come to grips with the impact of the digital world - our political process remains primarily defined by geography.

     

    You would think Carl Levin, of all people, would understand this...since the largest city in his state, Detroit, was among the MOST economically productive places on earth not very long ago.
    25 May 2013, 07:38 PM Reply Like
  • I hate to say it but you are correct.
    25 May 2013, 07:46 PM Reply Like
  • And of course because of Carl Levin and his Democratic cohorts, Detroit has not become one of the most distressed, poor cities in the nation. If you take a look at the ten top cities in America facing bankruptcy, ruin, and default, they are all Democratically run cities and have been Democratically controlled for generations. You might think that in a democracy the voters would wake up and try something different by electing the other party as their city and massive union give aways slide into oblivion.
    25 May 2013, 08:52 PM Reply Like
  • > If you refuse to blame your elected officials for laws, god help you.

     

    If people refuse to understand that officials are elected by dollars and not votes -- god help us all.
    26 May 2013, 09:56 AM Reply Like
  • Szeducate..... Top 5 states with highest debt are 1) CA, 2) NY, 3) TX, 4) NJ, and 5) Illinois. Check governor of each state since 1980 and the majority in the governor mansion is with the republicans in all but 1 of the 5. Over spending is an issue with both parties, difference is on how it is spent, not which party. IMO.

     

    Also, 4 of the states above are the top 4 in population.
    26 May 2013, 11:26 AM Reply Like
  • Corporate lobbyists don't write the law. They "kickback" to the politicians to write the laws in their favor. Just saying.
    26 May 2013, 04:12 PM Reply Like
  • It sounds like we have someone representing the 99%. What are you doing on a board that talks to the 1% of us that worked hard, put enough money away to invest in stocks?
    25 May 2013, 08:47 PM Reply Like
  • I can picture the Fortune 500 CEO's giggling like school girls as they create Irish subsidiaries that pay tax in no jurisdiction and think they are somehow advancing their role in society. Why not spend their time creating products and services and pay the taxes due thereon? Tax avoidance is reasonable but going to great lengths to pay no taxes is inviting legislation that may not be attractive. I think corporate leaders should be ashamed to be seen in public as greedy, avaricious managers who care little about their role in support of the governments under and societies in which they operate.

     

    Taxes play a key role in keeping society functioning. Corporate leaders should strive for a balance between what is prudent and what is responsible. In the case of Apple, and perhaps the others mentioned, they apparently do not.
    25 May 2013, 11:28 PM Reply Like
  • Michael Blair -
    As a stockholder of a number of companies; if an executive is not trying every legal action to hold taxes down, I would seek to replace him/her or sell the stock. Not greed or avarice. Just good tax management and good business. As (I assume) you are a taxpayer, don't you or whoever prepares your taxes do the same? Or do you not take deductions on purpose so you won't be greedy?
    26 May 2013, 01:43 PM Reply Like
  • let me contribute.
    http://bit.ly/Z7IKJw
    25 May 2013, 11:37 PM Reply Like
  • Why is the government giving a company with a 300% markup/ insane profit margin a tax break?
    25 May 2013, 11:40 PM Reply Like
  • Chevron is paying over 30%
    26 May 2013, 01:15 AM Reply Like
  • just for ur edification our taxable income after all deductions still puts us in the top tax bracket---we have no problem with that except billionaire hedge fund mgrs. pay at a much lowerrate than average citizens where all their income is reported to the IRS every iear on W-2s and 1099s---Maybe A Flat Tax Or Consumption Would Better LEVEL the TAX PLAYING FIELD---Congress Has Zero Idea How All The Gimmicks They Pass For Special Interest Complicate The TAX CODE And Encourage Tax Cheating--RJM
    26 May 2013, 08:24 AM Reply Like
  • About topics dissolving into political pissing matches? Isn't that why AAPL execs were called before congress? To change the subject from IRS abuses, Benghazi incompetence, etc.? For statists to _itch about how the government doesn't get it's fair share? When did AAPL collect any of the stimulus? How much of the newly printed dollars of the tripled money supply did AAPL get? And when does the consumer not pay all tax and regulatory expenses of AAPL? Just asking.
    26 May 2013, 10:23 AM Reply Like
  • Just asking the right questions!
    26 May 2013, 08:19 PM Reply Like
  • Finger pointing at either Corporations or Congress solves nothing. Herman Caine had the only solution to our tax code mess - simplify tax codes so much that Lobbyists/Congressmen could not manipulate the code without publicity exposing their 'deal making' . The country would be a far better place if 40,000 DC lobbyists were unemployed and congressional campaign donations (bribes) were lower. Maybe then Banks would go bankrupt when they lost all their money? Wow, capitalism.
    26 May 2013, 10:49 AM Reply Like
  • @midsnell, the top marginal tax rate is 39.5% on incomes over $400,000 if you're single. Keep in mind that the tax rates are marginal rates. That means that you do not owe your rate on all of your income. For example, if you single, you earn $100,000 per year, you would not owe 28% on all of your income — you would not owe $28,000 to the federal government. You would owe 10% of $8,925, 15% of $27,325 (the difference between the top and the threshold of the second tax bracket), 25% of $51,600, and 28% of $12,150 (the difference between your income and the threshold of the third tax bracket).

     

    That calculation results in $21,293, or an effective (not marginal) tax rate of 21.2%. If you're saying you paid an effective rate of 39.5%, you are either earning at least $2 million a year (if so, congratulations), or you have the world's worst accountant. Assuming those billionaire hedge fund managers have most of their income from earnings or stock options, there's no way they wouldn't pay the top effective tax rate. Do you have any actual examples of these billionaires paying less than the top effective tax rate, or is this the kind of thing you've read about from other people who also have no idea what they're talking about?

     

    If those hedge fund managers actually make less than a billion dollars and are really partners or owners, they may very well end up paying a lower effective tax rate than the lucky few who receive a $2+ million dollar salary. That's because they own at least part of a business, and their reimbursement is due, at least in part, from the risks they take. Those risks usually include losing some money, which they can deduct, to some degree, from their taxable income, as well as business expenses to generate revenue. If you're an employee, your only risk is if the train to work arrives on time and if the company you work for can generate enough profits to pay your generous salary. I actually agree that a consumption based tax would be much better than our current system, but that doesn't negate the fact that the wealthy do, in fact, pay the vast majority of taxes, which is the point of a progressive tax system. If you're one of the wealthy (I'm not), pay your taxes and thank your lucky stars you don't live in Sweden, where you'd pay 90% of your income in taxes. You would, however, get "free" medical care. :-)
    26 May 2013, 10:52 AM Reply Like
  • Lets see. Fair share.
    330,000,000 people in the US.
    Fair share =1/330000000 per person.
    now that would be fair.
    26 May 2013, 04:14 PM Reply Like
  • When you think about how much Congress is lobbied by Special Interests why is this such a surprise. I've advocated "Flat Taxes" and wrote to my Congressmen for over 30 years to express this view. Look at the countries that have "flat taxes" as Hong Kong, they have one of the most dynamic economies in the world. When we lived there we paid a 15% tax on our income, period!! Steve Forbes has advocated a flat tax for years The very low income did not pay any taxes. Think about all the tax lawyers we could get rid of. Even if they earn this income overseas, the taxes should still be paid to the US. As individuals, my husband paid taxes to China, (then Hong Kong), the US and even the State of Arkansas. Why should Companies be treated any differently. Look to our "Paid Off" Congress and you can understand WHY.
    26 May 2013, 04:15 PM Reply Like
  • Let's recall hedge fund managers usually are "paid" in dividends, not earned income. 15%. Not so bad....
    26 May 2013, 09:01 PM Reply Like
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