The scheme that Apple cooked up this week to finance a $55 billion stock buyback for its shareholders was orchestrated to avoid paying $9.2 billion in taxes, Bloomberg reported Friday.
That $9.2 billion tax bill that Apple dodged would have been enough to make unnecessary all of the major budget cuts we’ve been writing about this week as part of our “Repeal the Sequester” campaign. With $9.2 billion, the federal government could have (based on lists compiled byThe Washington Post’s Wonkblog and Think Progress):
Apple was able to do this because of techniques it uses to keep its U.S.-made profits offshore, and because of provision in the tax code that allows it to deduct interest it pays on money it borrows. That’s a double whammy: It does not pay the taxes it should on the money it earns from all of those i-whatevers we buy (including the Macbook Pro I am using to type this post) and it gets money from the government when it borrows money from a big bank rather than using the money from its overseas stockpile.
Apple makes great products, but the obscenity of its use of the tax code to avoid paying its fair share for the functions of government that make its success possible is only exceeded by the tax code itself and the nexus of ideology and corporate greed that created it. This latest news from Apple underscores the need to end corporate tax evasion – not with lobbyist-written schemes like the “territorial tax” that would essentially engrave offshore tax dodging into the tax code but with fair, more progressive tax structures that require corporations to pay taxes on their earnings just as working people must by April 15 every year.