Apple Paid $6 Billion in Federal Income Tax in 2012, 1/40 of All U.S. Corporate Income Tax Collected

Logo mintThe New York Times reports on a congressional investigation into the tax policies of technology giants, including Apple.

The Senate Permanent Subcommittee on Investigations is nearly finished with a year-long investigation into the methods that large technology companies use to avoid paying U.S. corporate income tax. Apple, for its part, allocates some 70 percent of its income to overseas affiliates where tax rates are much lower.

It appears that all of Apple's techniques are legal by U.S. law, though some politicians have said that corporations going to extraordinary lengths to avoid paying income tax and that they are violating the spirit of tax laws.

In its statement, Apple said it paid “an enormous amount of taxes” to local, state and federal governments. "In fiscal 2012 we paid $6 billion in federal corporate income taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government," it said.

Apple was one of the first companies to use the accounting scheme called a "Double Irish With a Dutch Sandwich", where profits are routed through Irish and Dutch subsidiaries before finally landing in the Caribbean. Now, hundreds of companies use those methods.

Apple also has moved revenue to its Braeburn subsidiary in Nevada and International locales where the company pays little to no tax.

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Top Rated Comments

Starflyer Avatar
149 months ago
At our current spending rate that will last us about a 1/2 day.

We don't have a revenue problem.
Score: 41 Votes (Like | Disagree)
blacktape242 Avatar
149 months ago
"and its gone......"

I hope someone gets that joke....:rolleyes:
Score: 29 Votes (Like | Disagree)
KPOM Avatar
149 months ago
The easy solution is to eliminate the corporate income tax altogether. Perhaps replace it with a small consumption tax on the ultimate buyer. At the end of the day corporations just collect taxes. People (whether customers, employees, or shareholders) ultimately bear the burden of corporate taxes.

Barring that, then just lower the corporate tax rate to what other countries have, and don't tax overseas income (most countries don't). The current system creates a perverse incentive for multi-national companies to leave their profits overseas, since they would wind up paying the difference between 35% and the foreign rate if they brought the money home. We gave a tax holiday to multinationals in 2004 and companies repatriated billions of dollars.
Score: 27 Votes (Like | Disagree)
sportsfan Avatar
149 months ago
What do you think would happen if corporate tax went away?

1. Corporations will lower their service costs
2. Pocket it all for Upper Mgmt bonuses
Score: 26 Votes (Like | Disagree)
brad.c Avatar
149 months ago
The easy solution is to eliminate the corporate income tax altogether
A good idea except corporations are given the rights of an individual. They should therefore pay taxes as such.
Score: 25 Votes (Like | Disagree)
skunk Avatar
149 months ago
Just goes to show how little anybody else is paying. Something's definitely broken.
Score: 25 Votes (Like | Disagree)