"Apple And Other Tech Companies Make Billions But Pay Lower Taxes Than Middle Class Families"
Apple and several other major tech companies, including Google and Microsoft, have been pushing for what’s known as a tax repatriation holiday, which would allow them to bring money they have stashed overseas back to the U.S. at a much lower rate than the standard 35 percent. As we have noted over and over, a repatriation holiday enacted in 2004 just provided a windfall to corporations and did not achieve any of its policy aims. And corporations, of course, proceeded to stash even more money overseas in the hopes that Congress would adopt another holiday somewhere down the line.
And as a new report from the Greenlining Institute found, tech companies are already doing quite well when it comes to lowering their tax bills. In fact, the top 30 tech companies in the Fortune 500 paid an effective tax rate of 16 percent, after making $181 billion in profits last year. Apple, despite its billions in profits, is paying lower taxes than middle class families:
The tax rate paid by these companies has plunged – from 23.6 percent in 2009 to 19.9 percent in 2010 and 16 percent in 2011. The hypothetical top corporate tax rate of 35 percent is almost entirely a fiction.
The tax rate paid by Apple, the world’s most valuable company with a stock valuation that passed $500 billion in March 2012, has dropped even more dramatically. With profits soaring past $34 billion last year, the company’s tax rate fell from 24.8 percent in 2009 to 14.7 percent in 2010 and 9.8 percent in 2011. Apple’s tax rate over the last three years was less than that of middle-income Americans with average household incomes of $64,500 per year; its 2011 tax rate was lower than that of American households making an average of $42,500 per year.
Tech companies use a variety of activities, including shifting profits offshore to low- or no-tax jurisdictions to make their tax bills dramatically drop. And a Politico review of financial documents found that the companies pushing hardest for a repatriation holiday have moved hundreds of billions of dollars overseas, counting on Congress to provide them with yet another misguided tax break.