Apple tax practices— rotten to the core?

Apple Inc. has been found using loopholes to avoid paying billions of dollars in taxes and keeping that money as profits.  The worst part: It’s completely legal.

Our corporate tax laws allow this to happen, while our citizens muddle through a recession and the U.S. government scrambles to borrow money, cut programs and besmirch social institutions in order to pay for an ever-increasing national debt.  

This begs the question: Have business ethics made for the legality of immorality?

The answer, of course, is a complicated one. Apple Inc. represents a strange paradox within our corporate tax system, wherein the products of our increasingly virtual consumer world still have physical world value. Ideas and digital media are just as viable for intellectual property protection as manufactured goods, but the distributers of digital property have a lot more freedom deciding where to sell from.

And where you sell from determines where you make your profits and therefore where you pay taxes.

“The growing digital economy presents a conundrum for lawmakers overseeing corporate taxation,” The New York Times reported. “Although technology is now one of the nation’s largest and most valued industries, many tech companies are among the least taxed, according to government and corporate data.”

For Apple, this means that $2.4 billion that would otherwise have been taxed last year is kept as profit. Billions of dollars that the government could have used for improvements in infrastructure or invested in the faltering education system are now completely unavailable.

Some argue that Apple has the right idea in keeping their profits, simply because the government cannot be trusted to handle that money right now. With the current cost of two wars totaling near the trillions, it seems most likely that any extra cash our representatives get their paws on is going directly into the war chest.

It is easy to defend Apple because the people associated with the company are not only innovators but are considered the “most innovative” people on the planet. Apple hires the smartest people in the world to create products that you do not have to be smart to use. And, believe it or not, this is incredibly hard to do.

So Apple Inc. invests more in product innovation than anybody else, because they are more committed than anybody else to creating the most “perfect” product available.

And with chief executive Tim Cook’s newly applied dedication to philanthropy added to the company, Apple Inc. has managed to become a seriously profitable, socially responsible source of high revenue in an economy that is not necessarily conducive to successful technological advancement.

Plus, they are not doing anything illegal, and if they were smart enough to figure out how to keep the money they generate from becoming government fodder for waste and war, then more power to them.

Besides, if Apple makes higher profits, then company shareholders make more money. That money is taxed on an individual basis, so eventually some of it will land in government hands, anyway. And those shareholders will most certainly spend the money on material goods, which puts those profits back into the U.S. economy.

It is trickle-down economics at its best. (Of course, that assumes that people receiving corporate dividends don’t just decide to reinvest that money to turn it into an even bigger profit.)

But even if all of that were true, even if Apple Inc. is a stanchion of growth and development for the recovering U.S. economy, the problem remains that people in America feel corporate want trumps individual need, and Apple’s abuse of tax codes proves that.

Outside of their many contributions to technological innovation, Apple has unfortunately innovated new means of “technically legal” tax evasion that have paved the way for other corporations to follow suit.

Apple has created a division within the company whose sole purpose is to save money by undermining tax laws through loopholes and manipulation of bureaucratic procedures. According to The New York Times, “Today, that tactic is used by hundreds of other corporations—some of which directly imitated Apple’s methods.”

Apple and other corporations have contributed greatly to a diminished sense of individual self-worth in our culture by valuing stockholders more than ordinary consumers.

In our country, corporations are seen as the platform of competitive innovation and are given a lot of freedom as a result. Stockholders can partake in the benefits of American corporate favoritism simply by already having enough capital to invest. Then they get to reap the rewards of unfair tax loopholes to make more money.

And because, as statistics show, the rich keep getting richer, the practice of corporate favoritism amounts to shuffling around enormous sums of money within a tiny portion of the population.

At one point in time, corporations were highly specified institutions designed to accomplish certain tasks in innovation or to serve the public interest. They were not intended to be unregulated money factories for their developers. They would not have been given more rights than citizens, because to do so would be ultimately economically unsustainable and morally reprehensible.

Apple takes advantage of American freedoms, resources and government support and incentives to create its technology. So does it not ultimately seem disrespectful to try every means necessary to avoid paying American taxes?

The biggest issues raised as a result of Apple’s current tax scandal are not ones of tax codes and fiscal responsibility but of the accepted amorality of the modern corporation.

Our nation’s warped sense of ethics in business can very easily affect our country’s general moral capacity. If corporations continue to remain unchecked to collect endless profits, then people must understand that there will never be equality. It simply cannot happen.

Because acceptance of current corporate practices as legal, or even normal, means that people must consider money to be the ultimate source of good. If making money is always good, then any means of making money is good. If your value is determined by your ability to invest in a corporation, then that automatically devalues those that cannot afford to invest.