Apple Bites Man

The talking heads are all abuzz about Apple. It seems that Apple has not been paying its fair share of taxes . . . or so they say. Just what is the fair share tax on a corporation? I had thought that everybody who is anybody had already heard that corporate taxes are double taxes. For the owners of corporate shares, their income gets taxed once at the corporate level and again at the individual level. So effective tax rates are much higher than they appear. My feeling is that there should not be any corporate PROFIT tax at all. This does not mean that there should be no corporate tax at all. Instead, it would be reasonable to impose a small tax on corporate gross income as a user fee for the privilege of limited liability protection. Of course, this would suggest that LLCs should also face the LL tax. Oh, maybe there should also be a user charge to cover the government costs of regulating public markets. One might assume that this would be levied on stock valuation. Of course, the regulation charge would not apply to LLCs.

The idea that Apple Corporation should be demonized for holding funds in international tax havens when it has legitimate international business dealings is simply preposterous. If you want Apple to move those funds to the USA and spend them here, then get rid of the conventional corporate tax. Some might say that Apple should “return” the funds to the USA, but those funds were generated outside the USA. The word “return” just doesn’t apply.

Let’s substitute the limited liability tax and possibly the public markets user charge as well. The cost of compliance would fall. The playing field would be leveled. The economy would prosper.