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John Cruback
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John Cruback

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How Apple Sidesteps Billions in Taxes Around the Globe: Some Personal Reflections

If someone asked you how much Apple paid on $34.2 Billion in profits, what would you guess? Especially if you listen regularly to the right-wing rhetoric about how tax burden is unsupportable, how jobs are being destroyed because of excessive taxes, and how companies are being made uncompetitive by their tax burden? How much?

$9 billion? $10 billion? Nah. It's $3.3 billion, or a tax rate of about 9.8%. The actual figure is likely even lower, since "Apple does not disclose what portion of those payments was in the United States, or what portion is assigned to previous or future years."

Apple, of course, is not the only one. This front page article in today's New York Times singles out Apple as an example both because Apple is now about to become the most profitable company ever, and is one of the most aggressive in tax avoidance. But the article isn't unfair to Apple. It talks about a culture of tax avoidance throughout corporate America, and in particular, at high tech firms, which have the biggest opportunities for tax avoidance because digital goods and "intellectual property" can more easily be made to appear to belong to subsidiaries in low or no-tax countries.

Big companies have armies and lawyers who outfox tax collectors by taking advantage of a patchwork of conflicting tax regimes around the world. For example:

"Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies."

There's an expanded explanation of the Double Irish with a Dutch Sandwich later in the story. But this line gives one taste: "In 2004, Ireland, a nation of less than 5 million, was home to more than one-third of Apple’s worldwide revenues, according to company filings."

I highly recommend this story. It is truly eye-opening. I'm going to post a couple of the graphs from the story separately (Note to G+ - do allow embedded graphics and multiple links! With a storify-like interface, you could do this super-easily without making people need to know HTML.) The bar graph that shows Apple's growing profits versus their relatively static taxes is here: http://www.nytimes.com/imagepages/2012/04/29/technology/29appletax-hp-graphic.html?ref=business

Alas, it is a pale shadow of the version in the print edition, which is vertical rather than horizontal, and uses a scale that takes up 3/4 of the front page. Truly eye-opening.

This graph,http://www.nytimes.com/interactive/2012/04/28/business/Shrinking-Corporate-Tax-Rates.html?ref=business shows that the problem is not limited to Apple. As corporate profits have soared, the amount paid in taxes across the board has remained fairly flat. Clearly, the tax collectors are falling further and further behind the experts at tax avoidance.

But to my promised personal reflections

I can already imagine the comments of the libertarians and anti-tax advocates in the comments on this post. "Avoiding taxes is just keeping more of the hard-earned wealth you've created by being productive and successful."

But I'd like to suggest a thought experiment. Imagine that you and a large group of friends, or an extended family, decide to hold a reunion or big party that requires renting a space and some real expenses. You agree to share the expenses equally. Then one of you says, "I'm getting us a discount on the hotel from my friend, so I shouldn't have to pay my share." Another two or three say, "I'm helping with the catering, so I shouldn't have to pay." Another: "I'm willing to act as designated driver, so I shouldn't have to pay." Each time, you think, "Yeah, that's reasonable."

But before long, things get dicey. Three more people fail to send in their promised check for the deposit despite repeat nagging. The ten people who are left on the hook for the expenses say, "This is too much. We can't afford it." So you start by letting a couple of your friends, who you know are really hard up for money, off the hook. Oh sh*t, the problem just got worse for the remaining people, who now have to shoulder a bigger and bigger part of the cost (or put it on a credit card and hope that they will one day be able to pay it back.)

Somewhere along the line, you realize that you just can't afford the great party that you'd all had your hearts set on.

You have a choice: You can scale back. Or you can stop accepting all the special reasons why one friend or another shouldn't have to pay, share the costs as originally planned, and make it affordable by all working together.

Sometimes cutting back is the right choice.

But sometimes, working together, we can do things that are wonderful, that none of us could do alone.

Put it in the context of your family. Wouldn't those of you who had more resources support those who didn't? Wouldn't you shoulder more of the burden? You're well off. Your brother or cousin is not. They can't afford to make it to the family reunion, but you love them dearly. Would you help?

I can imagine the libertarians and anti-taxers again: "But that's your choice. The problem is that government has a monopoly on force, and makes us do this against our will."

Hold on: You all made an agreement in the beginning to hold this party. Then some of you decided you wanted to opt out of paying for it.

It's a bit more complicated than that, of course, because it was our ancestors who decided to hold the party, and agreed over time on how to split the costs, and a bunch of wasteful cousins ran up the tab. But we're still a family, we still care about each other, and we want to do right for each other. So we work it out, and try to be fair, and to the extent we can, generous.

That's how it is, folks. We can be a happy family, who look after each other and create joy and possibility through being together, or one that chooses to go our separate ways, and leaves a lot of happiness on the table.

P.S. I come from a large, close, and generous family. I grew up in a household where my father borrowed money to meet his charitable obligations. When my company nearly went under in 1985, my mother saved it with a loan of a large percentage of her liquid assets, with the only stipulation being that she'd ask for it back when I didn't need it any more, and someone else did. That became known in the family as a "mammy loan."

A few years later, that same money helped my brother to buy a house. As I became more successful, I paid it forward to other family members as well.

I look at families that are successful. They love and take care of each other, and are repaid in ways that make everyone happier.

I look at families that are unsuccessful. Everyone looks after number one, and they gradually drift apart.

I know which kind of family I want. And I want my country to work the same way.
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John Cruback

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A thoughtful article about the "esteemed" Nancy Grace ;-)
One thing I have noticed is her utter contempt for anyone expressing
contrary opinions on her show---very rude. I doubt a show like this
would be tolerated here in Canada.
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John Cruback

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Fernando Fonseca originally shared:
 
Why Google+ has become my primary social network

Full Disclosure: I am G+ fanboy.

I have been using Google+ since its Field Trial (I was here 4h after the invites started to roll out). While some pundits have, over and over, declared Google+ to be dead, I see nothing of the sort happening.

Like I pointed out, a few days ago, Ripples have shown beyond any doubt that users are using circles and that a lot of sharing and discussion happen within those

The main difference I find between G+ and other social networks is that G+'s users are here to share and discuss and they actually engage. (See graphic below).

I never have experienced the amount of engagement that my content generates here on Google+ and that, in a way, absolutely inspires me to create more content, be that a short one liner or more in-depth posts like this one.

At the moment my blog is being fed by my public posts here on Google+, by using +Daniel Treadwell 's amazing plugin, and I don't feel the need to produce specific content for the blog. Google+ has become not only my primary social network but also my canvas to produce new content that I then spread across other networks.

Google+, in these few months, has brought me knowledge, food for thought, inspiration and also a great platform to keep in touch with friends and business associates and I can't wait for the new things that the Google+ team has in mind for all of us.

Speaking of Google+ team, they are also one of the reasons why I think I have become so fond of Google+: the interaction that Google made possible with those that are developing, trouble-shooting, designing and managing Google's products here on G+ is nothing but unique. This democratization of access should be a case study to all social networks out there, don't you think?


#thezargon
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Kimberly Johnson originally shared:
 
Hello again everyone! Thank you all so much for your responses to the survey I posted Friday! (context: http://goo.gl/2V6cY) We’ve got lots of data to analyze now :)
I’ve closed the survey, and as promised, here are explanations of the terms we asked about:

What does it mean if a post says "Limited" next to it? Who can see it?

If a post says “Limited”, it is shared with a set of people that the user has explicitly selected (circles, individuals, or both). You can click on “Limited” to see how many people the post was shared with, and profile pictures of up to 21 of these people.

What does it mean if a post says "Extended circles" next to it? Who can see it?

If a post is shared with someone’s “Exended circles”, everyone in the poster’s circles can see it, plus everyone in their circles. It’s like your second-degree network, similar to “friends of friends”.

What does it mean if a post says "Public" next to it? Who can see it?

Anyone on the web can see posts marked “public”, including people without Google+ accounts.
Learn more about these: http://www.google.com/support/plus/bin/answer.py?hl=en&answer=1283790

What happens if you click “mute” on a post?

When you mute a post, you no longer get notifications about it, and it doesn’t bump to the top of your stream when new comments are added. Essentially, you’re ignoring new comments.
Learn how to mute a post: http://www.google.com/support/plus/bin/answer.py?answer=1253535

What does it mean to "lock" a post?

Locking a post prevents it from being re-shared, either explicitly or through +mentions or photo tags.
Learn more about re-sharing and locking: http://www.google.com/support/plus/bin/answer.py?hl=en&answer=1297219

What happens if you block another user?

When you block someone, they are removed from all of your circles, and they no longer appear in your stream (or your Incoming stream). Though they can still see your public content (same as signed-out users), they can’t comment on it. They also can’t +mention you.
Learn more about blocking: http://www.google.com/support/plus/bin/answer.py?hl=en&answer=1047934

What happens if you click “ignore” when someone adds you to a circle?

When you ignore someone, they are removed from your circles, they no longer show up in your list of people who’ve added you, and their posts won’t show up in the incoming stream. You won’t be notified of +mentions from them, either. Ignoring someone is different from blocking someone: for example, they can still interact with your posts (comment and +1).
Learn more about ignoring: http://www.google.com/support/plus/bin/answer.py?hl=en&answer=1619779

What does "Incoming" mean?

Your Incoming stream features content shared with you from people who have you in their circles but whom you don’t have in your circles (your regular stream only shows content from people you have in circles).
Learn more about your Incoming stream: http://www.google.com/support/plus/bin/answer.py?hl=en&answer=1322138

What happens when you share a circle?

When you share a circle, you share a list of the people who are in the circle at that time (the name of the circle is not shared). You can choose to share a circle just like you share any other post: with a select group of people, your extended circles, or publicly. When people see your post sharing a circle in their stream, they can choose to add some or all of these people to a circle of their own.
Learn more about sharing circles: http://www.google.com/support/plus/bin/answer.py?answer=1684780
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Keyan Mobli originally shared:
 
Reshare this post so we can test the new Google+ Ripples! The more reshares, the more interesting the graph.

So please, everyone reshare.

https://plus.google.com/ripples/details?activityid=TupMP3ZjqUg
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John Cruback

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Keyan Mobli originally shared:
 
Reshare this post so we can test the new Google+ Ripples! The more reshares, the more interesting the graph.

So please, everyone reshare.

https://plus.google.com/ripples/details?activityid=TupMP3ZjqUg
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Have him in circles
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John Cruback

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Google+ originally shared:
 
5 Cool Tips You Should Know About Google+ Pages

1. You Can +1 a Page to Show Support or Add Them to Your Circles

We know you love some brands and businesses. Others you may want to show a quick note of support, but not see all their updates. So just drop a little +1 and keep going, or add a page to any circle you want. You're in control.

2. No Google+ Page Can Follow You Until You Follow Them

We want Google+ to be a place you love to share. Pages cannot circle you until you follow them first. Of course, if you are in their circles, they can share great deals, exclusive coupons, product tips and hangouts, but the relationship is yours to start.

3. In Fact, Google+ Pages Can't Even Mention You Unless You're Connected

That's right. The +Google+ page can't even say your name unless you're following. No +mention spam.

4. Google+ Pages Automatically Unfollow You If You Unfollow Them

If you remove a Google+ Page from your circles, you are automatically removed from their circles. You always are in charge.

5. You Can Find Google+ Pages In Google Search

With a new feature we call Direct Connect, just type + followed by the brand name in Google Search, and you can see pages automatically display. Type +Pepsi to see Pepsi, and +Dell for Dell. It's that easy.

We're very excited about the great work we've seen with Google+ Pages so far. So many amazing companies are here, and you can see from all the work we've done that we want your experience on Google+ to remain a fantastic one.
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Scott Swain originally shared:
 
Warning: this could be painful to watch and you may consider it NSFW

IMHO this is just one example of how transparency-thru-technology will assist us in the abolition of destructive behavior.
http://boingboing.net/2011/11/02/video-judge-beats-disabled-daughter-for-using-the-internet.html
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I had been reading about this for a long time, but didn't watch, and just lumped it in with what are often overblown claims of abuse. I had no idea this was so clear cut or so reprehensible. I believe this guy should have been disbarred and brought up on assault and battery charges. His unconscionable actions cast doubt on every supposedly "fair and impartial" hearing he has given legal matters in the past.

As for his actions, if we held a lottery at a dollar a pop, to see who got to beat "his honor's" ass with a belt, we could raise a goodly amount to be used for discovering similar abusive assholes, like this guy.
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Ralph Roberts originally shared:
 
Every Black Hole Contains Another Universe?

And our universe may sit in another universe's black hole, equations predict

Hat tip to +Justin Schultheis for turning me onto this link!

National Geographic - "Like part of a cosmic Russian doll, our universe may be nested inside a black hole that is itself part of a larger universe.

"In turn, all the black holes found so far in our universe—from the microscopic to the supermassive—may be doorways into alternate realities. ..."

full mind-blowing article: http://news.nationalgeographic.com/news/2010/04/100409-black-holes-alternate-universe-multiverse-einstein-wormholes/#
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