Sunday, January 21, 2018
Editorials

Editorial: Corporate tax trickery

When Apple's chief executive was before a Senate investigative committee last month answering questions on his company's efforts to avoid paying taxes, he represented just one of many notable companies engaged in legal tax cheating. Washington should crack down on the use of overseas tax havens, and the bipartisan concern raised over Apple's tax gimmicks is a promising sign that perhaps Congress will start doing its job. For too long, both political parties have conspired to allow corporations to avoid paying their fair share.

While Apple paid more than $6 billion in taxes last year on its American operations, it has been able avoid paying at least $74 billion in federal taxes between 2009 and 2012, according to congressional investigators. What Apple did is not technically illegal, but it should be and would be were it not for the influence corporations have on both political parties.

Apple established subsidiaries in countries such as Ireland, where the company would be exempt or nearly so from taxation. Under U.S. tax law, subsidiaries are taxed where they are incorporated, even though some of Apple's entities had no employees and were operated from Apple headquarters in California. Under Irish law, corporations are taxed where they are managed and controlled. In other words, Apple claims to be essentially stateless for tax purposes, after recording 65 percent of its worldwide income in Ireland.

Apple uses a typical trick to hide American-made profits overseas. It assigns valuable intangible assets such as patents to a subsidiary in a tax haven country. Profits made from American clients and consumers then become royalties paid to that subsidiary for the use of the patent. This defers the company's U.S. tax liability on those profits until they are repatriated back into the country.

The loss to the federal Treasury is staggering. In 2008, American multinational companies claimed that 43 percent of their $940 billion in overseas profits was earned in five small tax-haven countries, including Ireland. Yet only 4 percent of their foreign workforce was in those countries, according to the nonpartisan Congressional Research Service. Sen. Carl Levin, D-Mich., chairman of the investigative committee, cited a study that said 30 U.S. multinational companies with more than $160 billion in profits paid no federal income taxes over the last three years.

Part of the solution is to prevent American companies from deferring taxes on overseas profits. That would encourage the repatriation of the estimated $1.6 trillion in profits that U.S. corporations have hoarded overseas, leading to more investment and economic growth at home. And the added tax revenues could be used to help reduce the corporate income tax rate that stands at 35 percent, something that President Barack Obama and many in Congress in both parties want to do.

The burden of federal taxes has markedly shifted from corporations to individuals over the last 30 years. In 2011, individual tax receipts totaled $1.1 trillion while corporate taxes contributed only $181 billion. This glaring imbalance should be corrected.

Comments
Editorial: Beware of social media targeting kids

Editorial: Beware of social media targeting kids

Ignoring all available evidence that screen time and social media exposure can be harmful to kids, Facebook recently unveiled a new messaging app targeting children under 13. It’s yet another battlefront for parents who have to constantly combat the ...
Published: 01/21/18
Editorial: Too soon for Tampa Bay to settle for buses over light rail

Editorial: Too soon for Tampa Bay to settle for buses over light rail

The good news on the transportation front is that Tampa Bay’s government and business leaders are working together like never before to connect the region’s largest cities, attractions and employment centers with a more robust mass transit system. Th...
Published: 01/20/18
Editorial: Saying ‘thank you’ helps Tampa police build needed trust

Editorial: Saying ‘thank you’ helps Tampa police build needed trust

The smiles, applause and at least one hug belied the grim impetus for a gathering last week at a neighborhood center in Tampa — the Seminole Heights killings.The Tampa Police Department held a ceremony to thank those who helped in the investigation t...
Updated: 11 hours ago
Editorial: Criminal charges should finally wake up FSU fraternities to hazing’s dangers

Editorial: Criminal charges should finally wake up FSU fraternities to hazing’s dangers

The death last fall of a 20-year-old Florida State University fraternity pledge revealed pervasive dangerous behavior within the school’s Greek system. Andrew Coffey, a Pi Kappa Phi pledge, died from alcohol poisoning after an off-campus party, and a...
Published: 01/19/18

Editorial: Confronting racial distrust in St. Petersburg, one conversation at a time

The St. Petersburg Police Department’s heavy presence in Midtown on Martin Luther King Jr. Day and the community animosity it stirred have raised a familiar, troubling question: Can St. Petersburg’s racial divisions ever be reconciled?That big ideal ...
Published: 01/19/18
William March: Tampa Bay Democrats line up for state legislative races

William March: Tampa Bay Democrats line up for state legislative races

A surge of Democrats seeking local legislative offices and hoping for a "blue wave" in the 2018 election continued last week, led by Bob Buesing filing to run again versus state Sen. Dana Young, R-Tampa.In addition:• Heather Kenyon Stahl of Tampa has...
Published: 01/19/18

Editorial: State’s warning shot should get attention of Hillsborough schools

The state Board of Education hopefully sent the message this week with its warning shot about the slow pace of the turnaround at Hillsborough County’s low-performing schools.The board criticized the school system for failing to replace administrators...
Published: 01/18/18
Updated: 01/19/18
Editorial: More talk, answers needed on future of USF St. Petersburg

Editorial: More talk, answers needed on future of USF St. Petersburg

The Florida Legislature’s abrupt move to strip the University of South Florida St. Petersburg of its hard-earned separate accreditation and transform it back into a satellite of the major research university lacks detail and an appreciation for histo...
Published: 01/18/18

Another voice: Self-dealing by nursing home owners threatens patient care

The outsourcing of logistical support services, which became commonplace in the U.S. military in the 1990s and later was adopted by state prison systems, has now come to dominate the nursing home industry. And while nursing homes, unlike the military...
Published: 01/17/18
Editorial: Making illegal sewage discharges legal is wrong answer

Editorial: Making illegal sewage discharges legal is wrong answer

Three years into a crisis with its sewer system, St. Petersburg has a dandy new idea for dealing with the environmental fallout of dumping dirty water into the aquifer. Instead of committing to banning the outlawed practice, a consultant suggested th...
Published: 01/16/18
Updated: 01/17/18