Curiously, New York Times had a very interesting story about:"How Apple Sidesteps Billions in Taxes":
This story comes with a great illustrative graphics, called "Double Irish With a Dutch Sandwich"
Definitely worth taking a look!
I don't begrudge any company profits. Companies are in business to make money. If they don't they go out of business and any tax revenues they had generated go away too.
However, I do believe in being good corporate (and private) citizens. Taking reasonable steps to reduce taxes is something everyone does and is fine, but to go to such lengths; twisting loopholes and such (Apple is far from the only company doing this) equates to not paying your fair share.
If companies are squeezing salaries, off shoring jobs and sheltering profits, then they are not creating the wealth that they often use as an excuse to push loopholes to such extremes.
"Taking reasonable steps to reduce taxes is something everyone does and is fine, but to go to such lengths; twisting loopholes and such equates to not paying your fair share."
Pray tell, could you define for us what going to "such lengths" is? And while at that, could you also define what one's "fair share" is?
As far as fair share: one can say (like the supreme court did about pornography) you know it when you see it. But seriously: highly profitable companies, like Apple, which would never have been successful without the US infrastructure, including the tremendous talent in Silicon Valley, should pay at least as much US taxes percentage-wise as the average middle class taxpayer does, which is around 20+ percent of earnings. Apple, same as GE and mopts other large companies fail to do this because they can. And, they can, because the GOP since Reagan convinced us the people (well to more gullible part of us) that government is bad and incompetent, by definition, and that taxes are bad no matter what they are spent on. Both of these are hogwash, but based on incessant repetition and no real fighting back from the other side made it "true".
@Junko: nice expose'! I like Mr. Clemmer's openness but I seriously doubt if he would do well as a politician... or for that matter, an Ethics Professor! How long can any corporation continue along these lines? Are they all working toward an end goal of uber profitability?
Indeed a very interesting article - but it almost seems to be trying to imply that Apple is responsible for the demise of De Anza college through their (fairly extreme) tax avoidance. To me that looks like a piece of political propaganda!
N X P = Netherlands eX-Patriot ?
1/3 employees in China sounds a bit high, but most chip companies these days have large eyes on China as a market.
Always be wary of anyone comparing themselves to Intel. You know they're not "like Intel".
Thanks for letting us know, Mr. Clemmer. Now I'll lump NXP in along with all the other PLA companies I won't do business with. Don't want any products with Tibetan blood on them.
That goes for Apple too. Once the rebel brand, it now represents the very totalitarian regime it once decried. Fool me once...can't be fooled again!
We are fooling our selves. The very profits these corporations are gathering are not going into hiring (at least not here). CNBC reports that corporations are planning to raise dividends or make acquisitions (mergers). We all know what happens after mergers -- L__offs. The rich just keep sticking it to the American Middle Class.
Look at Greece to see what America will be in a few years: http://www.bbc.co.uk/news/world-europe-17898561
I find it interesting that CFLs are not able to be manufactured due to rare earth manulation by China. Given that we can no longer buy incandescent bulbs in the USA in a few years, does that mean we will be using candles in ten years time?
Consider a company's cash flow as if the company were an electrical component and the cash were electrical current. The system has numerous inputs and outputs. But every bit of energy going into the system must eventually come out of the system in some form.
When a company finds ways to reduce its tax burden, this is equivalent to reducing the electrical load on a device. The result is that the device draws less current from its inputs (i.e. consumers can buy products at lower prices).
Conversely, a company that donates large sums to charities will eventually pass those costs along to consumers. There is no "free energy".
When a company offshores jobs, it provides wealth to people in other countries, while once again lowering prices for all consumers.
If a company employed only domestic workers and also gave large sums of money to charitable causes such as the Haitian earthquake recovery, many would call them heroes. But what we are praising is their willingness to supply current to a heavier load. That current (money) has to come from somewhere, and it comes from the consumers' pockets.
Why blame Clemmer for being candid.That China has baited and exploited the greed of european and american corporates (manufacturers and Bankers) is known. How the western world was fooled and lulled into believing that they were putting China to fullest use.
I would like to set the record straight here. The purpose of this story is illustrating the reality many multinational corporations face. NO companies can do effective business without building a strong presence in the fastest growing market. I appreciated Clemmer's openness in embracing the reality.
In the past when I covered NXP, I was more concerned with all the product lines and teams the company no longer had. But the conversation with Clemmer's last week convinced me of much transformed NXP, more confident, open and comfortable with its own new self.
In 2008 A manager in NXP said 'at least we purify our blood' in comment to the redundancy of a female engineer who is originally from China. In 2011 he is promoted to department manager.
NXP effectively treats its Chinese customer and Chinese Employees as clown.
Three decades after the West started trading with China, it is still run by the Communists, if anything much stronger now at the expense of the smaller industrial countries like Japan & Western Europe. While hot companies like Apple have been making mega billions with cheap Chinese labor, those that stumbled like Motorola, Nokia or were lured to China with the promise of a huge market ( e,g. Siemens, GE, Kawasaki ) and yes NXP were reduced to agree to their open blackmail and then have had the "pleasure" of being eaten ALIVE ( their technology stolen ) like in a fine Chinese Banquet.
Within a decade large US corp.s like GE will also be owned by the Chinese Communist Party. The only way to stop the rot is to boycott. There are enough opportunities outside China ( as usual Intel is smarter and ahead =of the pack dominated by Wall St. shysters and have moved Assembly & Test to Vietnam )
I don't mean business reasons alone for leaving China. There are legal roadblocks that the Chinese have put in place for why a company is stuck in China once they move there. For instance, foreign companies have to transfer their plant equipment to a Chinese owned entity. I know of one British manufacturer that tried to move their plant from China to Vietnam and they're still in court after 10yrs. The Chinese legal system is a sham controlled by locals.
Why doesn't the media explore the darker side of doing business in China.
Avoiding china for any semiconductor company is suicidal, they have to go with the flow else perish like many others. In fact their efforts should be lauded for transforming themselves. Even though it's contribution to its parent country's tax bucket is reduced its way better than the company filing for chapter-11.
@Neo1, I totally agree with you. I think all the companies should seriously consider entering both India and China markets because both of these markets provide excellent business opportunities to the companies.
It's sad to know that chinas control over Rare earth metals is hurting the sector. What is international community doing to tackle this matter ? Is it the reason why NXP shifted its base to China because it can have easy access to rare earth metal elements ?
it is interesting to see some hypocritical, western-oriented, cold war-minded comments here
The world (in terms of population, not wealth) is not blind on what is real justice and what is hypocritical...
will stop here, this is a technical place, don't want to bring in any more political stuff