Monday, August 20, 2012

Apple, Amazon and Google : Tax Evaders

Masters of Tax Evasion
Created by: www.MastersDegreeOnline.org
I was asked to post the following infographic that someone made. I don't endorse their site in any way, but I think their graphics are quite pretty and it makes an excellent point (though I find it odd it leaves off the tax rate on oil companies who pay amongst the highest tax rates). A nice counterpoint to the kerfuffle over Romney taking advantage of tax laws. Since Apple does the same.

Although I would add that everyone that buys or uses google, amazon or apple products are complicit because while the government suffers from the loss in tax revenue, the consumers (along with Apple shareholders) share in the benefits. Whether it is consumers or shareholders who benefit more depends on the relative elasticities (essentially, the more consumers are willing to trade their Apple phone for a Google phone, the more they benefit from lower taxes on Apple and Google).


There is also good reason why maybe apple should pay less in taxes. As the recent NPR planet money pointed out, economists are largely agreed that (in an ideal world) corporations (and people living off capital income) should pay essentially zero in taxes. This is particularly true for corporations engaged in innovation, which arguably characterizes google, apple and amazon.

(See my nerdwallet post or any textbook on public finance for more on both of these issues)
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