May 24. As the Apple CEO told his Irish fairy tale about how Apple pays all that it should in taxes a New Jersey company named Actavis announced it was buying up an Irish business. It’s expected that Actavis will become an Irish company (at least on paper). This would allow Actavis to enjoy the Irish corporation tax rates and reduce what it owes by about a third.
On paper US. companies making over $18 million a year are taxed at 35%. That’s strictly on paper though. Steven Rattner writing in the New York Times said “the effective corporate tax rate in the United States fell to 17.8 percent in 2012 from 42.5 percent in 1960.” But who knows what kind of deals Actavis can make in the land of the leprechaun. As reported in the last post Apple paid only 2% there.
Can you imagine, companies in the 1960’s paid nearly half their profits to the U.S. government and somehow survived? Survived, business was booming!
Rattner suggests we deal with this by raising taxes on shareholders. Good luck with that. Right now money you make from sitting on your butt and collecting dividends is taxed at a lower rate than money you make sweating in a factory or in an office.