Apple In One Bite

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I enjoy these sorts of visual graphs as it tells a story of how well certain companies are doing. Apples last quarter of over $20 billion in profits equates to $156 000 per minute in profit. US tax rates would mean $54 600 per minute flowing into Government coffers or over $28 billion per year. Seriously huge amounts of revenue.

As we all know Apple is one giant company that has just grown and kept on growing becoming literally a country on it's own with the profits it generates. Apple was able to grow at the rate it has by keeping most of the profits away from the tax man. Between the years 2009-2012 Apple funneled profits through their Irish subsidiaries paying a tax rate of around 1%.

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Apple's $3 trillion market cap is larger than the GDP of many countries. That is how big they have become and will only become even bigger.

Last year Apple was the center of discussion at the G7 summit where it was agreed corporations around the world would pay a minimum of 12.5%. The taxes where those earnings have been made have to be paid in those countries. In the past the Irish benefitted by having the entire Europe sales for Apple channeled through their taxation as Apples Head Office is situated there. I think what the Irish are doing by skimming off the top what is due to other countries is smart, but also wrong in so many ways.

Apple is a US company and the biggest losers are the US economy for sticking by their 35% taxation rate. Surely it would benefit everyone involved to bring Apple home and give them a slight discount. It was not surprising that Apple last year thought it was fair to raise the tax levels globally as they have benefitted so much already growing into the monster they are today. Without the tax breaks would they be where they are financially and the answer is fairly simple, they would be missing many billions of dollars. It will be interesting to see if their market cap grows as fast over the next decade as it did the last. The company has to stay relevant and don't think they will do a Nokia as they have the funds to never let that happen. Industries and technology changes very quickly but I don't see Apple disappearing for many decades yet. Would take something catastrophic to derail this business.

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Taxes in millions of Dollars which should have been way higher for the turnover and profits achieved.

One could argue that the growth of the company has benefited indirectly by how little they have had to pay out. Now they are that big it is easy for them to say yes on what taxes are now agreed by the various governments. They got lucky by the way they maneuvered into the grey areas that allowed them to operate like this. Other companies will no longer find such an easy path to growth and which benefits Apple so much now. Personally I think when you become this big you become a law unto yourself and there will be back room deals done in order to keep certain revenues or taxes in the States. I am always someone who has believed companies should pay their dues if they are that successful as they owe that success to the people where they started out from and in this case the United States.

Posted Using LeoFinance Beta



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2 comments
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I saw some stats on these massive hyper scalers at the start of the year. It's nuts the amount of revenue these guys have and they are still in expansion mode.

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Probably one of the smartest things I ever did was buying those one or two shares of Apple that I did back in the day. I just wish I had bought more. Now that it has split several times I am holding onto a good amount of Apple stock.

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