"He who commands patience can will what he wants"

Benjamin Franklin

Feds probe how big tech companies avoid U.S. taxes

By Charles Duhigg and David Kocieniewski
The New York Times arles Duhigg and David Kocieniewski New York Times

04T05:44:08Z

Published: Friday, Jan. 4, 2013 - 12:00 am | Page 6B
Copyright 2013 New York Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Congressional investigators are wrapping up their scrutiny of the accounting practices of Apple and other technology companies that allocate revenue and intellectual property offshore to lower the taxes they pay in the United States.

The Senate Permanent Subcommittee on Investigations inquiry now drawing to a close began more than a year ago and involves at least a half-dozen technology companies, according to people with firsthand knowledge of the inquiry who were not authorized to speak publicly.

Those people said the subcommittee had subpoenaed or otherwise asked the companies to explain methods they have used to avoid domestic taxes. They said Apple had become a focus of the inquiry and was cooperating with the subcommittee, which is expected to issue wide-ranging recommendations that would likely play a significant role in congressional tax code negotiations.

Apple's domestic tax bill has drawn interest among corporate tax experts and policymakers.

Although the majority of Apple's executives, product designers, marketers, employees, research and development, and retail stores are in the United States, Apple's accountants have found legal ways to allocate about 70 percent of the company's profits overseas, where tax rates are often much lower, according to corporate filings.

Apple said it is "one of the top corporate income tax payers in the country, if not the largest." The statement said the company "conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules."

It is unclear how broadly Senate investigators are looking into the technology industry, if any laws are thought to have been broken and how many companies are involved. Beyond Apple, the subcommittee is known to be looking at Google, Hewlett-Packard, Microsoft and firms in such fields as biotechnology.

The subcommittee, which is overseen by Sen. Carl Levin, D-Mich., has been interested in the effect on the budget deficit of offshore tax strategies. Representatives from Microsoft and Hewlett-Packard testified at a subcommittee hearing on the subject in September. Both companies were criticized sharply by Levin for using intellectual property rules to move revenue to other nations to avoid paying U.S. taxes.

"The resulting loss of revenue is one significant cause of the budget deficit, and adds to the tax burden that ordinary Americans bear," Levin said at that hearing.

Apple has long been a pioneer in developing innovative tax strategies that reduce its domestic taxes. Last year, for instance, Apple saved the equivalent of $2.4 billion through various techniques, according to a study by a former Treasury Department economist, Martin Sullivan. At the September hearing, Levin said the investigation indicated that Apple had deferred taxes on over $35.4 billion in offshore income between 2009 and 2011.

Tech companies easily shift "intellectual property, and the profit that goes along with it, to tax havens," said Sullivan. "Apple went out of its way to try and ensure that its tax savings didn't attract too much public attention, because tax avoidance of that magnitude – even though it's legal and permissible – isn't in keeping with the image of a socially progressive company."

Apple paid cash taxes last year of $3.3 billion around the world on reported profits of $34.2 billion, a tax rate of 9.8 percent. (The company does not disclose what portion of those payments was in the United States, or what portion is assigned to previous or future years.) By comparison, Wal-Mart last year paid worldwide cash taxes of $5.9 billion on its booked profits of $24.4 billion, a tax rate of 24 percent, which is about average for non-tech companies.

In its statement, Apple said it paid "an enormous amount of taxes" to local, state and federal governments. "In fiscal 2012 we paid $6 billion in federal corporate income taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government," it said.

© Copyright The Sacramento Bee. All rights reserved.

"No one should control your happiness.  It is your life, and your feelings. Don't let someone dictate your right to be happy."

Jeremiah Anthony, Iowa City High School age 17 years westhighbros@westhighbros  on twitter.
Jeremiah tweets positive messages to help counteract bullies, enrich and brighten students and teachers lives.  As seen on "Today" show NBC January 9, 2013.

Campaign Contribution Reform:

$100.00 Per Legal Individual of the United States of America.

No contributions from P.A.C’s (Political Action committees’, corporations, companies, businesses,     unions, groups or organizations.

Contributions can only come from Legal Citizens of the United States and of voting age, no other contributions allowed, period.

All lobbying to be abolished except for non-paid representatives of organizations that cannot contribute and financial contribution to a political party, incumbent, or candidate for elected office.

I came up with this while in High School  (1960’s) and decades later I still believe it is the best policy to get our elected officials to listen and truly represent the people of this country instead of the wealthy or lobbyists for special interest groups.

Our elected officials will have to listen and represent their constituents.

Mysterious letter sparks curiosity, investigations

An Oregon woman says she found a note pleading for help in a box of Halloween novelties. The discovery is getting attention from federal authorities.

By Bruce Kennedy Mon 10:52 AM msn.com

 

It sounds like something out of a thriller novel -- and it still hasn't been verified. But a letter recently found in a box of Chinese-made Halloween decorations has sparked investigations into whether some products imported from the People's Republic are -- against U.S. laws -- being made under forced labor.

Earlier this month, the Oregonian reported the story of the discovery by Julie Keith, who works at a Goodwill facility in Portland, Ore. For years, a brand-new "Totally Ghoul" graveyard kit from Kmart had sat in her garage, and when she finally opened it in October, she found a note written in choppy English.

"Sir," the letter began, "if you occasionally buy this product, please kindly resend this letter to the World Human Right Organization."

The unsigned letter, which also has notes in Chinese characters, outlined the alleged abuse of workers at the Manshanjia Labor Camp in the northeastern Liaoning Province. (You can see the letter here.)

"People who work here have to work 15 hours a day," the note continues, "without Saturday Sunday break and any holidays. Otherwise they will suffer torturement beat and rude remark." The note also says workers at the camp make about 10 Chinese Yuan -- or about $1.60 U.S. – a month.

Unsure of where to turn, Keith published the letter on Facebook and asked for comment.  Some people questioned whether the letter was real -- but it has nonetheless made an impact.

“Curiosity killed the cat, but satisfaction brought it back”

Eugene O'Neill quotes

Rosa Golijan , NBC News 1.1.13

Facebook security glitch exposes users' New Year's Eve messages

Facebook

Facebook took down the Midnight Deliveries app after a security glitch exposed users' messages

Whew! Facebook saved countless users from New Year's Eve humiliation ... after initially exposing their private messages.

Facebook's Midnight Delivery app allows users to schedule private messages to wish friends a happy new year exactly when the clock strikes twelve. This is fantastic for those who intend on having a glass of Champagne or five as 2013 approaches, as it will let them schedule a polite message along the lines of "Happy New Year, my beloved friends!" instead of drunk texting everyone  something like "I'm sooooo wasted right nowljskf and happy NEW YeAr! 2013 FTW! YOLO!" when the ball in Times Square drops.

Now great as Facebook's little app sounds, there was just one problem: A security glitch temporarily exposed users' scheduled messages to the general public.

The Next Web's Robin Wauters reports that when a user scheduled a Midnight Deliveries message, he or she was presented with a confirmation page. Unfortunately, that confirmation page could be viewed by anyone who happens to guess its URL. "You couldn’t see who sent the messages," Wauters explains, "but you could see all the intended recipients, and the message itself, if you tweaked the URL the right way."

Those toying around with URLs could also see images which were attached to those scheduled massages. And to add insult to injury, they could also delete the correspondences.

"We are working on a fix for this issue now," a Facebook spokesperson told NBC News via email. "[A]nd in the interim we have disabled this app on the Facebook Stories site to ensure that no messages can be accessed."

Perhaps the more prudent approach, for the time being, is to just plain type out a "Happy New Year!!!!1!!!" text message and send it to everyone in your contacts at midnight.

Want more tech news or interesting links? You'll get plenty of both if you keep up with Rosa Golijan, the writer of this post, by following her on Twitter, subscribing to her Facebook posts, or circling her on Google+.