Many on the right like to say that America has high corporate tax rates. What they often miss, or perhaps omit, is that those are the "advertised rates." Once all the loopholes are exercised, the U.S. has among the lowest corporate taxes in the world. And that is what Apple does, by, as the NYT says, taking "advantage of tax codes written for an industrial age and ill suited to today’s digital economy."
In this, Apple is not the exception, but rather the rule, as least for technology giants. Others, such as Google, Amazon.com, Hewlett-Packard and Microsoft, among others, exploit the same loopholes.
Of course, there's nothing criminally wrong with any of this, as corporations by law must attempt to maximize profits for their shareholders. It is, of course, another example of how corporations can take advantage of loopholes that do not exist for the common man.
Examples of Apple's tax dodging include an office with just a handful of employees in Reno, NV, 200 miles away from its corporate headquarters in Cupertino, CA. The office collects and invests the company’s profits, allowing Apple to vaoid state income taxes on at laest some of its gains. California's corporate tax: 8.84 percent. Nevada's: none.
Apple has also created subsidiaries in low-tax locales such as Ireland, the Netherlands, Luxembourg and the British Virgin Islands. Some of these "subsidiaries" are little more than a letterbox or an anonymous office.
Taxes that might otherwise have gone to the governments of the U.S., U.K., France, and elsewhere go to Luxembourg instead, which has promised low, low tax rates to corporations to do this sort of routing.
In this way, not only has Apple led the way with technological advances, it's led the way with tax-dodging strategies, as well. It was the first to take advantage of the complex scheme now called the "Double Irish With a Dutch Sandwich."
That technique, now practiced by hundreds of other corporations, reduces taxes by routing profits first through Irish subsidiaries and the Netherlands and then the Caribbean. Some of the other companies that use this technique admit that they have directly imitated Apple's methods.
Despite facts like the above, they trumpet falsehoods about the U.S. tax system, and many uninformed Americans believe them. And it's not just the U.S. that is "robbed," but other countries, as well. To put things in concrete terms, Apple paid taxes of $3.3 billion globally on its reported profits of $34.2 billion in 2011, a tax rate of 9.8 percent. Compare that to Walmart, which in 2011 paid global taxes of $5.9 billion on its booked profits of $24.4 billion, or a tax rate of 24 percent (about average for non-tech companies). Compare that to your own income tax rate, as well.
There is a downside to all these schemes: when money is sent overseas, it cannot be returned to the U.S. without incurring a new tax bill. That, of course, is why Apple and other companies are urging Congress to pass a “repatriation holiday” that would permit U.S. businesses to bring money home without incurring large taxes. It's also one of the reasons Apple gave for its first-ever dividend, coming later this year: money that cannot be repatriated, at least not yet.