More on Apple and Other Companies that Side-Step Paying Taxes!!

Dear Commons Community,

The report by the New York Times that appeared yesterday has generated an avalanche of commentary in the media.  MSNBC, CNN, and FOX News devoted substantial air time to the story.  On MSNBC the discussion included reference to the fact that Apple is not the only company that avoid paying taxes by establishing offices in other countries.  Earlier this year, it was reported on this blog the top companies that engaged in similar activities in 2010.   Compiled by Alternet and MSNBC, the list of the top eleven companies were as follows: 

   General Electric gets special mention because it paid no federal taxes last year.  The other top ten are:

  1. Google
  2. Boeing
  3. News Corp. (Fox News, Bill O’Reilly, Sean Hannity, Rupert Murdoch and Company)
  4. Pfizer
  5. Oracle
  6. Altria (Philip Morris)
  7. IBM
  8. TimeWarner
  9. Morgan Stanley
  10. Microsoft

Aren’t we lucky that these companies then set up foundations to make them appear as generous donors to cultural, education, and research organizations.



The War on the Young: Wasting Minds!

Dear Commons Community,

Following on the heels of Frank Bruni’s New York Times’ column yesterday, Paul Krugman examines the opportunities or lack thereof for recent college graduates.  He establishes that:

“You’ve probably heard lots about how workers with college degrees are faring better in this slump than those with only a high school education, which is true. But the story is far less encouraging if you focus not on middle-aged Americans with degrees but on recent graduates. Unemployment among recent graduates has soared; so has part-time work, presumably reflecting the inability of graduates to find full-time jobs. Perhaps most telling, earnings have plunged even among those graduates working full time — a sign that many have been forced to take jobs that make no use of their education.”

He also comments on Mitt Romney who recently advised college students:

“After denouncing President Obama’s “divisiveness,” the candidate told his audience, “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”

The first thing you notice here is, of course, the Romney touch — the distinctive lack of empathy for those who weren’t born into affluent families, who can’t rely on the Bank of Mom and Dad to finance their ambitions. But the rest of the remark is just as bad in its own way.

I mean, “get the education”? And pay for it how? Tuition at public colleges and universities has soared, in part thanks to sharp reductions in state aid. Mr. Romney isn’t proposing anything that would fix that; he is, however, a strong supporter of the Ryan budget plan, which would drastically cut federal student aid, causing roughly a million students to lose their Pell grants.”

Krugman’s recommendations:

“We should be expanding student aid, not slashing it. And we should reverse the de facto austerity policies that are holding back the U.S. economy — the unprecedented cutbacks at the state and local level, which have been hitting education especially hard.”




The Imperiled Promise of College: Frank Bruni Column!

Dear Commons Community,

Frank Bruni raises lots of questions in his New York Times column today entitled, The Imperiled Promise of College.  With Congress debating federal student loans and interest rates, Bruni discusses the worth of a college degree, the job potential of certain majors, global competition and escalating tuition.

Perhaps his most important comments relate to the need to maintain affordability of and quality of all of our colleges.

“That you can’t gain a competitive edge with just any diploma from just any college is reflected in the ferociousness of the race to get into elite universities. It’s madness out there. Tiger mothers and $125-an-hour tutors proliferate, and parents scrimp and struggle to pay up to $40,000 a year in tuition to private secondary schools that then put them on the spot for supplemental donations, lest the soccer field turn brown and the Latin club languish. The two Americas are evident in education as perhaps nowhere else.

Trying to keep higher learning as affordable as possible is a crucial effort to collapse that divide. No good can come from letting college — as a goal, as an option — slip away. But as a guarantor of a certain quality of life, it already has. And we need to look at a whole lot more than loan rates to fix the problem.”




How Apple and Other High-Technology Companies Sidestep Paying Taxes?

Dear Commons Community,

The lead article in today’s New York Times describes Apple’s techniques for avoiding paying taxes on profits by establishing offices in low or no-tax countries and states.  For example:

“Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world. ..

Apple was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.

Without such tactics, Apple’s federal tax bill in the United States most likely would have been $2.4 billion higher last year, according to a recent study by a former Treasury Department economist, Martin A. Sullivan. As it stands, the company paid cash taxes of $3.3 billion around the world on its reported profits of $34.2 billion last year, a tax rate of 9.8 percent.“

Even within the United States, Apple avoids paying taxes in high-taxed  states.

Apple’s headquarters are in Cupertino, California where much of its design, customer service and manufacturing are done.  It also has a handful of employees in a small office in Reno, Nevada.  By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains. California’s corporate tax rate is 8.84 percent. Nevada’s Zero.

The article makes the point that what Apple is doing is common especially among high-technology companies but the effects on a state can be devastating.  California especially has seen draconian cuts in social, education and health services.  An example dear to us in higher education:

“A mile and a half from Apple’s Cupertino headquarters is De Anza College, a community college that Steve Wozniak, one of Apple’s founders, attended from 1969 to 1974. Because of California’s state budget crisis, De Anza has cut more than a thousand courses and 8 percent of its faculty since 2008.

Now, De Anza faces a budget gap so large that it is confronting a “death spiral,” the school’s president, Brian Murphy, wrote to the faculty in January. Apple, of course, is not responsible for the state’s financial shortfall, which has numerous causes. But the company’s tax policies are seen by officials like Mr. Murphy as symptomatic of why the crisis exists.”

Anyone for Occupying Cupertino!


Gail Collins on the Privatization of Public Education!

Dear Commons Community,

Gail Collins comments on the privatization of public education in her New York Times column today.  Some of us have been discussing this for several years now.  After continuing the joke of the New York State Eight Grade Reading Exam with questions about a talking pineapple, she focuses on the testing industry and specifically Pearson.  For example, Pearson has a testing contract with the state of Texas worth a half billion dollars a year.

“We’re now in a world in which decisions about public education involve not just parents and children and teachers, but also big profits or losses for the private sector. Change the tests, or the textbooks, or the charters, or even the rules for teacher certification, and you change somebody’s bottom line. “

One interesting quote was attributed to New York State Education Commissioner John King.

“We’re a capitalist system, but this is worrisome,”

Yes it is especially when your agency insists on trying to give no-bid contracts worth tens of millions of dollars to companies such as Rupert Murdoch/Joel Klein’s Wireless Generation to establish education data-driven decision making systems throughout the state.

We can thank No Child Left Behind for creating much of this situation but we also need to include all of the players (education management companies, charters, the media, corporate-affiliated foundations such as Gates, Broad and Walton, the US Department of Education and a host of individuals and organizations) that see public education and our children as the vehicles for returning huge profits to stockholders.   Welcome to the great American education-industrial complex!!!



The Five Best and Five Worst American Companies!!

Dear Commons Community,

AOL News and Daily Finance have come up with a list of five of the best (of which we can be proud) and five of the worst (of which we should be ashamed) companies in America.

“When a big company gains enough momentum that its direction becomes self-sustaining, its influence can ripple through society with a bevy of positive consequences — like the creation of jobs, the spread of ideas, and a general improvement in living standards.

But capitalism  is far from a perfect system. Along with a host of American companies that we should view with pride, there are a number that have created situations we think are downright evil. For exploitative behaviors that harm customers, employees, shareholders and the general public, these companies (and one whole industry) have earned their seats on the corporate netherworld’s board of shame.”

See below for the list.


Five American Companies of Which We Can Be Proud!!

  1. Costco
  2. Starbucks
  3. Berkshire Hathaway
  4. Whole Foods
  5. Nucor


Five American Companies of Which We Should Be Ashamed!

  1. Monsanto
  2. Chesapeake Energy
  3. The Entire Cigarette Industry
  4. Goldman Sachs
  5. Wal-Mart


Gov. Andrew Cuomo Says He Will Not Approve of Making NYC Teacher Evaluations Public!

Dear Commons Community,

The New York Daily News is reporting that New York Governor Cuomo flatly rejected the “total disclosure” of teacher evaluations Wednesday, putting himself at odds with Mayor Michael Bloomberg.

“Cuomo, in his most expansive comments so far on the hot-button topic, said he supports parents being allowed to see evaluations and expects to hammer out an agreement with the [New York State] Legislature by the end of its session in June.

“The teacher evaluation disclosure question is a question I believe has to be answered this session,” Cuomo told reporters.

Cuomo said he disagreed with those who want to keep teacher evaluations completely private — but he doesn’t see eye-to-eye with those, including Bloomberg, who want them made available for widespread review.

“I think you have to strike an intelligent balance between the teacher’s right to privacy and the parent’s right to know and the public’s right to know,” Cuomo said. “The question is where on that spectrum” do officials set policy.

Cuomo noted other public employees, including cops and firefighters, do not have their evaluations made public.

“I believe the parents have a right to know,” the governor stressed. “I also believe in a teacher’s right to privacy.”

It taking this stance, Cuomo is supporting Assembly Leader Sheldon Silver and state teachers union President Dick Iannuzzi.

Thank you, Governor Cuomo for supporting the sane approach to this issue.





Rupert Murdoch Admits A ‘Cover-Up’ At The News Of The World, Says ‘I Failed!’

Dear Commons Community,

Rupert Murdoch at an inquiry in London regarding his influence on major British government officials answered in reference to the phone hacking scandal that rocked his media empire last year: “there had been a “cover-up” at the News of the World, but claimed that he was a victim rather than an accomplice in the scheme. He also said that the phone hacking scandal will be a “blot on my reputation” for the rest of his life.

The Huffington Post is reporting that:

“The second day of Murdoch’s testimony before the media ethics panel found the mogul facing far sharper questioning than he did on Wednesday. Murdoch did not back down from his insistence that he had known nothing about the extent of phone hacking at his newspapers. (Indeed, he said that he had essentially ignored the News of the World for over 30 years.) But he said that he had “failed” by being such a remote chief executive…

In Murdoch’s telling, the wool had been pulled over his eyes by a handful of people at the News of the World.

“I think the senior executives were all misinformed and shielded from anything that was going on there,” he said, adding that he blamed “one or two” unnamed people for that. “There’s no question in my mind that, maybe even the editor, but certainly beyond that, someone took charge of a cover-up, and we were all victims of that.”

He claimed that those “strong characters,” who appeared to be former News International legal adviser Tom Crone and News of the World editor Colin Myler, had prevented reporters from speaking to either James Murdoch or Rebekah Brooks.”

Lord Brian Leveson, the judge leading the inquiry, asked how Murdoch could not have been more interested in phone hacking, given that he was so personally close to his print titles.

“I have to admit that some newspapers are closer to my heart than others, but I also have to say that I failed,” Murdoch said. After a long pause, he added, “and I am sorry about that.”

It will be interesting to see how Fox News covers this story!



Mississippi Governor Phil Bryant: Democrats’ “one mission in life is to abort children.”

Dear Commons Community,

The Huffington Post is reporting that Mississippi Governor Phil Bryant (R), in defending his decision to sign a bill that could shut down Mississippi’s only abortion clinic, told conservative radio host Tony Perkins on Tuesday that the Democrats’ “one mission in life is to abort children.”

“Even if you believe in abortion, the hypocrisy of the left that now tried to kill this bill, that says that I should have never signed it, the true hypocrisy is that their one mission in life is to abort children, is to kill children in the womb,” he said. “It doesn’t really matter, they don’t care if the mother’s life is in jeopardy, that if something goes wrong that a doctor can’t admit them to a local hospital, that he’s not even board certified.”

Nothing like having good moderate, public discourse on serious issues facing our country!!