Weekend tech reading: the New York Times's "iEconomy" series | Bleader

Weekend tech reading: the New York Times's "iEconomy" series


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Screen shot from 2001: A Space Odyssey
  • Screen shot from 2001: A Space Odyssey
It's been interesting to behold the recent frenzy over the release of the iPhone 5 right around the one-year anniversary of Steve Jobs's death. It's almost like the beginning of October marks the time of year when people worship at the feet of a tech guru and idolize his products. Admittedly, Apple makes pretty cool products; I own a couple. But it's also important to think about where those devices come from and how their production affects the planet, geologically and personally.

To start, I recommend checking out "The iEconomy," a seven-part series on "challenges posed by increasingly globalized high-tech industries" by the New York Times. Not all the articles are about Apple per se, but the company plays a large role in all of the stories, and is the focal point of around half of them. I'm still unsure if the series has concluded, but each of the articles is pretty long, so a new one may drop by the time you finish these seven. The article I found most fascinating is part three, "How Apple Sidesteps Billions in Global Taxes," where the title speaks for itself. I find that it's a tendency among people to view technology companies as more fiscally responsible or ethical than other corporations, but reporters Charles Duhigg and David Kocienewski do a good job illustrating how that's decidedly not the case. A particularly devastating passage:

Apple, for instance, 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. (Apple 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.

(h/t Longform)

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