The New York Times blows it again: Incorrectly reports Apple’s tax rate

“We’ve been told by the New York Times, you know, the newswpaper of record, that Apple only paid a 9.8% tax rate last year,” Tim Worstall reports for Forbes. “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.”
“This really is the most gargantuan ignorance on their part,” Worstall reports. “The $3.3 billion has nothing, nothing at all, to do with the $34.2 billion: something which any accountant at all could have told them. For a full explanation of what is going on see this piece from two weeks ago.”

“To put it simply, a pressure group, the Greenlining Institute, released a report that included that calculation that led to that 9.8% tax rate. Their calculation (and as I say, all the details are in that earlier post) was based on simple ignorance of how the US corporate taxation system works,” Worstall reports. “At least I assume it was ignorance, not mendacity… What the NYT/Greenlining calculation has done is compared the profits in 2011 not with the taxes paid on profits from 2011. It has compared profits in 2011 with the taxes calculated on the basis of 2010′s profits. Which is obviously clear and present nonsense, entire argle bargle of which at least the newspaper should be ashamed.”

“Any company that grows its profits quickly will have an apparently low tax rate with this method used. Because taxes paid actually in this year are always calculated from profits made last year. So what the NYT has really reported is that Apple’s profits have been growing quickly: something which I think we already knew,” Worstall reports. “The thing the story really shows is something entirely different. Appalling, ignorant, calculation cobbled together by small time think tank. Two weeks later it is stated as simple fact in the newspaper of record. So why not issue press releases stating anything at all that you want to believe? Who knows, maybe the New York Times will find it a ‘convenient’ fact and will endorse it for you? Although you might want to note that your “fact” had better be politically acceptable to said newspaper otherwise they won’t endorse it.”

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