Apple, taxes, and duty to shareholders

Apple is taking a bit of a beating in the press this week as Congressional investigators have revealed that Apple has avoided billions in taxes through completely legal—yet unattractive—means. (The New York Times notes that other companies, like Google, Amazon, and Starbucks have used similar tax avoidance methods.)

While the thought of a company avoiding taxes like this offends me, I’m going to come to Apple’s defense here. The reason is very simple: Apple has no other choice. Corporations are legally obligated to maximize returns for shareholders. If Apple’s leadership didn’t take advantage of these tax loopholes, shareholders would have the legal right to force the company to do it.

The fault here is not Apple’s. The fault lies in the tax code that contains these loopholes and in antiquated corporation law that doesn’t permit Apple or any other corporation to be good corporate citizens.

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