Application Of Utilitarian Approach For Apple 's Tax Avoidance
To determine the ethical choice via the Utilitarian approach it is necessary to identify and measure the utility of the decision being made. The ethicality of tax avoidance will be measured by the utility gained or lost by Apple, Ireland, and the United States. The analysis will focus on the years 2009 through 2012, the years Apple’s subsidiary companies paid no corporate income tax to any nation because of the tax discrepancies. The decision that is ethically right will be the one which results in the maximum utility for the greatest amount of people.
In the years of 2009 through 2012, Apple’s three offshore subsidiary companies had no tax residency. During these years AOI had an income of 30 billion dollars that it did not have to pay income taxes on. (Babcock,2016) According to Holtzblatt, Geekie, and Tschakert the other two companies, ASI and AOE, amassed an income of 74 billion dollars. In these three years Apple had earned over 100 billion dollars without paying any income tax. Had Apple claimed tax residency in Ireland, they likely would have to pay the standard corporate income tax rate of 12.5%. Therefore, during these years Apple avoided paying 13 billion dollars. The money saved from the tax avoidance increased Apple’s utility. In the case that Apple claimed tax residency in the United States they would have had to pay the corporate income tax rate of 35%. Again, by avoiding the…