Application of Utilitarian Approach to 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.
Apple’s Utility
In the years of 2009 through 2012, Apple’s three offshore subsidiary companies had no tax residency. During …show more content…
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 income taxes in the United States, Apple avoided 36.4 billion dollars in taxes. These dollar amounts equal the quality of enjoyment or utility Apple gained from their decision. The next step in the Utilitarian approach is to quantity the affected. According to Apple Inc. there are 2,488 shareholders of Apple. (2016) Depending on which country Apple claimed tax residency in, the gained utility would be benefiting the 2,488 …show more content…
The ability to sell digital merchandise from anywhere in the world, without a physical presence anywhere, was an unforeseeable issue in the past. As the companies grow and have the ability to take advantage of the outdated tax policies, they are faced with ethical dilemmas. As explained previously, although legal, tax avoidance is not necessarily ethical. This research paper has applied the Utilitarian approach of ethics to determine if Apple’s tax avoidance was done ethically. In the Utilitarian approach, the ethical choice is the choice in which the most utility benefits the greatest quantity. The application of this approach has illuminated the fact that Apple’s decision to avoid income taxes in the United States, has resulted in them acting unethically. Had Apple paid the U.S. income tax, 71.4 billion dollars in utility would have benefited a quantity of 318.9 million people, rather than the 36.4 billion dollars in utility that benefited the 2,488 shareholders of Apple Inc., gained by avoiding the
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.
Apple’s Utility
In the years of 2009 through 2012, Apple’s three offshore subsidiary companies had no tax residency. During …show more content…
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 income taxes in the United States, Apple avoided 36.4 billion dollars in taxes. These dollar amounts equal the quality of enjoyment or utility Apple gained from their decision. The next step in the Utilitarian approach is to quantity the affected. According to Apple Inc. there are 2,488 shareholders of Apple. (2016) Depending on which country Apple claimed tax residency in, the gained utility would be benefiting the 2,488 …show more content…
The ability to sell digital merchandise from anywhere in the world, without a physical presence anywhere, was an unforeseeable issue in the past. As the companies grow and have the ability to take advantage of the outdated tax policies, they are faced with ethical dilemmas. As explained previously, although legal, tax avoidance is not necessarily ethical. This research paper has applied the Utilitarian approach of ethics to determine if Apple’s tax avoidance was done ethically. In the Utilitarian approach, the ethical choice is the choice in which the most utility benefits the greatest quantity. The application of this approach has illuminated the fact that Apple’s decision to avoid income taxes in the United States, has resulted in them acting unethically. Had Apple paid the U.S. income tax, 71.4 billion dollars in utility would have benefited a quantity of 318.9 million people, rather than the 36.4 billion dollars in utility that benefited the 2,488 shareholders of Apple Inc., gained by avoiding the