Gil Cisneros Has Invested up to $250000 in a Company That Avoided Paying Taxes in California, Which Prevented the State F

Hit - Gil Cisneros has invested up to $250,000 in a company that avoided paying taxes in California, which prevented the state from collecting more tax revenue that could’ve been used for our schools, roads, and helping the homeless.

Backup:

• Six of Silicon Valley’s largest corporations skipped out on more than $100 billion in taxes this decade. “Just six of Silicon Valley's largest corporations skipped out on more than $100 billion in taxes this decade, according to a new report by Fair Tax Mark, a UK tax transparency organization.” (Edward Ongweso Jr, “Silicon Valley Owes Us $100 Billion in Taxes (At Least),” Vice, 12/3/19) Apple:

Editor’s Note: This is from Gil Cisneros’s financial disclosure filed 08/13/19.

• Gil Cisneros owned between $100,001-$250,000 in Apple Inc.

(Gil Cisneros, Financial Disclosure Report, Clerk Of The House Of Representatives, 08/13/19)

• Although headquartered in Cupertino, California, Apple sidesteps state income taxes by having an office in Reno just 200 miles away. “Apple's headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company's profits, Apple sidesteps state income taxes on some of those gains.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• California’s corporate tax raise was 8.84 percent and Nevada’s was zero. “California's corporate tax rate is 8.84 percent. Nevada's? Zero. Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• In 20016, Apple executives established a subsidiary named Braeburn Capital in Reno, Nevada to manage and invest the company’s cash. “In 2006, as Apple's bank accounts and stock price were rising, company executives came here to Reno and established a subsidiary named Braeburn Capital to manage and invest the company's cash. Braeburn is a variety of apple that is simultaneously sweet and tart.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• A portion of the profits from Apple’s product sales are deposited into accounts controlled by Braeburn Capital and then reinvested. “When someone in the United States buys an iPhone, iPad or other Apple product, a portion of the profits from that sale is often deposited into accounts controlled by Braeburn, and then invested in stocks, bonds or other financial instruments, say company executives.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• When Braeburn Capital’s investments turn a profit, some of it is shielded from tax authorities in California by virtue of Braeburn’s Reno, Nevada address. “Then, when those investments turn a profit, some of it is shielded from tax authorities in California by virtue of Braeburn's Nevada address.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• Since the founding of Braeburn Capital, Apple has earned more than $2.5 billion in interest and dividend income on its cash reserves and investments around the globe. “Since founding Braeburn, Apple has earned more than $2.5 billion in interest and dividend income on its cash reserves and investments around the globe.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• If Braeburn Capital were located in California, a portion of the domestic income would be taxed at California’s 8.84 percent corporate income tax rate, but in Nevada there is no state income or capital gains tax. “Braeburn were located in Cupertino, where Apple's top executives work, a portion of the domestic income would be taxed at California's 8.84 percent corporate income tax rate. But in Nevada there is no state corporate income tax and no capital gains tax.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• Apple avoided California taxes by managing its cash in Nevada, and at the same time getting tax credits from California. "At the same time that Apple is avoiding California taxes by managing its cash in Nevada, it is getting tax credits from California for conducting "research and development" in California. Apple has benefitted from more than $400 million of R&D credits since 1996, Duhigg says." (Henry Blodget, “Apple Dodges Billions In Taxes,” Business Insider, 04/28/12)

Amazon:

• Gil Cisneros owned between $250,001-$500,000 in Amazon.

(Gil Cisneros, Financial Disclosure Report, Clerk Of The House Of Representatives, 08/13/19) 2

• Amazon was the worst tax dodger but its income tax was only 12.7% compared to the headline rate of 35 percent. “Over the decade, Amazon revenues hit $960 billion and its net profits $26.8 billion, but its income tax bill was only $3.4 billion. Amazon’s “headline tax rate” or the rate it was supposed to pay was 35 percent, but Fair Tax Mark's report pegged the effective tax rate as 12.7 percent.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

Microsoft:

Editor’s Note: This is from Gil Cisneros’s financial disclosure filed 08/13/19.

• Gil Cisneros owned between $100,001-$250,000 in Microsoft Corporation.

(Gil Cisneros, Financial Disclosure Report, Clerk Of The House Of Representatives, 08/13/19)

• Microsoft set up a Nevada subsidiary that bypasses taxes. “Dozens of other companies, including Cisco, Harley-Davidson and Microsoft, have also set up Nevada subsidiaries that bypass taxes in other states. Hundreds of other corporations reap similar savings by locating offices in Delaware.” (Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” The New York Times, 04/29/12)

• Microsoft has shifted at least $39 billion in U.S. profits to Puerto Rico, where the territory’s government gave the company a tax rate of nearly 0%. “Microsoft had shifted at least $39 billion in U.S. profits to Puerto Rico, where the company’s tax consultants, KPMG, had persuaded the territory’s government to give Microsoft a tax rate of nearly 0%.” (Paul Kiel, “The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher,” ProPublica, 02/22/20)

• Puerto Rico has an autonomous tax system, even though it’s a U.S. Territory. “Puerto Rico — which has an autonomous tax system even though it’s a U.S. territory — didn’t have a particularly low tax rate, but KPMG could fix that.” (Paul Kiel, “The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher,” ProPublica, 02/22/20)

• Microsoft’s Puerto Rican subsidiary would produce all the CDs for the American Market. “Here’s how it would work. Microsoft’s Puerto Rican subsidiary would produce all the CDs for the American market. Because it was the sole producer, it would buy the exclusive rights to Microsoft’s technology. Those licenses would entitle the Puerto Rican company to a share of Microsoft’s American profits.” (Paul Kiel, “The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher,” ProPublica, 02/22/20)

• Burning Windows and Office software onto CDs in Puerto Rico saved the company almost $200 million in taxes. “A 2003 company memo laid out the quandary. Microsoft had about 85 employees in Humacao burning Windows and Office software onto CDs. Doing that in Puerto Rico had saved the company almost $200 million in taxes over the years.” (Paul Kiel, “The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher,” ProPublica, 02/22/20)

• The factory subsidiary would send the parent company about $31 billion over 210 years, as the Puerto Rico tax rate was near 0% compared to the U.S. where the rate was near 35%. “According to Hoory’s calculations, the factory subsidiary would send the parent company about $31 billion over 10 years — and receive almost $70 billion in profits in return over the same period. Instead of being taxed in the U.S., where the rate was 35%, the $39 billion difference between those figures would be taxed in Puerto Rico at a rate near 0%. It was a long-term plan that could continue indefinitely.” (Paul Kiel, “The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher,” ProPublica, 02/22/20)

Alphabet:

Editor’s Note: This is from Gil Cisneros’s financial disclosure filed 08/13/19.

• Gil Cisneros owned between $100,001-$250,000 in Alphabet.

(Gil Cisneros, Financial Disclosure Report, Clerk Of The House Of Representatives, 08/13/19)

• Google used a popular tax avoidance tool to move $22.7 billion in foreign revenue into an offshore tax haven in 2017. “Google used a popular tax avoidance scheme to move $22.7 billion in foreign revenue into an offshore tax haven in 2017, Reuters reports, citing new data from the Dutch Chamber of Commerce.” (Luke Stangel, “Google shifted $23B in overseas cash to Bermuda tax haven in 2017, report says,” Silicon Valley Business Journal, 02/04/19)

• Although Google paid a 35% U.S. corporate tax rate in 2017, the company was able to funnel money earned outside America through foreign subsidiaries to take advantages of tax loopholes. “In 2017, Google paid a 35 percent corporate tax rate in the U.S., where roughly half of its revenue comes from. But the company was able to funnel money earned outside of the U.S. through foreign subsidiaries, taking advantage of loopholes inherent in Irish, Dutch and Bermudian tax laws.” (Luke Stangel, “Google shifted $23B in overseas cash to Bermuda tax haven in 2017, report says,” Silicon Valley Business Journal, 02/04/19)