There is no “dangerous” Apple tax

A Reuters columnist ridiculously compares the cost of iPhone and iPad addiction to Uncle Sam's pound of flesh

Topics: Apple, Taxes, iPhone, iPad, Tax, apple tax,

There is no "dangerous" Apple tax

There are so many good reasons to criticize Apple, the world really doesn’t need to invent new ones that are utterly disconnected from reality. But that didn’t stop Reuters’ Chris Taylor, who has a column up today decrying “The ‘Apple Tax’ — America’s Dangerous Obsession.”

Here’s how it begins:

With the “fiscal cliff” looming, taxpayers are wringing their hands about all sorts of things. Income taxes might rise, dividends might get walloped, lifetime gift-tax exemptions might get slashed.

But when it comes to immediate impact on their wallets, maybe they should be thinking about something else entirely: The Apple tax.

Americans are shelling out big bucks annually to outfit the entire household with Apple products.

But about halfway down the column, Taylor notes, “Remember, this is not something that consumers are being forced to pay. They are dipping willingly into their own pockets, because they’re essentially slaves to the devices.”

Anyone see the problem? What makes a tax a tax? The fact that you are forced to pay it! If you are willingly dipping into your own pockets to make a discretionary purchase you are not paying a tax. (It’s even harder to reconcile the slavery metaphor. Slaves don’t pay taxes, either. Are we paying a tax, or are we owned, lock, stock and barrel?)

A fundamental failure to understand the concept of taxation is only the most obvious of this column’s problems. Elsewhere, Taylor notes ominously that “the average amount U.S. households spent on Apple products … has been rising smartly every year.” In 2011, it was $444, “In 2010 it was $295. Back in 2007, it was only $150.”

Let’s see … what might have happened in 2007 that could explain those numbers. Oh yeah, on June 29, 2007, Apple released the iPhone, one of the few product debuts in the last couple of decades that one can legitimately use the word “revolutionary” to describe. There’s no mystery to the fact that Americans are spending a lot of money on Apple products. Over the last five years Apple has introduced a stream of products that Americans find very, very attractive.



If Apple ceases to do so, Americans will stop buying them. So much for the “tax.” Indeed, the latest market data indicates that smartphones running versions of Google’s Android operating system now account for about 75 percent of the smartphone market. Again, that doesn’t sound much like slavery.

I’m sure there are cases where Americans are spending more than they should on Apple products. But when we try to assess whether a “tax” might be imposing “dangerous” economic costs on society, we do so by trying to figure out whether a particular tax might be so onerous that it inhibits economic activity. The billions of dollars that consumers are spending on Apple products is the exact opposite of a tax that might depress demand. It is demand, pure and simple. Crowded Apple Stores send a positive signal about the state of the overall economy. Empty Apple stores, at this time of a year, would be the definition of “dangerous.”

Again, there are plenty of reasons to be critical of Apple. For starters: the labor practices of its overseas partners; its penchant for filing intellectual property lawsuits to restrict the innovations of its competitors; its censorious and self-serving control over what gets piped through its own operating system. But to call the consumer rush to buy iPads and iPhones and iPods a “tax” isn’t a “facetious” analogy, as Taylor preemptively defends; it’s just stupid.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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