Excerpts of Apple Executives' Senate Committee Testimony on Tax Policy

Discussion in 'Politics, Religion, Social Issues' started by MacRumors, May 21, 2013.

  1. macrumors bot

    MacRumors

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    Three Apple executives, CEO Tim Cook, CFO Peter Oppenheimer, and head of tax operations Phillip A. Bullock, appeared in front of the U.S. Senate Permanent Subcommittee on Investigation earlier today, testifying about Apple's tax policies.

    MacRumors has a rough transcript of the hearing, while the full event is viewable on C-SPAN. The full hearing was quite long, but here are some selected excerpts from our transcript.

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    At the beginning of the hearing, Senators are allowed to make whatever opening statements they wish. Senator Rand Paul (R-KY) gave a spirited defense of Apple, saying he was "offended" by the hearing.
    Apple CEO Tim Cook and CFO Peter Oppenheimer also made opening statements. Cook noted that Apple is responsible for creating or supporting 600,000 jobs in the United States, and disclosed for the first time the the upcoming 'Made in the USA' line of Mac computers would be manufactured in Texas, with parts coming from a wide variety of states.Much of the hearing would focus on Apple's use of Irish subsidiaries to avoid paying U.S. income taxes on revenue generated overseas from the sale of products. Senators had accused Apple of having "sham" corporate entities in Ireland that served no purpose except for avoiding tax liability. Hitting back at that accusation, Cook said that Apple's operations in Ireland were not shell corporations, but had actual functions.
    Senator John McCain (R-AZ), asked Cook whether Apple's actions overseas created an unfair advantage for them compared to smaller companies that operate strictly inside the US and cannot create such overseas entities.
    In a moment of levity, the 76-year old McCain expressed a concern that many iPhone owners share: "I'm out of time, but why the hell do I have to keep updating the apps on my iPhone? Why can't you fix that?" Cook responded that Apple was "looking to do better all the time."

    Senator Claire McCaskill (D-MO), after praising Apple and its products, asked Cook about what's keeping Apple headquartered in the United States and why the company doesn't move overseas where the fiscal climate might be more favorable.
    One of the major reasons for Cook's appearance in front of the committee was for Apple to put forth its own plan for corporate tax reform.

    For one thing, Cook said the U.S. corporate income tax rate should be in the mid-20 percent range, while repatriation tax rates for income earned outside the U.S. should be somewhere in the single digits. Cook said that Congress should take a tip from Apple and focus on simplicity.
    Finally, in his final line of questioning to Cook and Oppenheimer, Senator Levin went on the offensive, arguing that while Apple may not be violating the letter of the law, it was certainly violating the spirit of it.

    By routing most foreign earnings to an Irish subsidiary -- a subsidiary that, in Levin's view, existed solely to avoid paying U.S. income tax -- Apple was doing a disservice to the American public by not paying their fair share.

    Apple does pay U.S. income tax on earnings from the Americas (Mexico, Canada and Brazil most notably), but some two-thirds of its worldwide income eventually get routed to Irish subsidiaries.
    Following the testimony of Apple's executives, representatives from the US Treasury and the IRS appeared and largely confirmed that Apple's activities appeared to be entirely legal.

    Note: Due to the political nature of the discussion regarding this topic, the comment thread is located in our Politics, Religion, Social Issues forum. All MacRumors forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

    Article Link: Excerpts of Apple Executives' Senate Committee Testimony on Tax Policy
     
  2. macrumors 65816

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    I'm sick and tired of Apple being unresponsive and inconsiderate when it comes to taxes.
     
  3. Administrator

    Doctor Q

    Staff Member

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    The solution is clear: Put Jonathan Ive in charge of redesigning the tax code.
     
  4. macrumors 65816

    WiiDSmoker

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    #4
    So because someone creates jobs; they don't have to pay taxes?
     
  5. macrumors regular

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    #5
    It takes a real set of balls to hide and not pay SO MUCH in taxes and then turn around and give advice on how to make companies pay more in taxes. And that Rand Paul simpleton? He's exactly the type to decry a lack of "patriotism" but, at the same time, applaud a company that wouldn't pay its fair share for the privilege of doing business here.
     
  6. macrumors 6502

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    Way to go Rand Paul! Liberals and Democrats live in la la land and have no understanding how business and job creation work.

    Apple is a success story!
     
  7. macrumors Penryn

    rdowns

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    #7
    Levin and McCain should be embarrassed for that sham of a hearing. They picked on Apple because they knew the cameras would follow. They should have heard from GE, Exxon Mobil and Wall Street.

    Oh, Will. How do you manage to get the first comment bashing Apple is so many threads?
     
  8. macrumors 6502a

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    #8
    Did they break any laws? No.
     
  9. macrumors 6502

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    #9
    Because you obviously do all you can to maximize your tax burden.
     
  10. macrumors 68020

    inkswamp

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    #10
    By most accounts, Steve Jobs was fairly liberal, so it's strange that you're making that assertion given the subject at hand partly being the incredible success of Apple under his guidance. Seems some liberals might understand business, huh?

    But either way, if you're looking to score cheap political points or bolster your own political biases, you'll need to explain why it wasn't only Democrats running this committee hearing.

    ----------

    Strawman argument. Nobody said that.
     
  11. macrumors 6502a

    dugbug

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    #11
    Not following you. Apple pays US taxes at the full corporate rate for all US activities (in addition to units sold in all of americas). The distinction is their AOI managed foreign sales, which they are not required to pay US taxes on anyway. Why should they bring that money in and have it cut by a third?

    Would you do that to your 401K?

    Apple came in to suggest a lower rate for repatriating that money, which would be a great thing for our economy. Otherwise, it ain't happening (this goes for just about every other company as well btw. Apple are not an exception.).
     
  12. macrumors 603

    chrmjenkins

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    #12
    I think Cook was pretty reasonable when he suggested a corporate tax rate in the 20's.

    I'm in favor of an international minimum tax as Obama has suggested. If the nation of sale taxes below this mutually agreed upon rate, the home nation taxes the rest to that percentage (say 15%). No tax on repatriating money. That way you tax the profits only once. Makes sense to not tax the moving of money provided it was taxed fairly when it was first earned. And it's not a true transfer of wealth since it remains under the control of the same entity.
     
  13. macrumors regular

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    #13
    You know more about this than I do. Just leave me to be upset. :p
     
  14. macrumors 65816

    Four oF NINE

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    Defended by the likes of Rand Paul? Sheesh!
     
  15. macrumors regular

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    #15
    Great to see people are somewhat sane and see how twisted our world has become. legal stealing? go into politics. Legal bribing? be a lobbyist. :)
     
  16. macrumors 603

    thekev

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    #16
    I watched part of it. They have brought in other corporations on their tax practices in the past. Last year it was HP and Microsoft. The way they conducted it was stupid. Levin spent a lot of time asking questions and then talking at the person attempting to answer, which was ridiculous. It's not like the IRS has the resources to audit a company the size of Apple anyway even if they did suspect illegal activity.
     
  17. macrumors 68030

    Drumjim85

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    #17
    Guess you didn't watch enough of it. Apple has IRS people in their building, constantly keeping an eye on what's going on. A full time audit.
     
  18. macrumors regular

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    #18
    Rand Paul is 100% right. Those senators should have been summoning Cook to receive an award or congratulation on behalf of the company, or perhaps provide advice on balancing the budget.
     
  19. macrumors 65816

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    #19
    I was offended by this hearing from the first time I heard about it. This was just an excuse for a few Senators to bloviate about the tax code Congress themselves created. Apple did nothing illegal, Apple did what they had a fiduciary duty to their shareholders to do, and Apple is one of the best examples of a successful American company creating jobs in the US and paying their taxes to the IRS.

    Ridiculous.
     
  20. macrumors 6502a

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    #20
    They paid over 6 BILLION in taxes in 2012. How much did you pay?
     
  21. GQB
    macrumors 65816

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    #21
    Apple is definately being subjected to a witch hunt here, but don't fall for that tool Rand Paul... He's a free lunch Republican who wants corporations to get all of the benefit without paying any of the costs.
     
  22. macrumors 65816

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    #22
    No way. He's British. Taxes would be far too high if he was put in charge.
     
  23. GQB
    macrumors 65816

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    #23
    I know... talk about 'STOP HELPING!!!'.
     
  24. macrumors 6502a

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    #24
    The company that does not pay ANY taxes is the hyper left leaning General Electric (GE).

    Apple IS paying taxes, they just are not paying taxes on sales and service for which it is not required or owed. Funny thing is that NO ONE, not even the mouthy liberals, will pay more taxes then they are obligated to pay. Actually, most of them skirt their taxes as bad or worse then the best of them. Look at Warren Buffett Hello, this guy avoids taxes like the plague but the only time you hear him in the news is when he is preaching that "he and people with wealth should pay more". Then PAY IT you hypocrite. No one is stopping you.

    I support Apple in their smart business practices of following the laws and only paying what they are obligated to pay.
     
  25. macrumors 6502

    Joined:
    Aug 9, 2003
    #25
    Apple paid over $6,000,000,000 in taxes last year? Is not not having to pay taxes? Levin looked like a joke when he had to be schooled by the Treasury and IRS about Tax, Tax Law and accounting.
     

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