Excerpts of Apple Executives' Senate Committee Testimony on Tax Policy

[robbyx]

Our tax code and politicians are the joke. But let's pick on success to score some political points. Perhaps if our country wasn't the most wasteful country on Earth, we wouldn't need to gouge every citizen and every corporation at every possible opportunity. Perhaps if we didn't waste untold trillions of dollars on our military every year, we could actually educate our population, fix our failing infrastructure, and lower everyone's tax burden. But no. Our politicians just want MORE, MORE MORE. Bottomless pit.

We all look for loopholes when it comes to taxes. It's the American way. It's how our system works. I wager that everyone reading this thread, whether you bash or support Apple, takes deductions and looks for ways to minimize his or her tax burden. Rand Paul was right on target. Instead of bashing success, we should work to fix a broken system. We all need to look in the mirror. Our politicians created this nightmare tax code. So instead of tearing down successful companies, how about they step up and do what's right. The tax code is their fault, not Apple's. And if you're going to bash Apple, then stop taking deductions, stop looking for write-offs, and pay for your full tax burden.

 

[Meandmunch]

Apple (and many other giant companies that do this same crap) should get blasted for their dodgy practices BUT nothing is going to change if we don't fix the damn tax laws.

 

[Macboy Pro]

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.

You have the parties COMPLETELY reversed. Free lunch and everything else but the kitchen sink is in the White House right now.

 

[dugbug]

Defended by the likes of Rand Paul? Sheesh!

Ha ha right. He is really passionate on everything which can become a sideshow (whether you agree with him or not). I swear there is no off button with the guy. Imagine arguing over who pays for lunch.

 

[mrxak]

I think Congress will earn the right to lecture Apple when they manage to produce a budget surplus instead of a massive debt that will plunge our grandchildren into utter ruin.

Sorry, Congress. You don't get to tax all money everywhere on the planet. Not every transaction in the world is subject to your jurisdiction. You don't run Ireland. I'm sorry. That money simply doesn't belong to you, as strange as that is to hear.

 

[dugbug]

Apple (and many other giant companies that do this same crap) should get blasted for their dodgy practices BUT nothing is going to change if we don't fix the damn tax laws.

I thought cook-et-al actually did a nice job explaining it all. I would not call it dodgy at all. If anything, the US is benefiting on taxing 35% of apple profits from sales in canada, mexico, and the rest of the americas. That I did not know (I thought they would also have gone to AOI).

but I agree, fix the tax laws or things will def. not change.

 

[sbailey4]

So because someone creates jobs; they don't have to pay taxes?

Seriously? Apple pays more taxes than any company in the US. Its the damn US gov that is broken! Make the taxes an amount that matches the rest of the world and Apple and Cisco and all the others will stay the hell out of Ireland. Its insane the US forces companies to go to places like Ireland where they can pay 15% not 35%. No one up there smart enough to figure out that 15% of x million dollars is MORE than 35% of 0 million dollars. That would create even more jobs here plus more taxes because of employee income and spending etc.
As Cook stated if Apple is earning those profits outside the US why should they be taxable in the US? Sen Rand Paul got it right! McCain has no idea why you have to update your iPhone apps, and Sen Levin is just a dumbass.

Saw a Dateline deal some years ago and Cisco and a few other large corps are in fact having "corp offices" in places like Ireland JUST to take advantage of the 15% instead of 35%. All legally. Stated if US would compromise a little (not 15% but even maybe 25 -30 )they would move back. But US says NO WAY , we want 35%! So Cisco says fine we will stay in Ireland then.

 

[Meandmunch]

I thought cook-et-al actually did a nice job explaining it all. I would not call it dodgy at all. If anything, the US is benefiting on taxing 35% of apple profits from sales in canada, mexico, and the rest of the americas. That I did not know (I thought they would also have gone to AOI).

but I agree, fix the tax laws or things will def. not change.

If you are manipulating where your money goes to avoid paying taxes you are by definition, being Dodgy or at the very least Dodging the laws. Do we all do our best to keep our money we do, but I don't make billions or have the ability or resources to move and manipulate my money in the way a corporation like Apple can.

 

[thekev]

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.

I definitely missed that. Perhaps you could clarify the statement. Either way you may be underestimating the cost of auditing such a large company even if they felt they might turn up something. Consider that GE's US tax returns have been mentioned as totaling several thousand pages for a given year. I would have watched more of the thing if they were asking interesting questions. Most of it was just one guy talking at the others.

 

[danielwsmithee]

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.

How it it a fair share to pay taxes on all of you world wide businesses simply because you are located in the US?

 

[maknik]

McCaskill's question is great.

So if Apple is really just about minimizing tax burdens as a matter of doing what you can within the law to maximize profit for your shareholders -- as they say, and as their defenders here say -- why not shift the company entirely off-shore?

Cook had two options: admit he was screwing his shareholders by not doing that, or admit that there's more to it than just maximizing profits. He choose (b) -- "we're an American company" -- but couldn't explain why it wasn't unAmerican to hide 70% of your profits from America.

Yes, we all try to minimize our taxes. But when the rich can minimize them much more than the poor, that's not just an issue with the tax code, because the rich will always be able to find more loopholes with million-dollar lawyers. It's a matter of what it means to believe in America as a free, equal, and fair democracy. And Cook can't repudiate that without destroying the Apple brand in the eyes of millions of Americans. So he's left in this uncomfortable position, simultaneously claiming to be a pure profit-maximizer, and a loyal American company. And that won't cut it.

 

[mrxak]

If Congress wants to change the tax code, they are the ones who have the power to do it. Apple doesn't control the tax code, they simply follow it. Yelling at them for following the rules YOU created is the very height of stupidity.

It's clear that this hearing has nothing at all to do with taxes, has nothing to do with Apple, and nothing to do with the economy.

If Congress wanted to change the tax code, there is nothing stopping them except a signature from the President. If Congress wanted to bring Apple's billions earned overseas into the US economy, they could simply change the law so Apple wouldn't be penalized for doing so. Congress doesn't care about the tax code or the economy, however, except as political footballs. They want to create campaign ads for their next reelection campaign with a few soundbites and the notion that they were "tough on corporations." They want their faces and their names in the news. All this is to them is a game.

 

[everything-i]

No way. He's British. Taxes would be far too high if he was put in charge.

You have to be kidding, our corporation tax rates are only 23% and next year go down to 21%. If the US rates were this low there wouldn't be any issue I suspect.

 

[Starflyer]

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.

How much is their fair share after paying everything that they legally owe? 40%? 50%? 75%?

 

[Bubba Satori]

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

Would somebody explain to me what this sentence means.

 

[mrxak]

I definitely missed that. Perhaps you could clarify the statement. Either way you may be underestimating the cost of auditing such a large company even if they felt they might turn up something. Consider that GE's US tax returns have been mentioned as totaling several thousand pages for a given year. I would have watched more of the thing if they were asking interesting questions. Most of it was just one guy talking at the others.

This is the Federal government we're talking about here. They've got the manpower to do whatever they want, and if they don't, they simply hire more people and put the country deeper into debt to do it. A company like Apple isn't going to get away with anything, and they aren't stupid enough to try anyway.

 

[dugbug]

If you are manipulating where your money goes to avoid paying taxes you are by definition, being Dodgy or at the very least Dodging the laws. Do we all do our best to keep our money we do, but I don't make billions or have the ability or resources to move and manipulate my money in the way a corporation like Apple can.

Why? Why is that being dodgy? I do what I can to reduce my taxes: donations to charity, etc. Don't you? Is that not "manipulating" where your money goes for purposes of tax laws?

Not trying to argue with you, just pointing out that's what the reality is... that's why its happening: They paid foreign sales once... to then pay US tax on top when you don't have to would be a big hit to the price of the products they sell overseas. If we lowered our tax code on repatriating (remember, they already had to pay taxes on the in-country sales), to the point that the energy of managing an AOI-like construct is not effective, then we have the incentive to get the money back here, along with the advantages that brings.

 

[pvmacguy]

Blowhards

 

[mrxak]

Why? Why is that being dodgy? I do what I can to reduce my taxes: donations to charity, etc. Don't you? Is that not "manipulating" where your money goes for purposes of tax laws?

Not trying to argue with you, just pointing out that's what the reality is... that's why its happening: They paid foreign sales once... to then pay US tax on top when you don't have to would be a big hit to the price of the products they sell overseas. If we lowered our tax code on repatriating (remember, they already had to pay taxes on the in-country sales), to the point that the energy of managing an AOI-like construct is not effective, then we have the incentive to get the money back here, along with the advantages that brings.

You're exactly right. Apple would simply pass on that added and unnecessary tax burden onto foreign consumers, which effectively cripples Apple in the market. Why does Congress hate American companies so much?

Either Congress forces American companies to move their operations overseas, forces American companies to exit foreign markets, or forces American companies to keep their foreign-earned money overseas. Those are the only three possibilities Congress seems willing to consider. Apple is opting for the third option, at least until Congress eliminates penalties for bringing that money into the US.

 

[danielwsmithee]

If you are manipulating where your money goes to avoid paying taxes you are by definition, being Dodgy or at the very least Dodging the laws. Do we all do our best to keep our money we do, but I don't make billions or have the ability or resources to move and manipulate my money in the way a corporation like Apple can.

You don't have a 401K, IRA, Roth IRA, 529 or Coverdell account??? Those are all examples of you personally moving your money and manipulating it (under the law) to minimize your tax burden. You call Apple dodgy, yet do the exact same thing.

 

[Drumjim85]

I definitely missed that. Perhaps you could clarify the statement. Either way you may be underestimating the cost of auditing such a large company even if they felt they might turn up something. Consider that GE's US tax returns have been mentioned as totaling several thousand pages for a given year. I would have watched more of the thing if they were asking interesting questions. Most of it was just one guy talking at the others.

Can't really clarify, it was just a statement that both Bullock and Levin both agreed on. That there are IRS people inside apple full time, and that is common practice for a company as big as they are.

 

[Digital Dude]

There is no larger form of government as incompetent as the United States tax system. Congressional leaders voted to ensure our tax code is broken in order to protect their jobs. Now they want to blame private enterprise for a screwed-up system that they created?

Seemingly, Tim Cook made fools of all of them with very competent and simplistic answers. Time and time again we hear of many congressional leaders including the president, who has many of their resources located offshore for the exact same reason.

 

[numlock]

I thought cook-et-al actually did a nice job explaining it all. I would not call it dodgy at all. If anything, the US is benefiting on taxing 35% of apple profits from sales in canada, mexico, and the rest of the americas. That I did not know (I thought they would also have gone to AOI).

but I agree, fix the tax laws or things will def. not change.

yet they couldnt answer why they acted differently with profit in the americas compared to the rest of the world.

McCaskill's question is great.

So if Apple is really just about minimizing tax burdens as a matter of doing what you can within the law to maximize profit for your shareholders -- as they say, and as their defenders here say -- why not shift the company entirely off-shore?

Cook had two options: admit he was screwing his shareholders by not doing that, or admit that there's more to it than just maximizing profits. He choose (b) -- "we're an American company" -- but couldn't explain why it wasn't unAmerican to hide 70% of your profits from America.

Yes, we all try to minimize our taxes. But when the rich can minimize them much more than the poor, that's not just an issue with the tax code, because the rich will always be able to find more loopholes with million-dollar lawyers. It's a matter of what it means to believe in America as a free, equal, and fair democracy. And Cook can't repudiate that without destroying the Apple brand in the eyes of millions of Americans. So he's left in this uncomfortable position, simultaneously claiming to be a pure profit-maximizer, and a loyal American company. And that won't cut it.

seems like you actually watched this instead of reading highlighted and carefully picked segments like most on this forum seem to have done

You have to be kidding, our corporation tax rates are only 23% and next year go down to 21%. If the US rates were this low there wouldn't be any issue I suspect.

nothing is ever enough for the greedy

 

[Tiger8]

If you are manipulating where your money goes to avoid paying taxes you are by definition, being Dodgy or at the very least Dodging the laws. Do we all do our best to keep our money we do, but I don't make billions or have the ability or resources to move and manipulate my money in the way a corporation like Apple can.

So because you don't make billions it's OK for you to keep more of your money, but Apple shouldn't?

I would imagine a company of Apple size has even more resources and ways to minimize liability. It is the American way

 

[Rogifan]

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.

"Imagine there's no countries..." Scary stuff.

And just who would oversee this international tax? The UN?