Excerpts of Apple Executives' Senate Committee Testimony on Tax Policy

[Dcuellar]

I'm sure this has been mentioned before, but just in case it wasn't I'll speak now.

Any company in the US has the ethical obligation to its shareholders of minimizing taxes. If what Apple did was legal then this trial should not have happened. Not avoiding taxes could have been the difference between having and not having a competitive advantage.

Would we prefer that all of the companies stop taking advantage of the tax code so that our country can prosper? Sure. But don't expect one company to do it and risk losing a competitive advantage to another company.

Change the tax code. Lower the taxes and see more "Made in the USA" labels.

 

[mactastic]

You already do. Gross income - deductions(mortgage, charity, and on and on) = net taxable income (profit)

Swing and a miss...

So you're saying I can deduct my operating expenses related to my household prior to calculating my AGI? Rent/mortgage, car payments, acquisitions, etc.? Really?

----------

It's scary. Honestly. You don't even understand how corporate taxes work on a basic level.

Yes, that would be nice if things worked the way you suggested. It's too bad that what's left of those profits is taxed AGAIN (income tax) when you pay yourself. Unless you're small like a sole proprietorship, partnership, or LLC (in which profits losses are applied directly to your personal income tax), that's the reality of the matter.

Double taxation is a completely separate (non) issue, nothing more than a red herring to cover your own ignorance. (Turnabout is fair play, no?) lets stick to the topic, shall we?

 

[tigres]

Perhaps we can add the revised tax bill to obamacare; and have a 50k page law on the books.

I thought this hearing was a real embarrassment to us who have little to no respect for our current political system and its lifelong political figures in it for a career, instead of public service.

 

[notabadname]

Every one of these politicians shelters their own money, writes off ridiculous business expenses, and uses every other legal loophole there is to dodge taxes. They did not need Apple to educate them on how it's done. This is such a joke, and the greatest example of hypocrisy I have seen from our politicians in at least a day or two.

Apple follows and maximizes their savings in accordance with the law, as it is their fiduciary responsibility to their shareholders to do so.

 

[KPOM]

As the Wall Street Journal points out in an editorial in tomorrow's paper, Apple's effective tax rate, even after the "gimmicks" is 14%, which is about the same as Samsung. Korea's tax code isn't as complex as ours. Everyone clamoring for Apple to "pay more" needs to realize that doing so would put Apple at a significant disadvantage to its competitors.

----------

Every one of these politicians shelters their own money, writes off ridiculous business expenses, and uses every other legal loophole there is to dodge taxes. They did not need Apple to educate them on how it's done. This is such a joke, and the greatest example of hypocrisy I have seen from our politicians in at least a day or two.

Apple follows and maximizes their savings in accordance with the law, as it is their fiduciary responsibility to their shareholders to do so.

Senator Levin has been on the committee that helps write tax laws for years. If anything, all these hearings show is the incompetence of Congress.

 

[Mac Kiwi]

Is it possible to keep shareholders happy and be patriotic. if you are a big company?


These corporations are never going to bring their profits home in the current climate, but why can't they work out a system where they get taxed less { on repatriation of profits } But have to return / reinvest in manufacturing in the US to qualify.

 

[marksman]

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.

Good thing at least the first four replies in this thread show people who literally have zero understanding of the issues being discussed and should have thought five times before pressing submit.

----------

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.

I agree levin came across as an idiot. At least McCain presented himself as someone trying to understand the issue and see all sides. Levin was just being a blow hard idiot. I would be embarrassed if he represented me. Unfortunately the typical senator is ill qualified to even discuss tax law.

 

[IJ Reilly]

Swing and a miss...

So you're saying I can deduct my operating expenses related to my household prior to calculating my AGI? Rent/mortgage, car payments, acquisitions, etc.? Really?

Has your CPA not told you about the cat food depletion credit? The tennis shoes depreciation allowance?

 

[edk99]

Swing and a miss...

So you're saying I can deduct my operating expenses related to my household prior to calculating my AGI? Rent/mortgage, car payments, acquisitions, etc.? Really?

I was giving you a simple example. If you want to go further with this then yes you can do those things. Start a business and set yourself up as an LLC and your tax status as an s-corp and have at it.

 

[DisplacedMic]

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.

yeah, you might not like his politics, but Rand Paul is not a simpleton. could it be you've got partisan blinders on?

Apple is the third highest taxed company in the US and the highest non-oil company. And that's just in America where they brought in almost 15 billion dollars for congress to piss away. So tell me, how are they not paying "their fair share?" and more importantly, what's to stop them from moving elsewhere if Congress decides that it's their "privilege" to take even more?

get real

 

[marksman]

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.

I suspect 90% of the Fortune 500 have offices in Ireland that serve a financial management purchase.

When I used to get money from google it always came from Ireland.

 

[4TheLoveOfTech]

Is it possible to keep shareholders happy and be patriotic. if you are a big company?


These corporations are never going to bring their profits home in the current climate, but why can't they work out a system where they get taxed less { on repatriation of profits } But have to return / reinvest in manufacturing in the US to qualify.

Why can't I? My tax bracket is 32% with Federal & State tax.

 

[marksman]

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.

The poorest people get PAID by the IRS.


I don't think us tax policy is an area you should dive in too deeply without a lot more education

 

[BaldiMac]

Two things jump out at me right away:

First, this whole set of accusations seem to be based on nonsense. Taking advantage of tax breaks, if its lawfully done, is fully legit. Don't like it? Change the tax codes. But don't expect anyone, especially a company, to not take advantage of legal tax breaks. It would be foolish for them not to.

This isn't really about "taking advantage of tax breaks". It's about money earned in other countries outside of US jurisdiction. Levin seems to imply that because Ireland doesn't want to take a large cut of Apple's foreign earnings, then the US should be entitled to. The real issue is that the US tax code makes it more cost effective to keep foreign earnings overseas than to bring it back to America.

As far as Apple pointing out that they create jobs, are making their Mac mini in the US, etc., that was a total non sequitur. There is no reason to point that out because they are being judged on what they are doing (regarding taxes) and whether it is legal or not. When an entity is put on trial for something, one cannot argue, "but look at all the nice things we have done" in order to erase a wrong. Lessen the pain of a sentence, maybe, but that's not even what we are talking about here. Same goes for pointing out how much the company DID pay in taxes. Makes no difference. If it could have been cut in half, but still legit, great. If any of it was illegitimate breaks, even if the sum of those was a small fraction if what was paid, that's a problem.

Way, way off base here. No judging. No accusations. No trial. No question about the legality of Apple's tax strategy. This was a senate hearing that Apple voluntarily participated in to highlight issues for tax reform. The discussion of jobs was to highlight how Apple contributes to the US economy to contradict the implication that they are funneling profits overseas.

 

[DisplacedMic]

I'm sure this has been mentioned before, but just in case it wasn't I'll speak now.

Any company in the US has the ethical obligation to its shareholders of minimizing taxes. If what Apple did was legal then this trial should not have happened. Not avoiding taxes could have been the difference between having and not having a competitive advantage.

Would we prefer that all of the companies stop taking advantage of the tax code so that our country can prosper? Sure. But don't expect one company to do it and risk losing a competitive advantage to another company.

Change the tax code. Lower the taxes and see more "Made in the USA" labels.

exactly. if you want to get back to a place where "Made in America" is a mark of quality and not an appeal for charity, we need to also get back to being a pro-business nation again.

 

[4TheLoveOfTech]

The poorest people get PAID by the IRS.


I don't think us tax policy is an area you should dive in too deeply without a lot more education

I believe the majority of Apple employees fall into the same poorest category. Retail doesn't pay well. Apple has their own 2% that make a decent wage.

 

[Roller]

Any company in the US has the ethical obligation to its shareholders of minimizing taxes. If what Apple did was legal then this trial should not have happened. Not avoiding taxes could have been the difference between having and not having a competitive advantage.

Ethical? No. Fiduciary possibly. And, to be clear, it wasn't a trial, although Tim Cook may have felt like it was.

I don't often agree with Rand Paul, but I think that he was spot on when he said that if Congress doesn't like what Apple or other corporations are doing, they should change the tax code.

 

[bwillwall]

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.

If you were asked to give me a third of everything you own and tried to get out of it would you expect people to get upset with you? Come on people, use you ****ing brains. Sorry I'm pissed about all of this politic crap...

 

[mactastic]

I was giving you a simple example. If you want to go further with this then yes you can do those things. Start a business and set yourself up as an LLC and your tax status as an s-corp and have at it.

Oh and the IRS totally would not want to audit you then. Sure.

Corporation-people are taxed differently than meat-people. Is that really a controversial topic?

 

[bwillwall]

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.

Oh, not to mention... they did nothing against the law, yet they were put on trial. That's okay? I think not. As Rand Paul said, they need to fix the dang corporate taxing and then they can go complain to a single company they know will get them media and ignore all the others paying negative tax rates.

 

[iRock1]

I find interesting the cultural differences between American and European people.

I was in London for two months, just in time to hear EVERYBODY bitching out because of the Starbucks case. And one thing that strikes me is how concerned the British people was about tax avoidance. Everybody agreed on boycotting the company and no buying its products—because they felt in someway that it was acting in an unfair and hardly decent way.

In America instead you see the people defending the company.

And no, I don't pretend to judge you people. I'm just trying to point out the differences between two groups of people about the same issue. It's even kind of interesting.

 

[michaelz]

exactly. if you want to get back to a place where "Made in America" is a mark of quality and not an appeal for charity, we need to also get back to being a pro-business nation again.

Dead on!

 

[4TheLoveOfTech]

Oh, not to mention... they did nothing against the law, yet they were put on trial. That's okay? I think not. As Rand Paul said, they need to fix the dang corporate taxing and then they can go complain to a single company they know will get them media and ignore all the others paying negative tax rates.

It wasn't a trial, as much as Tim dramatized it. It was a congressional hearing to ask questions. Happens a lot.

After a trial you generally aren't having a $3,000 meal & getting on you jet.

 

[GoldenJoe]

Is it possible to keep shareholders happy and be patriotic. if you are a big company?


These corporations are never going to bring their profits home in the current climate, but why can't they work out a system where they get taxed less { on repatriation of profits } But have to return / reinvest in manufacturing in the US to qualify.

Paying taxes is not patriotism.

----------

I find interesting the cultural differences between American and European people.

I was in London for two months, just in time to hear EVERYBODY bitching out because of the Starbucks case. And one thing that strikes me is how concerned the British people was about tax avoidance. Everybody agreed on boycotting the company and no buying its products—because they felt in someway that it was acting in an unfair and hardly decent way.

In America instead you see the people defending the company.

And no, I don't pretend to judge you people. I'm just trying to point out the differences between two groups of people about the same issue. It's even kind of interesting.

That would be the difference of about 10 years of socialism. Don't worry, we'll be just as insane soon enough. We're already more than half way there, after all.

 

[lordofthereef]

This isn't really about "taking advantage of tax breaks". It's about money earned in other countries outside of US jurisdiction. Levin seems to imply that because Ireland doesn't want to take a large cut of Apple's foreign earnings, then the US should be entitled to. The real issue is that the US tax code makes it more cost effective to keep foreign earnings overseas than to bring it back to America.

I realize this. I think the entire reason this was brought to everyone's attention is likely because of Apple's humble beginnings in the good old USA. Granted, this is what every other company on the planet does or would do, the difference is that Apple went from being a virtual nobody to the company everyone aspires to be over the last decade or so, so they are in the spotlight here.

Way, way off base here. No judging. No accusations. No trial. No question about the legality of Apple's tax strategy. This was a senate hearing that Apple voluntarily participated in to highlight issues for tax reform. The discussion of jobs was to highlight how Apple contributes to the US economy to contradict the implication that they are funneling profits overseas.

I didn't mean to imply that this was a trial but, rereading what I wrote, I can see how it easily came off as such. I meant in general, if someone is put on trial for dodging taxes, it matters not what else they do right. I can do everything else correctly in my life, if I do one thing wrong, I should face the consequences. Same goes, theoretically, for a company. FWIW, I implied the same with "judging"; wasn't trying to use the term in a legal sense.