Tim Cook Calls Apple's Tax Avoidance Accusations 'Total Political Crap'

[2457282]

I am more excited about watching this interview than seeing star wars

My take is if no laws are broken then the governments can suck lemons. I don't understand why anyone who makes money in another country would ever want to bring it back to the US and immediately lose 40%. The US has created no incentive. They need to create an incentive that would say something like, bring the money back pay some reasonable amount of taxes and invest another reasonable amount within the US. This could help generate job and spur the economy. For example, invest 15% in manufacturing or alternative energy in the US and 15% in taxes. That would work I think.

 

[ThisIsNotMe]

And totally legal. Unfortunately, this is a problem created by Congress (both parties), not Apple.

What problem?

 

[numlock]

It's the mirror. And they state their own logical fallacy:

Normally tax is a percentage of profit, not revenue. However, because so much of Apple's expenditure is paid to itself, we're showing their stated revenue instead.


Tell me, again, why should they pay more than they are legally compelled to? Why are you blaming a company for following laws enacted by governments?

there is a difference between following the law and going through unheralded ways to bypass what was intended. it also seems you think that the laws in certain countries and certain companies interests are completely unrelated.

Exactly as they should. It is their obligation to their shareholders.

do you actually know of any example of a companies brass facing consequences for not doing everything to maximise shareholders value ie tax avoidance, modern slave labour etc?

Tax avoidance is fine. You take deductions, you're using tax avoidance. No problem.

Tax evasion, that's a crime.

not that comparison again that deductions are in anyway similar to what these companies are doing.

 

[neuropsychguy]

Apple has to pay taxes, boo hoo. Get over it Tim.

The issue is that Apple gets taxed on their overseas profits (the rate at which they get taxed depends on the company structure and the country). Those taxes generally go to the governments of the countries Apple is operating in. Apple makes a lot of money so it wants to bring some money home. U.S. tax laws will penalize Apple for doing this - a 40% "tax" on the incoming money that's already been taxed overseas (not by the U.S. government).

It's an incredibly anticompetitive tax policy. It also tends to encourage more and more outsourcing of operations. The corporate tax code needs major work.

 

[Wiesenlooser]

Cook is wrong on this one. It is not "Political Crap" that they are trying to avoid taxes in the EU. It's the blame of the EU that Apple can do that and this will change in the future.

But they ARE going for Ireland - like every other big company - to avoid taxes. Now I am not blaming them for doing this but Cook should not call it ot as crap

 

[Kaibelf]

It's okay to use legal TAX constructions but a company this big could invest more in the world. Not talking about Red products. Just building the future for a better world. Will never happen with stock holders holding the cards..

You do that with YOUR company.

 

[ConnYoungy]

-> Cook described the tax avoidance accusations as total political crap.

-> He added that repatriating the money is not reasonable due to high corporate tax rates.

Those claims contradict each other. Apple is either avoiding tax or it isn't!

So true. On one hand they're not avoiding tax but on the other he's keeping money abroad so he doesn't have to pay 40% tax on it... Sure it's legal but that's not what the interviewer is getting at.

 

[AppleInLVX]

I assume it's only you. Don't think most people are following a CEO's weight with great scrutiny...unless it was seeing Marissa Mayer adding some pounds before her pregnancy was announced. She is so easy on the eyes.

Fair enough.

 

[chiefsilverback]

There is also a much bigger issue of booking income generated in Multiple European companies like UK, France, etc in Ireland. Does he also think this is Bull Crap.

I think you'll find this a much broader issue than just Apple and it comes down to the EU allowing revenue to be moved from country to country but not requiring all countries to tax at the same rates! If you had the choice of buying something in a state with no sales tax vs one with 7% sales tax where would you shop?

 

[Doctor Q]

Tim Cook is the ceo of the biggest company in the world - and there is an important science called PR that most don't understand.

I think that the smart move for PR purposes would be for Cook to explain that Apple pays all required taxes in every country, rather than reacting angrily. Being touchy about it can give people the impression that there's something to hide.

"The lady doth protest too much, methinks" -- Queen Gertrude in Hamlet​

As long as what you're doing is legal why do you have to admit anything? Everybody tries to pay as little tax as possible within the law. If you don't like the laws that's not Apple's problem.

Did you notice the quote marks? I said "admit" to emphasize that people say Apple is profit-seeking as if it's an accusation of wrongdoing, so it's fine for them to "admit" it (agree with the claim that they maximize their profit and pay only the taxes they are required to).

 

[medazinol]

Let's put it this way:

You're an American citizen who works and lives in another country. You pay income tax to that country because you live there. The US government also wants to tax you on that income because you're an American citizen. That's for real and they try to apply it to corporations in the same situation. You EARNED that income from working in another country and paid their income tax so why is the US trying to tax you again???? It's just wrong.

 

[nebo1ss]

^This... well written and explained.

Here is a good reason why the US tax overseas income. I did not write this it was copied from an article written on the subject.

"But they [U.S. corporations] all still expect Uncle Sam to come to their aid with military firepower in case the natives abroad get restless and nationalize their company’s assets. We still have a blockade against Cuba because Fidel Castro more than a half century ago dared seize an American-owned telephone company. During that same period, we have consistently intervened to maintain the lock of US corporations on the world’s resources, continuing to the present task of making Iraq and Libya safe for our oil companies.

America’s multinational corporations still need the Navy to protect shipping lanes and the Commerce Department to safeguard US copyrights. They also expect the Federal Reserve and Treasury Department to intervene to provide bailouts and cheap money when the corporate financial swindlers get into trouble, like GE, which almost went aground when its GE Capital financial wing got caught in the great banking meltdown."

 

[samiwas]

Exactly.

Isn't that like a movie studio going to Louisiana or Georgia to film instead of California?

Other states offer tax incentives to film there.

It sounds like Ireland does the same for corporations.

No, it's not like that at all. This would be like if a California-based movie studio moved to Georgia or Louisiana to film, but set up their "corporate office" in Nevada, and used some tax loophole to pay taxes to none of them.

It's the reason this building in Delaware:

Is the home to over 285,000 corporations. They don't actually have offices there or do anything there, they just pretend money is made there to base their taxes there. And that's pretty much to MO of big companies.

Claiming business miles to reduce your tax is legal. Claiming every mile you drive is for business in order to lower your tax even moreso is using a real law, but twisting it around for your own benefit, while most likely lying.

 

[CalWizrd]

...do you actually know of any example of a companies brass facing consequences for not doing everything to maximise shareholders value ie tax avoidance, modern slave labour etc?...

This is total gibberish. I have no idea what you are trying to say or what concept you are attempting to portray.

 

[patent10021]

What's wrong with avoiding tax again? It's not evasion so...

 

[Kar98]

Are you guys bitching and whining about other companies doing the same?

Absolutely. You should see the thread at The Car Lounge about VW and their emissions cheating shenanigans. 200 pages and counting.

 

[gugy]

Apple is a company, which purpose is to generate profit for its shareholders. Thus Apple's, and Cook's, job is to minimize taxes within the law, which is what they are doing with complex schemes.

Indeed. Any corporation or wealthy individual do the same. They hire qualified people to figure out ways under the law to avoid paying taxes. Hell, I am nobody, I have a CPA and I give her carte blanche form me to pay less taxes. Why would Apple be any different.
The government need to find ways to creates less loopholes if they need more $. IMO corporations and very wealthy individuals should pay more.

 

[Kar98]

Then dont. Why are you on an Apple fan site again?

To piss in your cheerios.

 

[CalWizrd]

... They don't actually have offices there or do anything there, they just pretend money is made there to base their taxes there. And that's pretty much to MO of big companies. ...

No, it's not like that at all.

Delaware is the home to so many corporations because they have the most "corporate favorable" Chancery laws.

 

[swarmster]

Dear Tim,

To use your own tone of voice: That is total crap. Apple pays almost zero tax in most european countries, yet Apple earns a lot of money in every single one of them.
I am fully aware that most other multi-national companies are using the exact same tax-loopholes as Apple. But that doesn't make it right.

He claims that Apple pays ever dollar it owes. Yeah... owes according to the legal tax loopholes! See, he wasn't lying!

Not just the above, but a bunch of people here are claiming Apple 'should' pay more taxes, but since you're suggesting they ignore the current tax codes, care to offer a suggestion for how much they should pay and to whom? And maybe forward it to your lawmaker?

You can't both not ask Apple for more money and at the same time bash them for not giving you more money. I think that's the behaviour Cook finds so infuriating.

 

[iLunar]

The issue of repatriation is a very good one, but I think the focus on Apple is the wrong way to approach it. If there is one company that actually honors their tax commitment to the intent of the law, it's Apple. They are an easy target (and most likely PR target of Oil/Gas companies) because they have a ubiquitous product.

I'm more interested in what war-machine companies pay in corporate taxes while also receiving US government tax dollars. Halliburton was the tip of the iceberg in this regard. Boeing, Koch, etc are war-profiteering companies that collect government subsidies AND government contracts AND refuse to repatriate oversea tax dollars -- all the while causing death and destruction and pollution around the globe.

Apple also seems to be the most transparent in terms of human rights/labor and environmental impact. Of course, they can always do better and should. However, the focus on Apple in these issues seems absurd when you have companies double and triple dipping the US economy while causing unrecoverable havoc to peoples and the environment.

I also think a closer look at tax loopholes by big Pharma should be examined. These companies get away with so much R&D tax evasion while generating huge profits on the backs of sick people is truly immoral.

 

[CalWizrd]

To piss in your cheerios.

It's pretty apparent that your maturity level would not be able to support an intelligent conversation about international tax issues.

 

[sudo1996]

The tax practice of all major companies is morally condemnable, unfortunately legal.

The EU taxes are morally condemnable.

I think that the smart move for PR purposes would be for Cook to explain that Apple pays all required taxes in every country, rather than reacting angrily. Being touchy about it can give people the impression that there's something to hide.

"The lady doth protest too much, methinks" -- Queen Gertrude in Hamlet​

I agree that it was a bad move. Looks suspicious also that Ireland is trying to defend Apple.

Oh, but I do get to choose! I can choose not to bad Apple's coffers.

Well, have fun with that. You'll have to avoid purchases from very many corporations if you stick with that principle.

 

[AppleInLVX]

I don't know, do you look like you're gaining weight?

Perpetually.

 

[SSDGUY]

I am more excited about watching this interview than seeing star wars

My take is if no laws are broken then the governments can suck lemons. I don't understand why anyone who makes money in another country would ever want to bring it back to the US and immediately lose 40%. The US has created no incentive. They need to create an incentive that would say something like, bring the money back pay some reasonable amount of taxes and invest another reasonable amount within the US. This could help generate job and spur the economy. For example, invest 15% in manufacturing or alternative energy in the US and 15% in taxes. That would work I think.

Yup. When a company creates the level of employment that Apple does, why punish them? The whole idea of corp taxation is backwards. And we wonder why US GDP hasn't been over 5% since around 2003, and currently is a mediocre 2%.