Calvin Coolidge famously said, “After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.”
With that in mind, CNBC reports:
Apple CEO Tim Cook struck back at critics of the iPhone maker’s strategy to avoid paying U.S. taxes, telling The Washington Post in a wide ranging interview that the company would not bring that money back from abroad unless there was a “fair rate.
Along with other multinational companies, the tech giant has been subject to criticism over a tax strategy that allows them to shelter profits made abroad from the U.S. corporate tax rate, which at 35 percent is among the highest in the developed world.
The move complies with the letter of the law, if not the spirit, as a few particularly strident critics have lambasted Apple as a tax dodger. The nonprofit Citizens for Tax Justice estimates that big companies have parked more than $2 trillion offshore,which is subject to more favorable tax rates.
While some proponents of the higher U.S. tax rate say it’s unpatriotic for companies to practice inversions or shelter income, Cook hit back at the suggestion.
“It is the current tax law. It’s not a matter of being patriotic or not patriotic,” Cook told The Post in a lengthy sit-down. “It doesn’t go that the more you pay, the more patriotic you are.”
Cook acknowledged that Apple was effectively taking advantage of a massive tax loophole, which he said was perfectly legal.” “The tax law right now says we can keep that [profit] in Ireland or we can bring it back.”
Cook added that it was up to Congress and the president to enact tax reform, which he is “optimistic” will take place sometime next year.
The CEO’s comments are all but certain to stoke a new debate over taxation during an already contested election cycle. Republican White House contender Donald Trump recently unveiled an overhauled tax plan that, among other things, lowers the corporate rate to 15 percent from the current 35.
However, Democratic nominee Hillary Rodham Clinton—who enjoys the backing of Cook, Warren Buffett and other billionaires—has staked a case on higher taxes for the wealthy, but envisages a series of fixes that would try to discourage companies from moving abroad, or avoiding U.S. taxes.
It’s not as if the tech giant is exactly hurting for money. Apple is sitting on at least $200 billion in cash on hand, a massive accumulation that some investors have called on the company to re-invest.
Cook added that “when we bring it back, we will pay 35 percent federal tax and then a weighted average across the states that we’re in, which is about 5 percent, so think of it as 40 percent. We’ve said at 40 percent, we’re not going to bring it back until there’s a fair rate. There’s no debate about it.”
The U.S. corporate tax rate has been a subject of vigorous debate. Critics say the code rife with distortions that critics say discourages companies from repatriating capital, and lead to strategies like “inversions” that encourage firms to merge with foreign companies, and move operations abroad to avoid higher taxation.
Cook insisted Apple was no tax dodger, and pointed out that the company earns most of its money abroad.
“We pay our share and then some,” the CEO told The Post. “We didn’t look for a tax haven or something to put it somewhere. We sell a lot of product everywhere.”
The European Union has also taken aim at Apple for taking advantage of Ireland’s tax structure, which is the lowest in Europe, with the European Commission probing allegations that the tech giant landed a “sweetheart tax deal” with the country.
Many multinational companies have flocked to the Emerald Isle for tax purposes. Cook told The Post that Apple hasn’t done anything any other company hasn’t, and said the basic argument was really a matter of tax arbitrage.
Cook said there was a “tug of war going on between the countries of how you allocate profits,” saying people “really aren’t arguing that Apple should pay more taxes. They’re arguing about who they should be paid to.”
The correct answer to Cook’s last question is: No one. Whatever business spends its profits on — reinvestment into the business, more pay for employees, more dividends for shareholders or some combination thereof — is vastly preferable to giving money to Govzilla at any level. The benefit of business as a provider of goods and services, an employer and a community member should mean business should not pay any profit taxes at all.
Apple and every other business that avoids taxes is fulfilling their first duty as a business — to maximize returns for their owners. You want to get that money back into the U.S.? Cut their taxes. No taxes, no tax breaks, and no lobbying for tax breaks.
Cook’s statements reveal the wasted opportunity of the Republican Party in this election. Eight years of high taxes and Government Knows Better Than You regulation have created our current craptacular economy of minimal growth and unemployment and inflation the government isn’t telling you about. Every business person in America should be voting for Republicans, but they won’t because of the continuing clown show that is Donald Trump, an embarrassment to American business and politics. Silicon Valley should be sending millions of dollars in contributions to GOP candidates, but the party’s excessive focus on social issues means that won’t happen either.