Wuerker’s political cartoons on POLITICO are almost always spot on in what they are trying to convey. This week is probably the best time for an Apple ‘scandal’ to occur for the company in a month when there are more public scandals (Benghazi, AP, and most prominently the IRS). Essentially, the massive profits that made by Apple are being parked offshore to avoid the 35% tax on its repatriation back to the United States. Additionally, there are other tax loopholes (which are so commonly used by multinational corporations) that they are taking advantage of. Even the Senate committee that conducted the hearing in which the Apple CEO, Tim Cook, came in person to testify acknowledged that they did nothing legally wrong (in addition to their love of Apple products).
I wouldn’t normally side with the most profitable of companies, but I am compelled to show the hypocrisy being perpetrated. While it may seem bad what Apple is doing, they are not doing anything illegal. The reason that the committee is having the hearing is to shift blame of a bad economy from themselves onto companies that are doing exactly what their shareholders want them to do. Because they are so big, they are being picked on, but they are just merely the most public company, but not the only one, trying to get maximize the tax preferences littered throughout the tax code. The politicians could easily (well…maybe not easily, but in theory) reform the tax code to remove the preferences, but I have an uncanny feeling that they’d be making their rich contributors mad.
Going after Apple is short-sighted, but if it can lead to more substantive changes, then I’m all for it. I’m not holding my breath though…
- You: Apple chief calls for US corporate tax to be cut to single digits (guardian.co.uk)
- Apple Shows It’s Time to Abolish Corporate Taxes – Bloomberg (bloomberg.com)
- In Defense Of Apple Inc. (AAPL) (valuewalk.com)
- Apple’s Tax Dodges: Where’s the Public Outrage? (newyorker.com)
- Apple wants a tax cut as its reward for tax abuse (taxresearch.org.uk)