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Tim Cook testifies: Apple pays all of the US taxes it owes

post #1 of 94
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Appearing before a U.S. Senate subcommittee on Tuesday, Apple Chief Executive Tim Cook defended his company as a proud American business that pays more in taxes than any other U.S. corporation.

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Cook's opening remarks touted Apple's pride in being an American-born company that has contributed billions of dollars to the U.S. economy. He noted that Apple paid $6 billion to the U.S. Treasury last year, and reiterated the fact that the company has directly or indirectly been responsible for the creation of 600,000 American jobs.

"Apple has real operations in real places with Apple employees selling real products to real customers," Cook said. "We pay all of the taxes we owe ? every single dollar. We not only comply with the laws, but we comply with the spirit of the laws."

Cook, along with Apple Chief Financial Officer Peter Oppenheimer, was called before the U.S. Senate Permanent Subcommittee on Investigations, which is looking into loopholes in American tax laws. The subcommittee has chosen to focus on Apple, because of what officials have called a unique strategy of utilizing "ghost" corporations in Ireland to avoid U.S. corporate taxes.

As part of its testimony, Apple has asked legislators to consider making sweeping changes to the U.S. tax code in its current form. The company has more than $100 billion in cash stored overseas ? money that Apple executives have no current plans to repatriate because of the tax rates.

"It would be very expensive to bring that cash back to the United States," Cook told the subcommittee. "Unfortunately, the tax code has not kept up with the digital age."

The Apple CEO also made note of his company's plans to assemble an entire Mac line in the U.S. this year. Cook revealed to the subcommittee that those machines will be assembled in Texas, though he declined to name specifically which product will be made in America.
post #2 of 94

Here's a live blog: http://blogs.marketwatch.com/election/2013/05/21/live-blog-of-senate-apple-hearing-with-ceo-tim-cook/

 

Here's the live video: http://www.hsgac.senate.gov/subcommittees/investigations/hearings/offshore-profit-shifting-and-the-us-tax-code_-part-2

post #3 of 94

John McCain is an asshole.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #4 of 94
Cook has so much more class than McCain.
post #5 of 94

McCain's questioning of Cook shows he's completely lost it...... what a clueless man.

 

Sad day for AZ, and a once-great senator.

post #6 of 94

Excellent! Will need to watch it on my Mac, as I can't find a Flash player for my iPad...
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post #7 of 94

California cool trumps DC sleaze.

post #8 of 94

Cook's answer regarding 'unfairness', while decent, should have simply pointed out to McCain that the true unfairness is in how US multinationals like Apple that are disadvantaged compared to non-US competitors who are incorporated in countries with a territorial (not worldwide) taxation system.

 

I am truly surprised that he did not bring that up.

 

Doesn't say much -- at least, to me -- about the quality of the advice he's getting from Oppenheimer and crew on this.

post #9 of 94
Quote:
Originally Posted by PhilBoogie View Post


Excellent! Will need to watch it on my Mac, as I can't find a Flash player for my iPad...

Should work on the iPad: http://www.nbcnews.com/video/nbcnews.com/51950319

 

Currently they have a ten minutes break.

post #10 of 94
Quote:
Originally Posted by anantksundaram View Post

McCain's questioning of Cook shows he's completely lost it...... what a clueless man.

 

Sad day for AZ, and a once-great senator.

He did much better than Levin's question's. That man seems to not know any of the laws he has helped pass.

post #11 of 94
The other thing Apple should say, besides the $6B they pay in corporate taxes, they should also state how much employee withholding they pay the government for salary plus stock option payouts. They also point out how much they collect for SS and pay to the government.

Not only do that pay corporate taxes but all the highly paid employee they employ in the US also pay taxes. This is the part the government never factors in, as long as companies pay their people well the government get more money since individual have far less loop hole.
post #12 of 94
Quote:
Originally Posted by anantksundaram View Post

Cook's answer regarding 'unfairness', while decent, should have simply pointed out to McCain that the true unfairness is in how US multinationals like Apple that are disadvantaged compared to non-US competitors who are incorporated in countries with a territorial (not worldwide) taxation system.

 

I am truly surprised that he did not bring that up.

 

Doesn't say much -- at least, to me -- about the quality of the advice he's getting from Oppenheimer and crew on this.

 

It's probably better to stick to the facts and numbers. Don't get drawn into what and what is not 'fair'.

post #13 of 94
It is amazing to me that the 2 Senators questioning so far (Levin D MI, McCain R AZ) refuse to understand that this money was earned in foreign countries and all taxes were paid in those countries. The fact that Apple chooses to concentrate management of the profits centrally in Ireland is for efficiency and investment leverage.

All these 2 Senators see is that there is some multi-billion dollar amount that they think that they somehow deserve to tax!

I am ashamed and embarrassed to be governed by anyone so willfully stupid and stubborn.
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post #14 of 94
Quote:
Originally Posted by Rayz View Post

Quote:
Originally Posted by anantksundaram View Post

Cook's answer regarding 'unfairness', while decent, should have simply pointed out to McCain that the true unfairness is in how US multinationals like Apple that are disadvantaged compared to non-US competitors who are incorporated in countries with a territorial (not worldwide) taxation system.

 

I am truly surprised that he did not bring that up.

 

Doesn't say much -- at least, to me -- about the quality of the advice he's getting from Oppenheimer and crew on this.

 

It's probably better to stick to the facts and numbers. Don't get drawn into what and what is not 'fair'.

You have point there.

 

However, Cook is also wading into issues of tax reform (see yesterday's AI story on this, and Cook's testimony). The biggest -- and simplest one -- would be to move to a territorial taxation system: http://www.crs.gov/pages/Reports.aspx?PRODCODE=R41852

post #15 of 94

I would love to see Mr. Cook point out the list of other companies that end up paying ZILCH for taxes, like General Electric. Heck, GE even gets tax money BACK each year.

post #16 of 94

Rand Paul seems to be one of the few politicians with any common sense, at least in this case.

 

 

post #17 of 94

Not relevant to the discussion, but every time that nervous looking guy with the glasses and forehead glare/flop sweat speaks I want to use his name and shout "BULLOCKS!!!".

 

Not that I disagree with him, and he seems far more intelligent than the Mr. Johnson doing the (dumb) questioning.

 

How much is Congress paying Cook for this? I'm pretty sure an hour of his time is worth a pretty penny, and that's just for coffee. Fair is fair, and the market has already established his going rate.

post #18 of 94

I don't think I will watch this, I might snap listening to McCain vomit out more twisted, self-righteous drivel, attempting to crucify a company that has benefitted this country more than he could ever hope to do. His last few years have shown the man is nothing more than a vengeful, vindictive individual who is still butthurt by his 2011 loss. You know, when he made the cynical judgement of introducing us to Sarah Palin, out of a desire to win, and in complete contempt of this country. He's everything wrong with politics and politicians, and I can't believe I used to have a shred of respect for him. 

post #19 of 94

Sen. Ayotte brought up territorial taxation.

 

Cook's answer suggested to me that he did not quite understand the issue.

post #20 of 94
Quote:
Originally Posted by Dick Applebaum View Post

It is amazing to me that the 2 Senators questioning so far (Levin D MI, McCain R AZ) refuse to understand that this money was earned in foreign countries and all taxes were paid in those countries. The fact that Apple chooses to concentrate management of the profits centrally in Ireland is for efficiency and investment leverage.

That might not be true according to the Senate investigators. They report there's ten's of billions in earnings that have never been taxed by anyone as Apple doesn't claim any country of residence for a couple of those Ireland-located companies, and no Corporate tax filings were made regarding those for 5 years or more.

 

According to Apple themselves their overall tax rate on foreign earnings was 1.9% in 2012.

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post #21 of 94

I love Apple.  I've been a diehard Apple fan since the days of the Quadra.  But I don't like corporate trickery to get around taxes.  If Microsoft was doing this, we'd be ripping them apart.  I wish our government would close these tax loopholes.  I do think it's funny that Republicans are complaining, when they're the ones who fight to create loopholes for corporations and the top 1% in the first place.

post #22 of 94
I think Cook goofed on the statement, "It would be very expensive to bring that cash back to the United States," Cook told the subcommittee.

That money was never here in the US. So how can you bring it "back"? I think that sends the wrong message. People might think Apple sent $100B from the US to foreign countries. Not the case.
post #23 of 94
Quote:
Originally Posted by 2oh1 View Post

I love Apple.  I've been a diehard Apple fan since the days of the Quadra.  But I don't like corporate trickery to get around taxes.  If Microsoft was doing this, we'd be ripping them apart.  I wish our government would close these tax loopholes.  I do think it's funny that Republicans are complaining, when they're the ones who fight to create loopholes for corporations and the top 1% in the first place.

Please educate yourself -- at least a little bit, on this issue -- before spouting off.

post #24 of 94
I wish Tim Cook would have simply said that Apple pays all taxes it owes and if they (politicians) have a problem with that they should get off their fat worthless asses and change the tax code. Then, he would just stand up and walk out of the room.

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post #25 of 94

The U.S. government is crying because Apple refuses to give them billions of dollars for free, in addition to the taxes they owe.

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post #26 of 94
Quote:
Originally Posted by 2oh1 View Post

I love Apple.  I've been a diehard Apple fan since the days of the Quadra.  But I don't like corporate trickery to get around taxes.  If Microsoft was doing this, we'd be ripping them apart.  I wish our government would close these tax loopholes.  I do think it's funny that Republicans are complaining, when they're the ones who fight to create loopholes for corporations and the top 1% in the first place.


Apple doesn't get around taxes. They don't owe the U.S. a dime for their over seas sales. There is no loophole to close.

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post #27 of 94
Quote:
Originally Posted by Pendergast View Post

Not relevant to the discussion, but every time that nervous looking guy with the glasses and forehead glare/flop sweat speaks I want to use his name and shout "BULLOCKS!!!".

 

Not that I disagree with him, and he seems far more intelligent than the Mr. Johnson doing the (dumb) questioning.

 

How much is Congress paying Cook for this? I'm pretty sure an hour of his time is worth a pretty penny, and that's just for coffee. Fair is fair, and the market has already established his going rate.

 

Probably nothing. Most companies send representatives other than their CEOs.

 

Quote:
Originally Posted by 2oh1 View Post

I love Apple.  I've been a diehard Apple fan since the days of the Quadra.  But I don't like corporate trickery to get around taxes.  If Microsoft was doing this, we'd be ripping them apart.  I wish our government would close these tax loopholes.  I do think it's funny that Republicans are complaining, when they're the ones who fight to create loopholes for corporations and the top 1% in the first place.

Just because you aren't aware of something, don't assume it never happened. Commenting that the tax code is long or these are all loopholes really doesn't say much. It does annoy me when people start to assume Apple is the only company to be targeted on such matters just because of the events of a given day.

 

 

http://money.cnn.com/2012/09/20/technology/offshore-tax-havens/index.html

Quote:

The Senate investigation, which included subpoenas and voluntary correspondence with the companies, provided an in-depth look into how the companies set up and use overseas tax shelters, as well as the impact on government coffers.

Levin acknowledged that Microsoft has broken no laws. But he blamed a loose tax code, Congress and tax officials for allowing the loopholes.

"The tax practices and gimmicks range from egregious to dubious validity," Levin said. "What these gimmicks do is shift the burden of taxes to citizens that don't use armies of lawyers and accountants and subsidiaries to lower their tax bill."

post #28 of 94

Tim Took explanations regarding the AOI cashholder existance are very clear.  Its collects all the after tax profits from its internationnal subsidaries. This mean the foreign tax were all paid for, this is only place to hold the cash.

 

I was surprise to see the tax on the interest of that cash are paid in the US despite the fact that AOI as no country of residance. So in practice AOI pays its taxes like a US company.  I dont think Apple could be more fair than this. All the US needs is a way to bring that cash into the US at a reasonable rate...

 

For starters cash used to pay dividends should come to the US tax free or at a very low rate because the shareholdesr revieving those dividends will be tax on them...


Edited by herbapou - 5/21/13 at 10:27am
post #29 of 94
Quote:
Originally Posted by jd_in_sb View Post

The U.S. government is crying because Apple refuses to give them billions of dollars for free, in addition to the taxes they owe.

It's not about Apple per-se. Their "tax avoidance" numbers are just the best match for dramatizing the issue. FWIW that Senate tax committee also criticized HP and Microsoft this past fall, finding fault with their tax avoidance strategies during a similar Senate fact-finding hearing. Apple's bigger numbers are just more attention-getting.

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post #30 of 94

I see that Levin is a clueless dickhead too.

 

It truly saddens me that Apple needs to even deign to dignify these guys by their appearance and answering their questions. I only wish the US government were such a fucking tyrant that Apple could tell them all to go **** themselves without suffering the punishment that would be visited on them.

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post #31 of 94
Quote:
Originally Posted by Apple ][ View Post

Rand Paul seems to be one of the few politicians with any common sense, at least in this case.

 

 

I never considered myself a fan of Rand Paul, but I totally agree with him on this. Are there no other Senators that see that this is a bit of a witch hunt? Unless Apple broke the law, then they have no one to blame but themselves in creating a byzantine tax code. 

post #32 of 94
Quote:
Originally Posted by MJ1970 View Post

I see that Levin is a clueless dickhead too.

 

It truly saddens me that Apple needs to even deign to dignify these guys by their appearance and answering their questions. I only wish the US government were such a fucking tyrant that Apple could tell them all to go **** themselves without suffering the punishment that would be visited on them.

Levin is a complete fool and is being made a fool. Saying he is not vilifying Apple is an outright fabrication. Levin alone is on witch-hunt.

post #33 of 94
Quote:
Originally Posted by Dick Applebaum View Post

It is amazing to me that the 2 Senators questioning so far (Levin D MI, McCain R AZ) refuse to understand that this money was earned in foreign countries and all taxes were paid in those countries. The fact that Apple chooses to concentrate management of the profits centrally in Ireland is for efficiency and investment leverage.

All these 2 Senators see is that there is some multi-billion dollar amount that they think that they somehow deserve to tax!

I am ashamed and embarrassed to be governed by anyone so willfully stupid and stubborn.


I couldn't agree with you more.

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post #34 of 94
Levin - go F yourself. Apple has done nothing wrong. If you are going to target the biggest company, then you might as well go after every company including GE.
Great seeing how he can go after Apple and yet not worry about how screwed up his own state is!
post #35 of 94
Quote:
Originally Posted by jakeb View Post

 

I never considered myself a fan of Rand Paul, but I totally agree with him on this. Are there no other Senators that see that this is a bit of a witch hunt? Unless Apple broke the law, then they have no one to blame but themselves in creating a byzantine tax code. 

 

I guess even raging jackasses can be right on occasion.

post #36 of 94
All large US multinationals can avoid paying taxes on income derived overseas yet individual US taxpayers have to pay on worldwide income in BOTH US and Foreign countries.

The fact is the US tax code need serious reform and to be simplified. I'm all pro-business and fiscally conservative and need to be competitive, but reform is needed and corporate tax rates need to be reduced. However, the burden of US tax revenue comes from workers like me with very few loopholes.

And I live in California which makes my tax rate 33% 9%=42% other new taxes levels - this is insane for me. Nearly half of my paycheck is taken away.

There is some level of unfairness and it's not Apple but all US multi-nationals....needs some balance.
post #37 of 94
Quote:
Originally Posted by Dick Applebaum View Post

It is amazing to me that the 2 Senators questioning so far (Levin D MI, McCain R AZ) refuse to understand that this money was earned in foreign countries and all taxes were paid in those countries. The fact that Apple chooses to concentrate management of the profits centrally in Ireland is for efficiency and investment leverage.

All these 2 Senators see is that there is some multi-billion dollar amount that they think that they somehow deserve to tax!

I am ashamed and embarrassed to be governed by anyone so willfully stupid and stubborn.

It is truly staggering to watch them totally fail to understand isn't it? Are they really stupid or are they so used to sticking to their talking points they have lost the ability to actually think? Hats of to Tim, I know I would have rolled my eyes and sighed in the face of such moronic incomprehension. Although I guess history warmed him against that.

Not to mention Apple seem to choose to pay US taxes on the interest the post pax paid earnings it aggregates in Ireland. I would suspect they could have easily paid Irish level tax rates on that as surely they don't need the money here in the USA.
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post #38 of 94
FWIW...

Tim and Peter have much, much better hair than Levin & McCain!

...Then there's the matter of intellect, experience, right-thinking and business acumen!
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post #39 of 94
Quote:
Originally Posted by Dick Applebaum View Post

It is amazing to me that the 2 Senators questioning so far (Levin D MI, McCain R AZ) refuse to understand that this money was earned in foreign countries and all taxes were paid in those countries. The fact that Apple chooses to concentrate management of the profits centrally in Ireland is for efficiency and investment leverage.

All these 2 Senators see is that there is some multi-billion dollar amount that they think that they somehow deserve to tax!

I am ashamed and embarrassed to be governed by anyone so willfully stupid and stubborn.

I agree 100%. Apparently Mr. Levin doesn't get it. I just watched the half hour where he said over and over that Apple decided to shift the profits. That is exactly what they haven't done. The money was made and taxed off shore. Mr. Levin thinks that Apple should "shift" it to the US so it can be taxed. His argument that 95% of the IP was done in CA does not hold any water. The devices were almost exclusively built in China using Chinese factories and Chinese labor. I think that if Apple said to China that they were an American company so they weren't going to pay taxes except to the US there wouldn't be many devices shipping. So Mr. Levin thinks that regardless of where an American or American company earns its money it should have to pay taxes to the US. That is not what the tax code says.

post #40 of 94

Bottom Line: Companies do not pay US taxes on foreign derived income as long as income stays abroad yet American taxpayers are taxed on ALL income derived WORLDWIDE.

 

This is a double standard

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