Apple CEO Tim Cook, CFO Peter Oppenheimer, and Tax Operations Head Phillip Bullock, took the witness table recently at a congressional hearing on Capitol Hill to face U.S. senators who grilled the three men on Apple’s offshore tax practices. The Cupertino California company published Cook
opening statements that detail its now widely reported stance on a comprehensive U.S. corporate tax code form.
To summarize the whole event, both Senator McCain and Senator Levin did their best to accuse Apple of cheating the U.S. tax system by funneling earnings made overseas through its subsidiaries in Ireland, where the company pays ridiculously low tax rates. The fact still remains that there are still several corporations such as Coca-Cola and Microsoft, which resort to the very same tactics when it comes to exploiting loopholes in the U.S. tax system.
For those of you who missed it yesterday, the subcommittee yesterday published a 40-page report
which details a probe into Apple’s offshore tax havens. If this wasn’t enough, the subcommittee’s chairman Carl Levin ahead of the hearing issued an unapologetic media release
which accused Apple of seeking “the Holy Grail of tax avoidance” by creating “offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere.”
Somewhat unsurprisingly, Tim Cook made no apology today for his company’s tax strategy and escaped from Washington without much of an issue. Apple on its part remains adamant that the U.S. corporate tax which involves a whopping 35% on repatriated earnings is simply too high. Aside from that, Cook claimed the outdated tax system can’t keep up with the digital age and is thereby reducing the competitiveness of the U.S. economy.
Before the recent hearing, Apple previously published a 17-page document which outlines its push for a fair tax return. Apple quoted in today’s hearing that the company is proposing a revenue neutral tax reform. The company argued saying that the government should eliminate all corporate tax expenditures while lowering corporate income tax rates and implementing a reasonable tax on foreign earnings that allows free movement of capital back to the U.S. Those of you who are interested can watch the full video of Apple’s testimony on C-SPAN
For those who are even more interested in reading about the issue, the opening statement of Senator John McCain
and Senator Carl Levin
, along with the full testimonies of Apple’s Tim Cook
, Peter Oppenheimer
and Phillip Bullock
have been made available.
Source: Apple (1
, Senator Carl Levin (1
), Senator John McCain