Quoted: on Apple and offshoring profit to avoid taxes

“I think it’s important to make clear the admiration we have for Apple, the incredible changes Apple has caused in our lives. However… Apple is one of the biggest tax avoiders in America.”

Sen. John McCain, R-Ariz., during a Senate subcommittee hearing Tuesday morning about shifting profit offshore, where Apple CEO Tim Cook was scheduled to testify after the politicians had their say. For his part, Sen. Rand Paul, R-Ky., said he was “offended” that the “great American success story” that is Apple was “dragged” to the hearing. The Merc’s Troy Wolverton wrote that one report released Monday “suggests that Apple has paid virtually no taxes on the $102 billion in overseas cash it held at the end of March.” Follow the Mercury News’ live blog here.

 

Photo of John McCain from Getty Images

 

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  • http://NA Charles SNyder

    Good for Apple – I see nothing wrong with the practice.

  • http://www.hitchcockpartners.com James Bradley

    Didn’t we learn from General Electric, and the others? There is no case to be made for paying taxes on principle. Any company that is responsible to shareholders is *obligated* to use all legal means to reduce its tax liability.

    The laws have to be changed, Senator. Stop bitching and change them.

  • Roger Draper

    If no laws are broken, it’s legal. It’s illegal to not pay what’s owed. It’s IMMORAL to pay any more.

  • Brett Murphy

    True. Apple is doing its best to maximize profits without breaking (maybe stretching) any laws. It’s in management’s and shareholders’, at least short-term, interests to make as much money as possible. But it is our society, using government as the process, that gets to decide how we want all of this to work. And what is in the best interests of our society as far as the behavior of corporations is concerned? That’s what we have to change the laws to effect. What would be great is if we could figure out how to shape the behavior of corporations so they try to build long-term value for all stakeholders, as opposed to being so focused on short-term profits. There are lots of ways to build profits by desroying value. And vice-versa.

  • KaleSplit

    Their competitors do the same, so they should all get caught in any new legislation. Make them pay more tax anywhere, and up go the prices. Bear in mind that the sole creator of inflation is the government.

  • bobr

    In the words of US Supreme Court Justice Learned Hand in a decision that stil stands today –

    “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”

    Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934), aff’d, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935)

  • Doug Pearson

    Apple in only the latest in a long line of businesses and people paying taxes that are “too low”.

    No business or person should pay a tax that is lower (or higher) than the law requires. If the Congress believes Apple and that long line of other businesses and people should pay more, the Congress should change the law.

    In total, Federal income taxes are too low, in my opinion. The law needs to be changed to cut back on the tax expenditures that benefit the richest taxpayers, while their marginal tax rate needs to go up. The 39.5% rate should go to 40% and two new tiers should be added above it with rates of 45% (taxable income above $1 million) and 50% (taxable income above $1 billion). A bonus: If the Congress makes the tax law fair for the poor and middle class, as well as the rich, then the Alternative Minimum Tax can be repealed.

  • KaleSplit

    I agree with Doug and would add that the bottom line is about the standard of living in a society. If the governments at all levels receive enough revenue to deliver services that the citizens demand then the tax laws and collection of taxes are working.

    It is simply not legal for a company to pay more for anything, including payment of taxes, than is required. To do so would be stealing money from shareholders and that just won’t do.

 
 
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