May 22, 2013
Apple’s Day At The Senate
We’ve discussed before how big companies save loads of money on their taxes, no?
These companies simply set up subsidiaries across the globe (one such Apple subsidiary is called “Braeburn Capital”, those clever Apple employees) and conduct business from there. Like other companies, Apple also operates an office out of Ireland to skirt some of these tax issues. This kind of practice might be unfortunate, sure, but it’s entirely legal and, depending on whom you ask, good for the company. This didn’t stop the US Senate Permanent Subcommittee on Investigation from calling Apple to Washington DC to explain their tax maneuvers.
The meeting wasn’t without a little grandstanding from Kentucky Senator Rand Paul (Ron’s son) who used his opening statements to let the entire committee know just how “offended” he was by being a part of the meeting.
It’s assumed (by this writer, at least) that Senator Paul is angling for one of those new watches.
“Tell me a politician who is up here and doesn’t try to minimize his taxes… Tell me what Apple has done is illegal. I am offended by a government… that convenes a hearing to bully one of America’s greatest success stories… If anyone should be on trial here, it should be Congress. I frankly think the committee should apologize to Apple,” ranted Sen. Paul in his opening statements, according to MacRumors.
And this is my favorite part:
“Instead of Apple executives, we should have brought in a giant mirror. This problem is solely and completely caused by our tax code. This committee should look in the mirror. I find it abominable.”
And it’s true…American tax laws have been criticized before as having too many loopholes which allow corporations to avoid paying what may be their fair share of the tax burden.
Of course, there’s also the other side of the argument which claims that these tax laws are fine and if a large corporation can save a buck or two in the process, so be it.
I’m not here to make any political statements, though.
Cook gave a well-practiced statement for the committee, taking care to mention all the jobs Apple creates in the States, including that upcoming line of Made in America Macs.
Some of the senators accused Apple for simply setting up a sham operation in Ireland with which to avoid paying taxes.
Apple has real operations, in real places, with Apple employees selling real products to real customers. We not only comply with the laws but we comply with the spirit of the laws,” said Cook in apple’s defense before accusing the slow and aging tax laws.
“Unfortunately the tax code has not kept up with the digital age. We are handicapped in relation to our foreign competitors who do not have such constraints on the free movement of capital.”
Of course, it’s not a day out for the CEO and CFO without some cheesy jokes.
Senator John McCain used the last of his precious time to take Apple to task over a much more personal issue he’s had with the company.
“Why the hell do I have to keep updating the apps on my iPhone? Why can’t you fix that?”
Yeah, C’mon Apple. Why the hell can’t you fix that?
Oh, by the way, the Senate committee largely found nothing wrong with Apple’s tax procedures. Of course.