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Apple's Tim Cook Defends The Firm's Tax Policy Before The House - Webcast
Yesterday we opined on the deteriorating situation surrounding the much anticipated government scramble to collect perfectly legal offshored capital, initially focusing on Apple (which having now entered the focus of the US government will be nothing but an "negative externality" free utility going forward or as long as Uncle Sam wishes it to be) but soon to turn to virtually every other multinational corporation with a hugh cash hoard and a low effective US tax rate. Today, it is Tim Cook's turn to explain why the firm is merely following clearly laid out rules and tax regulations as encoded by none other than the same people who are bringing you today's particular episode of "distract them with witchhunts."
Watch it live at the following C-Span link:
From the subcommittee:
The Permanent Subcommittee on Investigations has scheduled a hearing, “Offshore Profit Shifting and the U.S. Tax Code - Part 2 (Apple Inc.)” on Tuesday, May 21, 2013, at 9:30 a.m. in Room 106 of the Dirksen Senate Office Building.
The Subcommittee will continue its examination of the structures and methods employed by multinational corporations to shift profits offshore and how such activities are affected by the Internal Revenue Code and related regulations. Witnesses will include representatives from the Department of the Treasury, the Internal Revenue Service, representatives of a multinational corporation, and tax experts. A witness list will be available Friday, May 17, 2013.
The full witness list:
PANEL 1
- J. RICHARD HARVEY, Villanova University School of Law
- STEPHEN E. SHAY, Harvard Law School
PANEL 2
- TIMOTHY D. COOK, Chief Executive Officer, Apple
- PETER OPPENHEIMER , Senior Vice President & Chief Financial Officer, Apple
- PHILLIP A. BULLOCK ,Head of Tax Operations, Apple
PANEL 3
- MARK J. MAZUR, Assistant Secretary for Tax Policy, U.S. Department of the Treasury
- SAMUEL M. MARUCA, Director, Transfer Pricing Operations, Large Business & International (LB&I) Division, Internal Revenue Service
Full Tim Cook testimony:
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apparently, some animals are more equal than others.
i smell a VAT
...or corporate AMT.
With loopholes, there are always plenty of loopholes. No shrinkage for the tax code.
All a side show to distract from Benghazi...start the impeachment process
Congressman: So you willfully avoided billions in taxes?
Apple: Yes.
Con: How could you do that? Doesn't it bother you that others were paying their fair share?
A: No, because we were paying or fair share.
C: That's outrageous, coming before this committee and claiming that! How can you say that!
A: Because we paid what was due under the code
C: Well I don't like that answer!
A: You guys wrote the tax code we obeyed so if you don't like it, change the code, dipshit
Hypocrisy of the first order.
Congressman: Blah, blah, blah, blah, blah?
Apple: Fuck you. That's why.
Also accepted: "Well, if you people weren't so damn evil, perhaps we'd be more conciliatory to your position."
Tim Cook gets to defend himself against fuckface McCain, a member of the Keating Five, as well as Carl "Marx" Levine, who is blasting all this shit out there to take heat off of Obama's multiple scandals.
Someone who is legally avoiding taxes gets to defend himself against a panel of criminals. Another day, another similarity to the decline of Rome.
Lovely.
And, incidentally, if you want The US to have the highest Corporate Tax rates in the G-20, are you surprised that AAPL would do this? If not, you might like to forget the fascism and stop milking the Middle Class "Tax Donkeys"?
Kibuki theater for the masses. The tax code is the way it is because Apple and its ilk pay off our politicians to write the tax code so these corporations don't pay shit. These hearing won't change that fact. NOTHING will change because the same politicans berating Apple in public are whores who will suck-off Apple in private in exchange for so-called campaign donations (bribes).
Don't hate the playas, hate the game.
AAPL: "We're just taking advantage of the various loopholes that Exxon/GM/GE/ADM bribed (oops, I meant contributed to campaigns!) various politicians to put in the tax Law(s)!"
I agree 100% with Apple, when its our turn for tax evasion, we shall repeat the exact webcast to the judge..and we better get the same outcome..
Ever notice the Apple toting people that slam Walmart as the most evil corporation ever yet Apple is well, Apple.
Let's compare:
iCrap made in China. Walmart crap made in China.
Apple Store workers paid crap. Walmart workers paid crap.
Apple markup 500%. Walmart markup 100%.
fuck apple... maybe someday they will learn how to build a computer again
The world only needs so many one button devices.
I could use one to substitue for my wife (she ain't no spring chicken any more!)
Where are those suicide-bombing terrorists when they could do something good for mankind? ;-)
Their friends from the CIA should know
BOOM!
The laws were written by the lobbyists for the benefit of a few, not for our benefit. Until paid lobbying is outlawed, expect nothing to change.
this x 1000000
Because outlawing stuff makes it go away. Can't believe people on ZH are still this fucking naive.
obviously it wont go away, but until lobbying legislation changes (which it wont), more of the S.O.S.
When a corporation does it, it's called "lobbying".
When an individual does it, it's called "Bribery".
One of these things get's you thrown in jail, the other places you on the S&P500.
Yet, they are the exact same thing.
Welcome to the banana republic of amerika.
Statists in general have a really hard time understanding that all this shit is just made up, with absolutely NO basis in ethics (or any other shiny ideals used to justify it).
All they know is the seen. The unseen, on the other hand, might as well not even exist to them.
Outstanding
Lobbying per se is not the problem. The fact that the federal government is so deeply entangled with commerce such that the ROI for lobbying far exceeds the ROI for innovation is the problem.
I beg to differ. Lobbying is the problem.
See Solyndra, Fisker, hedge fund tax rate, ...
Lobbying is merely a symptom. The true problem is a coercive, external, yet centralized government which empower narcicistic psychopaths over the whole of the population.
The only coherent form of government is self-government. Anything less is but a madman with a gun shouting, "Do as I say and nobody gets hurt."
The average politician will sell their soul for a $1,000 campaign contribution. The ROI on lobbying and pitifully small campaign contributions is staggering. 100X at least when $1M+ tax breaks are buried all through 1,000 page laws. Where you have to pass it to see what is in it.
Wonder if Levin will go through his scatological adjectives in reference to AAPL's tax structure.
"Mr. Cook, can we not say that this is a shitty tax cheat.?"
I'm actually sympathetic to Apple on this one. I don't like paying taxes either, look at where it goes - to the labyrinthine military protectorate and McMansion battery complex of Virginia/Maryland.
Apple doesn't pay taxes for shit, Braeburn Cap's sitting on a cool ~130B (or higher now?), and you sympathize with them?
Taxes don't even make a pebble's dent compared to M2 supply - they're only still around to uphold the status quo. And guess what upholds the status quo even better? More taxes.
I can sympathize with tax avoidance, all tax avoidance has the same nature. On these grounds I sympathize, and none other. Do you think tax collection will turn the nation around? You would be wrong.
Exactly. This is tax avoidance which is entirely legal, moral ethical and within the bounds of all laws and regulations.
Congress write the tax code
If they don't like it, they can change the code, eliminate the fucking loopholes....
This is grandstanding of the first order.
Sorry some of ya, but I'm with Apple and any other company or individual in the same position.
Congress created the fucked up code like this in exchange for donations/contributions...
They crated the monster and now are searching to cite others as the evil doers.
Fucking hypocrisy.
There is absolutely nothing moral or ethical about the theft that is taxation (though I get your point).
I just love how some people on this thread can demonize anyone who dares to make an effort to avoid theft. Better yet, they use jealousy to claim that it's not fair, because they let the criminal cartel steal from them.
It's because many people are misguided in they believe tax professionals only work for big corporations and the loopholes are only for big corporations... Not so... most people are simply lazy and too afraid to pick up the phone and call some local accountants, laboring under the expectation that they can't afford the services... probably not so... a couple of the most obvious loopholes for the plebs are treatment of s-corp self employment tax and the standard mileage deduction for business use of automobiles...
Oh please. Any competent tax accountant is going to charge $1,000+ for a tax return to "save" what - a couple of hundred bucks? Maybe? And they are far more terrified about pissing off the IRS than anything else. Not going to "push" any tax approach that has any remote chance of being challenged by the IRS. The customer is just the dumb muppet paying their fees.
The sign spinners in the Statue of Liberty getups and such are 20 hour training wonders who can barely fill out TurboTax. The average schmuck has no, nada, zero access to any meaningful tax help.
Starting yer own business (even if it's part-time) allows you to fill out Schedule-C (and unfortunately, Schedule -SE), which has lot of deductions on it!
Bullshit. You never charge your client more than you save them... that's the whole point... It's perspectives like yours that keep lower socioeconomic tiers from benefitting.
Some situations are dead ass losses... like dealing with an IRS audit... but the whole point of tax planning is that you save the client more than you cost the client.
Do you really think you're going to retain many clients if you don't do this? How many suckers are going to come through the door before the rest of the lot get wise? Do you really think that a competent tax accountant isn't going to discuss fees up front? This isn't some "gotcha" routine where you bait and switch and hope the people never complain to your board...
If the guy you call is on the up and up, then he (his secretary) can tell you over the phone that your tax issues aren't worth him messing with... simple as that... takes 2 seconds.
i think rand paul would agree with you.....and how much does mccain hate him.....
Corporations are not taxpayers. They are tax collectors. Period.
period -> .
God forbid a company tries to uphold their fiduciary duty to the shareholders by maximizing profit and not giving it to the government.
John McCain makes me sick.
Fuck You Congress- every one of you lying stinking shitstains
The politicians want us to focus on the equality of the theft rather than the theft itself. I is a not so subtle admission that they believe that all money is theirs and anyone so ugly as to be hording it from them is obviously rotten to the core. At my age I'm sick of being "parented" by a bunch of egotistical lurches. Don't tread on me!
Yes, distract them with shitty witch hunts.
and all you ever find is a smelly wart
Claim outrage (oft out of the blue) hold hearings, debates, propose solutions, draft legislation, amend legislation, pass legislation...
Which has nothing whatsofuckingever to do with the initial focus of the outrage and hearings .... and in fact creates a whole new panoply of loopholes for the very same folks congress was outraged at in the first place to take advantage of....
It's good being iKing
My question: Just where the fuck is "FATCA" for these corporate entities !!!
Attention deficit disorder has destroyed America. It must be all the GMO's and chemtrails. Probably the flouridated water too & MSM too.
But Congress still seems to be able to pass 1000 page bills screwing everyone almost daily while the show goes on.
Does anyone even still remember that Obama and his cronies, called an administration, committed crimes as recently as yesterday?
Sorry, I was busy updating my facebook while posting a tweet about my facebook update while I was watching 0Dark30. You say something?
You left out the vaccines and HAARP.
How many times do I have to rem.. uh..
remind...
uh..
that.
uh..........
Dancing with the Stars is on Tonight....
I think...
uh
Name me one presidential administration since the end of world war 2 that went even one singular fucking day without breaking the law?
Don't act as if the current puppet is any different than any of puppets that came before him.
You got the government you deserve. Deal with it.
Tim Cook: Mr. Levin we are only using the tax shelters that you voted yes on to help establish them in the first place.
Mr Levin: This is an outrage!! The morons that passed this legislation should be fired!
asst: - sir-
Levin: We will not stand for this
asst: but sir...
Levin: Hear me out...Congress will get to the bottom of this. And those lobbyists that wrote this nonsense will be held accountable!
They need to triple our campaign contributions....
Leave Tim alone. My Apple products work fine and he should be keeping them that way instead of wasting time in DC.
the only apple product i remember working well was IIE or was the IIGS.... whatever.... it was when floppy disks were floppy
Don't hate the player, hate the game.
Who's on first?
That's what I said.
It has always been easier to rob the poor guys. Fighting battles with the rich and powerful ones is just pointless.
Thats the way modern societies work.
And in a surprise ending to a rather flat testimony, Phillip A. Bullock burst out with, "Bullocks!!" whilst Mr. Oppenheimer began quoting the Bhagavad Gita.
GIVE APPLE A FUCKING AWARD!
They did. It's called 185 billion tax free dollars. Beats the fuck out of any lotto going.
They should just put a giant circus tent around Washington DC. "Step right up folks, get you seats while they last for the greatest show on earth......today we have the amazing Pinochio Twins (Obama and Holder) whose noses grow and grow as they attempt to convince you that Benghazi was based on unfinished video trailer and both take the Sgt Shultz defense of 'I know nothing". Later we have Hillareous Hillary Clinton whose defense is the nursery ryme "The old man is snoring" since thelast time she was to testify she said she bumped her head, went to bed and couldn't get up in the morning. Finally we have the honorable John McCain who will swear that if one nickel is cut from the defense budget that is 17x larger than it's next competitor that all humanity will be in peril".
Defense Budget Story
One of my complete fucking bat shit crazy neo-con buddies (Yes, I've got some of them, too, who are no different in their detachment from reality than my uber-liberal buds... can't find many sane people out here in California...) who is a doctor said that if the defense budget is cut, then the "Taliban will be running our Health Care System"
Crazy shit, dudes and dudettes...
Meh, the Taliban might be an improvement.
Let's be perfectly clear here on this "perfectly legal" bullshit. It is only "perfectly legal" if you can afford to hire an army of attorneys and accountants to sort through the 175,000 pages of IRS psychobabble and find you a loophole big enough to drive a freighter full of cash through.
In my mind, "perfectly legal" means it applies to EVERYONE. Let's see anyone of us try to park any amount of money offshore to avoid taxes and see if they still view it as "perfectly legal".
Perhaps it might be useful to look back at a video posted on ZH a few short weeks ago called "The Tax Free Tour" and reexamine this "perfectly legal" tax evasion.
That's why its perfectly legal for Apple not to pay any iTaxes, but for you aliens of even high IQ its one o' them no tickie no laundry jobs.
Oh and BTW, before you can legally evade your iTaxes with a mountain of highly paid attorneys and accountants, you first need to have a mountain of iLobbyists to payoff a buncha legislators with iCampaign iContributions.
Then you're cookin' with somebody elses' iGas
No Sir, YOU are subject to FATCA !!!
when the oligarchy splits into globalists and statists.
Thats what happens when the titanic hits the iceberg; "we want our tax credits back, that we gave you when we were rich, hunky dorey as a country. 'Cos sonny boy now its YOU or its US."
When oligarchs fall out.
Who said "Taxes are for the little people?"
Who said "Taxes are for the little people?" It was Leona Helmsley
I suppose when people like Al Gore are rewarded for loyal service with millions...polticans get the message.
Apple has had to learn some tough lessons with their market cap/valuations going through the roof (artificially? - another debate)
I think this took them all by surprise and now their learning about the old story about the nail that sticks up... it get's hammered.
The polit bureau is drooling over the money Apple has so their trying to tax the shit out of them and come up with some clandestine manner in which to get big ol' wet bite out of all that money offshore.
The question is... why do corporation shelter money/profits outside of the U.S.? The answer to that points to the real problem.
if ya got enough of it it legal
invest in a congressman....for the future
It's a sad day when a company that creates so much must defend itself from following the rulemakers rules. Sad day for America.
Are you for real? Apple manufactures toys for adults.
What ain't Toys for Adults in this world?
They need $44 billion to create 44,000 ObamaCrony "Green Jobs".
Apple's new slogan - "We need More Steve Jobs - Less Green Jobs"
He's just mad because his crAAPL stock is down.
Apple must pay the Federal Reserve their cut, of the misuse, exploitation and death of Chinese workers.
Levin is slick.
Bringing up the Kennedy ghost and all.
www.youtube.com/watch?v=hDbsxWGsebc
(starts at 5.00 m)
Senator Carl "Shitty" Levin - "Why don't you like our Shitty Tax Code?"
Levin wears depends.
why doesnt AAPL just bring a copy of the US tax code and ask these fucking geniuses in Govt WTF????
I know...let's fuck AAPL up so they can lay everyone off and become SNAP-babies with the rest of us!
Do we also give SNAP cards to Chinese slave labor? Because I'm pretty sure that's the majority of Apple's (and most every other multi-nationals) work force...and let's face it, it's not as if Tim Cook is gonna take a pay cut.
Can I have the phone numbers of their Skadden Arps $5,000/hour tax lawyers...they're evidently doing an excellent job. Maybe I can get them do some 'pro bono' work.....
Fuck CONgress - 'nuff said......
Jeez lets try to connect the dots here...the wealthy hold the power of corporations through ownership of shares...we are experiencing EFFECTIVE lows in weatlhy tax rates and corporate tax rates via congress.
Enough already with defending the myth of wealthy 'job creators'.
If I was giving testimony it would of went like this:
I have a few simple questions.
What did the IRS do, to earn the tax payments they demand from apple and the rest of us.
What contract did I/we sign that makes us liable to pay said demands?
Thank You, that is all.
You don't "owe" money to the irs, because you never borrowed any from them.
You don't "pay" the IRS, because they did not provide you with any good or service of equal value.
So, why are you "gifting" money to the IRS, and why isn't the IRS paying taxes to YOU (you are actually the nation) on the money that is being gifted to them?
Same with the Federal Reserve and all the other corrupt, fraudulent institutions.
Say what you want, but the IRS and Federal Reserve are IN-FACT CRIMINAL ENTERPRISES, its just WHAT THEY FUCKING ARE.
People have been living with blindfolds on for WAY TOO LONG, WAKE THE FUCK UP THESE INSTITUTIONS ARE FRAUDULENT INSTITUTIONS WITH NO GOOD REASON TO EXIST, YOU ARE PAYING TRIBUTE TO FOREIGN BANKS.
so you dont file or pay taxes?
I see the Eat the Rich Crowd is back.
Newsflash to some of you pinkos: the US is not master of the universe. Their laws don't apply everywhere. Apple sells great products. People overpay for them. The company makes gobs of money and had no debt for years. They pay their taxes.
Just because they have $100bn in cash overseas, a completely hypocritical and bankrupt congress start licking their lips and rubbing their hands together and berates the company's executive on television while a couple of academic cocksuckers discuss our "arcane tax code". (whereby people are allowed to keep the fruits of their risk taking).
Maybe they should just say what everyone knows is the case "no way in holy fuvk will we bring it back to the US, we get taxed and regulated and there's nothing worth investing in the US because you've already taxed and regulated the shit out of that too".
What they should really do is build a statue of a giant middle finger in Arlington, VA overlooking Mordor.
Taxation is theft and no more moral than outright robbing someone.
"Taxation is theft and no more moral than outright robbing someone."
Taxing income and assets is theft...repeal the 18th amendment, taxation should be based upon direct activity i.e. user fees and consumption taxes
If the little people perform 2 legal transactions in order to avoid taxes, according to IRS Step Doctrine, this process is illegal. Yet, these corporations can get away with it.
What a waste of a Senate seat. Carl Levin is a complete fucking twit! If he doesn't like the laws that he and the rest of congress have made, then he can lead the way in changing them.....oh wait.....crickets
Let all be reminded, businesses do NOT pay taxes, EVER.
Businesses pass ALL costs, taxes included, on to their customers in the form of prices. All Apple did was keep their prices $44bil lower enabling more people to be able to afford an Apple product.
What the pols and crats are saying is that they missed an opportunity to steal an additional $44bil. from Apple's customers. Now they want to try to shame and blame the executives before the pols' and crats' impoverished victims, the American sheeple, to try to squeeze even more from the stone.
And another thing: there is NO such thing as "fairness" when it come to the theft that is taxes. To the degree that the pols and crats get their hands on less, just means that their is more for us, the producers.
hujel
Amen, businesses and their owners always pass on virtually if not all of their higher costs of doing business -- whether they be due to taxation, litigation, or compliance with new regulation -- to others. They pass these new costs on to their customers and clients . . . as well as to . . . their EMPLOYEES!
Their employees bear this new cost, in part, in the form of less potential compensation, if not outright layoffs or cancelation of what would have been, otherwise, a new hire.
Doesn't making the tax system more progressive actually make the disparities of wealth and income even greater?!!!
Completely false. Corporations charge as much as they can get for thier products, what the market will bear. They do this no matter the tax rate on their profits. Higher taxes on profits means that less profits for investors, not higher prices for customers. If only people who comment here knew something about supply and demand.
I doubt you have ever managed a business with any substantial complexity, as many are today.
Every time I have ever seen business costs for a business go up (for any reason), I have seen business managers figure out ways to re-focus their businesses on their core business activities which are most profitable for them -- and which therefore produced the most value for their customers and clients. They then eliminated the more extraneous, less-value-producing business activities, laid off or reassigned with reduced compensation (or at least the potential thereof), and reduced future hires regarding the staff members conducting those more extraneous business functions.
They have also passed on these costs to their customers and clients any way they could, but you're right, there's a point where that is counter productive to future sales if excessive.
Don't tell me that the customers, clients, and employees don't bare a substantial portion of the increased costs, however -- be they due to taxation, litigation, or compliance with regulation. That is obviously true in my experience. Why else do you think food prices have gone up so much in recent years? You mean the food producers didn’t just absorb all of the new costs of doing business? Of course not.
You and I paid for most if not all of them.
Regarding food prices going up, we can probably be substantially thankful to our country's ethanol policies, here in the US, for this happening. Thanks alot Dems and Repubs!
You have apparently forgotten that the market will "bear" [sic] a much higher price basis for all of the producers of something, if all of the producers have to pay the same new cost of doing business -- such as with the AFFORDABLE care act which can only apparently make healthcare and having an employee in this country, more expensive, as a cost of doing business!!! You're completely nuts if you think the producers are going to eat the costs of that one, in my hopefully humble opinion. What part of competition do you not understand?
The most under-reported (if it was reported at all) item of the day would appear to be the following:
Isn’t AAPL legally obligated -- through their fiduciary obligations to their shareholders – to pay the least tax they legally owe??!!!
Doesn’t that mean they would apparently have been subject to substantial penalties by shareholders’ lawsuits, if not criminal prosecution, if AAPL had behaved as these politicians seem to be implying that AAPL should have behaved and substantially overpaid their tax bill?
In other words, if AAPL had substantially overpaid its taxes beyond their legal obligations, they would have apparently been in violation of a different legal requirement, of at least civil if not criminal law, right? I’m no lawyer, but I swear I have heard of companies being sued for stuff like this, haven’t I?
What arrogance of these politicians to condemn a company for following the law instead of possibly breaking it!
If there are legal “loopholes” to the law (and not legitimate deductions for real business expenses), who is more culpable, the company that follows the law, or the politicians who chastise a company for NOT possibly breaking the law!
'And, while the same politicians fail to correct the so-called "loophole" to the tax laws!