Apple CEO Tim Cook is meeting with Congress to advocate for a simplification of the corporate tax code and defend his company’s tax-paying practices.
Policymakers are meeting in Washington to discuss how to change the tax code to encourage United States corporations to bring their foreign earnings back home. In an interview with The Washington Post, Cook said he will go before the Senate Permanent Subcommittee on Investigations with specific policy ideas that he believes would give companies incentives to bring money to the U.S.
The subcommitee will examine the profit-shifting activities of multinationals such as Apple to determine how well they comply with the current Internal Revenue Code. Cook brought with him two other Apple executives, Senior Vice President of Apple Peter Oppenheimer and Philip Bullock, the head of Tax Operations, to help make his presentation.
With about $145 billion in cash, Apple has one of the largest stockpiles in the world — much of it currently located outside the U.S. It is estimated that Apple has around $100 billion in foreign accounts. Tim Cook told The Washington Post that it simply costs companies too much money to bring foreign money home to the United States. It currently costs 35 percent of the cash a company keeps overseas to bring that money into the country, a figure that Cook called “a very high number.” He will not propose that the tax be zero, but something that he thinks is more “reasonable” than the current rate.
The head of Apple is a fitting person to lead the case for tax reform since it is perhaps the biggest tax payer in the entire country at around $7 billion in federal taxes this year. “When you combine state and federal, Apple is paying approximately $1 million an hour in just domestic income taxes,” said Cook. And, being a tech company, Apple can more easily push its profits into markets outside the United States because its products are based mostly on intellectual property rather than physical property.
Cook will face hostility from politicians who think tech companies like Apple are not paying enough in taxes. Sen. Carl Levin (D-Mich.), who is chairing the hearing, said at a similar hearing last year that technology companies were “probably the No. 1 user” of offshore accounts used to avoid U.S. taxation. Cook defended his company’s policies as he gives his recommendations on the tax code. In an interview with POLITICO, he defended Apple from any wrongdoing regarding taxes, “I can tell you unequivocally Apple does not funnel its domestic profits overseas,” he said. “We pay taxes on all the products we sell in the U.S., and we pay every dollar that we owe.”
[cf]skyword_tracking_tag[/cf]
No Comment