Tim Cook will sat down for a wide-ranging interview with 60 Minutes host Charlie Rose for Sunday night’s episode inside Apple HQ, and it appears that the two will have a heated exchange about Apple’s tax practice.
In a preview of the interview released this afternoon, Tim Cook defended Apple’s tax policies, noting that the company pays more taxes in the United States than anyone. Rose also prodded Cook about the company’s massive pile of cash stashed overseas, asking why the CEO doesn’t bring all that money back home.
“It would cost me 40% to bring it home, and I don’t think that’s a reasonable thing to do,” replied Cook, before launching into a rant against the US tax code that was built for the industrial age and not the digital age.
Watch the heated exchange below:
JUST IN: Apple CEO tells "60 Minutes" that the notion of the tech giant avoiding taxes is "total political crap".
https://t.co/yGoxhM29fZ
— CNBC Now (@CNBCnow) December 18, 2015
Buster Hein is a freelance writer who lives in Phoenix, Arizona. Twitter: @bst3r.
12 responses to “Tim Cook on Apple’s tax avoidance: ‘That’s total political crap’”
Cook is completely right. US corporate tax rates are insanely high when compared to the rest of the industrialized nations. Even the Europeans know you cannot tax their corporations into the ground. Waive repatriation taxes or at least reduce them to about 5% and you’ll see a flood of money coming home to create more jobs.
“We pay more than anyone” is a juvenile response, to which Charlie correctly responds “you make more than anyone.” It is about a percentage, not a total amount.
“you’ll see a flood of money coming home to create more jobs.”
Cmon…if they were told tomorrow that they could have it back at 5%, you think creating more jobs would be where it goes? They manufacture their products (which I love, btw) in Asian sweat shops and pay slave wages. You think that would change if they got a tax break? Why can’t he man up and say “Apple is a corporation and we have a responsibility to make as much money as we can. We are beholden to shareholders and profits. We use the cheapest labor we can to get the highest profit margin on our products. We look at the tax code and figure out the best way for the corporation to keep the highest percentage of our money. That is what Apple is about. We build great products, we support a few causes but at the end of the day this is a company built to make money, as is any other corporation.”
And exactly how does that conflict with anything I said? Of course Apple is in the business of making money. That’s where it should be, because in the long run, that’s what benefits the economy the most. As for creating jobs, so many people seem to think that the job of companies is to hire people. No, it isn’t. Their job is to make money. But in the process of making money, they have to make great products (or services depending on the company). To make great products, it takes the ingenuity of their people. As they grow larger, they hire more people to make those great products.
Even the socialist Europeans recognize this and have among the lowest corporate tax rates in the industrialized world. Even the French tax their companies at 5%. The tax rate also influences the biggest factor in whether a company goes ahead with a project: the ROI, or return on investment. If the company has a high ROI, they will bankroll that project. If it doesn’t, they likely won’t. When a company has to whack out 35-39.6% of their projected profit right off the top, the likelihood of a project going forward diminishes. It will also make it more likely they will keep things in this country, rather than farming it out to other countries. The tax code and regulations make the cost of doing business high in this country. So the investment goes elsewhere.
It is the government, more than anything else, that encourages companies to go abroad where taxes and regulations aren’t as hostile. Just look at medical care where a full 1/3 of all expenses goes towards satisfying government regulations and paperwork requirements. And this is a $1 trillion industry. If you want companies to stay in this country, make it worth their while to do so. This is why Ireland fights so hard against the rest of the EU and threatens to sue them in order to keep their tax havens. They know that low taxes and regulations equals more jobs coming to their shores. And why every major corporation in America is a Delaware or Nevada company. The costs of doing business are less.
One gets what one pays for. Next time Apple has a problem doing business in China let Ireland intercede on his behalf. I am sure Ireland will have the influence to deal with the Chinese.
Pay your taxes!
I know they hid proffits overseas, bad
If I’m understanding this right, doesn’t Apple already pay taxes in the country in which they sell the devices?… Why should they be charged twice when they’re making the money overseas?
Because the overcharge each consumer?
Yes, they are taxed in the countries in which they do business and would be taxed again for bringing those profits home. And since when does government care about double taxation? All government cares about is taking more of your money. Just look at taxes on dividends. A corporation is taxed once on its sales of its products and services, and a portion of that income is given to shareholders in the form of dividends. That after-tax income is taxed again at the personal level.
So a corporation should get police and fire protection for free. It should have the use of public transportation systems such including roads without having to pay. At the same time corporate ownes should have the ability to hide their income in the corporate entity.
Not double taxation when one gets a credit for the tax paid to a foreign prince.
You should look up the difference between marginal tax rate vs effective tax rate. Once you realize the difference your whole argument falls apart from the get go. For example, Apples ‘effective tax rate’ for 2015 was 26% and they were one of the “highest” tax payers.