Woz: Apple should be forced to pay a lot more tax

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Steve Wozniak wants Apple to pay its fair share.
Photo: Madame Tussauds

From saying that he doesn’t want to be stuck in the Apple ecosystem to advising Apple to build an Android phone, Apple co-founder Steve Wozniak has said a lot of things that probably don’t go down too well at his former company.

His latest comments, however, put him more directly in the sights of Tim Cook — as Woz uses a new interview to take a shot at Apple’s tax payments. His thoughts? The company should pay more than it does. Half of everything it earns, in fact!

“I don’t like the idea that Apple might be unfair – not paying taxes the way I do as a person,” Woz said in a U.K. interview with BBC Radio 5 Live. “I do a lot of work, I do a lot of travel, and I pay over 50 percent of anything I make in taxes and I believe that’s part of life and you should do it.”

He then clarified his position by saying that this is something “every company in the world” should do.

Apple, like many multinationals, has a complicated tax structure, which involves channeling a lot of its business through subsidiaries based in the Republic of Ireland, where the corporation tax rate is much lower than elsewhere. While it pays 35 percent tax in the U.S., it has also previously admitted that two of its subsidiaries pay a rate of just 2 percent — while the company’s offshore tax reserves are in the region of $200 billion.

“We didn’t think we’d be figuring out how to go off to the Bahamas and have special accounts like people do to try to hide their money,” Woz said of the early days of Apple — although he does say that making money was one of Steve Jobs’ big motivating factors in starting a company: “Steve Jobs started Apple Computers for money, that was his big thing and that was extremely important and critical and good.”

Apple has always been insistent that it pays all the tax that it owes. During last year’s “Inside Apple” episode of 60 Minutes, Tim Cook labelled reports that Apple doesn’t pay its taxes as, “total political crap.” In the same interview he also railed against the idea of U.S. tax codes built for the industrial age instead of the digital age.

“It would cost me 40% to bring [Apple’s overseas cash pile] home, and I don’t think that’s a reasonable thing to do,” Cook argued.

Recently, E.U. investigators of Apple’s tax arrangement admitted that even repatriating Apple’s cash pile by bringing it back to the U.S. wouldn’t halt their investigation.

“Steve Wozniak’s comments that Apple should pay more tax would have had more weight had he still been playing an active role in the company that he helped found 40 years ago,” says Crawford Spence, a professor of accounting at Warwick Business School who is researching tax avoidance. “Now, he is just another concerned citizen baffled as to why corporate behemoths like Apple manage to avoid paying tax at the same rates as many individuals, or even other companies, do.”

However, Spence adds that if more public criticism was showered upon Apple regarding this point, it might “start to force a rethink about whether tax minimization strategies are really good for business or not.”