The Public Pillorying of Apple for Legally Reducing Tax Burden

By:  Charles Scaliger
05/29/2013
       
The Public Pillorying of Apple for Legally Reducing Tax Burden

Last week’s show trial of Apple Computer on Capitol Hill ended up being more of an indictment of the Republican Party than of allegedly venal Apple executives accused of tax “avoidance.”

Last week’s show trial of Apple Computer on Capitol Hill ended up being more of an indictment of the Republican Party than of allegedly venal Apple executives accused of tax “avoidance.” The Senate hearing, convened by Senator Carl Levin (D-Mich.), was intended to shape public and congressional opinion of Apple’s practice of maintaining large capital reserves and profits offshore, where they are shielded from the 35 percent corporate earnings tax imposed by the U.S. government. Instead, thanks largely to the brutal honesty of Senator Rand Paul, the public pillorying of Apple turned into a sordid pageant of Old Guard Big Government Republicans and their Democratic allies against up-and-coming Tea Partiers like Senator Paul.

After a parade of pompous senators, including Republican John McCain, heaped ritual invective on Apple for the non-crime of seeking to minimize legally their tax liabilities, Senator Paul rose to the storied computer maker’s defense. Paul argued that many Americans — including politicians — seek to minimize their tax burden. “I frankly think the committee should apologize to Apple,” Paul said, blaming a “bizarre and byzantine” tax code "that simply doesn’t compete with the rest of the world.” America’s corporate tax rate, Senator Paul observed, is higher than that of Canada or the European Union, and capital always goes where it is most welcome; right now, it is more welcome in Canada and overseas. This, Paul insisted, is not the fault of Apple or any other large corporation, but of Congress. He pointed out that every man and woman in the room, senators included, always sought to minimize their tax burden under the law, and no individual or company would retain the services of financial consultants who advised them to do otherwise.

“Instead of doing the right thing, we drag businessmen and women in here to berate them for trying to maximize their profits for shareholders,” Paul said. “Apple has done more to enrich people’s lives than politicians will ever do.” He suggested — not entirely tongue in cheek — that instead of bringing America’s most productive citizens before a senatorial inquisition, Congress would be better served by bringing in a giant mirror, so that they could all see clearly the real cause of America’s fiscal woes.

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Photo of Apple chief financial officer Peter Oppenheimer, CEO Jim Cook, and head of tax operations Phillip Bullock: AP Images

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