Tim Cook from Apple testified to Congress yesterday. To summarize, Apple moves money around the world to reduce/eliminate taxes as the law proscribes.
Our tax laws make this possible! This is a face palm moment, right?
Before we let Apple off the hook, let’s remember tax policy is greatly influenced by lobbying which is paid for by people/corporations whose ox is about to be gored.
During the last election Mitt Romney said he paid all the tax he owed and not a penny more. Left out was these were tax rules Bain Capital had rallied for.
What I’m getting at is, when someone says they’re just following the law, take that with a grain of salt.
Meanwhile, what’s going on here with Apple has been going on in England with Google.
From BBC.com: Google’s boss has told UK politicians to “sort out” the tax system, after criticisms of the internet search giant by Labour leader Ed Miliband.
Mr Miliband told a meeting of the firm’s staff that he was “disappointed” it had paid just £6m in corporation tax on UK sales worth £3.2bn in 2011.
But executive chairman Eric Schmidt said Google followed “the tax laws of the countries we operate in”.
I’m sure they have, but I close my eyes and see accountants playing Twister on the books!
There was a time when big business and the American dream were closely aligned. We could afford to give corporations a little slack, because in the end we knew they’d employ people and drive prosperity. Those days are over. We shouldn’t favor corporations with gifts for acts they no longer perform.
We can’t afford big corporations being financial takers. We just can’t.
Huffington Post: Citizens for Tax Justice, which advocates steeper corporate taxes, said it surveyed major U.S. companies and found that 26 on average paid no net federal income taxes between 2008 and 2011, among them General Electric and Duke Energy .
“This isn’t fair to the rest of us,” said Bob McIntyre, director of the left-leaning tax research group.
No joke. It isn’t.
This doesn’t just go on with money moving to Ireland or the Cayman Islands. There is a state-to-state competition as well.
Take a look at your phone bill (if AT&T is your home or cell carrier). Look down near the bottom for a copyright notice.
Since 2008 all of the current and past AT&T trademarks and previous regional Bell names are now owned by various Nevada Limited Partnerships based at 645 East Plumb Lane Reno, Nevada. This office location is currently an AT&T main office-formerly occupied by SBC/Nevada Bell.
That means when your Connecticut phone bill comes, a rights fee is paid to AT&T Intellectual Property for displaying logos, etc. That lowers AT&T’s taxes here by shifting the income to Nevada where there’s no corporate income tax! Any time you see an AT&T logo, money is being moved to Nevada.
The problem with fixing the tax code is those who want the code fixed (you and me) will be outspent and outmaneuvered by those who want to avoid paying taxes. I wish I had the solution.
Back in the Eisenhower administration, Charles Wilson was nominated for Secretary of Defense. He had been president of General Motors so there was concern he’d make any decision that affected GM in the company’s favor. He said he would not…
“because for years I thought what was good for our country was good for General Motors, and vice versa”. – Wikipedia
Those days are gone.
