Last Tuesday, May 21, two long-serving U.S. Senators showed the nation why we need term limits. Sen. Carl Levin, D-MI, and John McCain, R-AZ, used the bully pulpit of a Senate subcommittee hearing to show the world how indignant they are that Apple Corporation uses the tax laws to avoid paying taxes.
Who’s in charge of writing tax laws, Senator Morons? Apparently the Senators think Apple is in violation of some unwritten Cosmic Fair Tax Code that only Senators are privy to.
Here’s what Senator McCain said: “A company that found remarkable success by harnessing American ingenuity and the opportunities afforded by the U.S. Economy should not be shifting its profits overseas to avoid the payment of U.S. tax, purposely depriving the American people of revenue. It is important to understand Apple’s Byzantine tax structure so that we can effectively close the loopholes utilized by many U.S. multinational companies—.”
Deprive the American people of revenue? Don’t you mean the American government, Senator? Apple’s Byzantine tax structure? I didn’t know corporations were in charge of tax structures, Byzantine or otherwise.
Here’s a sample of Senator Levin’s babblings: “Apple sought the Holy Grail of tax avoidance. We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their fair share of taxes understand how offshore tax loopholes raise their tax burden — and ought to be closed.”
The Holy Grail of tax avoidance? Do you mean avoiding taxes by the gimmick of scrupulously obeying tax laws, as Apple has done? Fair Share? I suppose you have to be an elected official to know what a “fair share” is. On top of that, it no doubt helps to be really stupid about who pays taxes.
Apple CEO Tim Cook, until now just a guy following in the impossible-to-fill shoes of Steve Jobs, showed himself to be one helluva class act. Dignified, polite, knowledgeable, and infinitely patient with the Senator morons, he emerged from the hearing the clear victor.
And why not? His testimony, as follows, was delivered firmly and unapologetically: “We pay all the taxes we owe. Every single dollar. We not only comply with the law, but we comply with the spirit of the laws. We don’t depend on tax gimmicks. We don’t move intellectual property offshore and use it to sell our products back to the United States to avoid taxes. We don’t stash money on some Caribbean island. We don’t move our money from our foreign subsidiaries to fund our U.S. business in order to skirt the repatriation tax.”
Four points to consider:
1) Apple, and all other international companies, must find the lowest cost areas to do business or their competitors, who also seek the lowest cost areas, will under price them and put them out of business. Do bankrupt companies pay taxes, Senator Morons?
2) Taxes are a cost (duh!), just like raw materials or electricity. In the venerable DuPont formula, the last factor in the equation is one minus the tax rate, or (1-Tax rate). The higher the tax rate, the lower the return on investment. As returns on investment are lowered, expect the amount invested to be lower. How many jobs are created by lack of investment, Senator Morons?
3) Corporations don’t pay taxes. A dramatic illustration of that fact is all the taxes imposed on cigarettes. Has that put Phillip Morris out of business?
4) Lower foreign taxes attract companies to locate their operations there, just like Silver City’s taxes attracted me to move here. Why is the U.S. corporate tax rate the highest in the world, Senator Morons?
Senators Levin and McCain have a combined 65 years of Washington, D.C. experience, and are responsible for the tax code they complain Apple abuses.. Both these despicable demagogues should never have been allowed to be in office as long as they have been. TERM LIMITS!!