Former Senator Sununu: Congress wrote the tax laws, so why blame Apple for obeying them?

“At the State of the Union address just four months ago, President Obama sang the praises of Apple, a company that is consummately American — from its logo to its fashion-driven product line. Chief Executive Officer Tim Cook sat proudly in Michelle Obama’s box as the president announced that for the first time in years, Mac computers would be built in America,” John E. Sununu, a former Republican senator from New Hampshire, writes for The Boston Globe.

“Last week Cook found himself in a box of a very different sort. With candor and patience that put his inquisitors off stride, he endured hours of grilling before the Senate Investigations Subcommittee,” Sununu writes. “Carl Levin, the panel’s chairman, described Apple’s behavior as ‘gimmickry’ and accused them of pursuing ‘the holy grail of tax avoidance.'”

“At issue was the company’s corporate structure and the effective tax rate that resulted from it. No one argued that Apple had done anything illegal or broken any rules. Levin simply felt that the company should pay more. Ironically, he was the only senator in the room who held office when Apple established its existing corporate structure back in 1980,” Sununu writes. “And as one of the three lonely votes against the 1986 tax bill that set the foundation of today’s system, he surely understands as well as anyone that many companies seek to limit their tax exposure while carefully complying with the laws as written.”

Sununu writes, “Making the case for his company’s decisions, Cook came off far better than the average witness on Capitol Hill. Perhaps it’s easier to be blunt when you employ 60,000 workers in the United States, but lines like ‘we pay all the taxes we owe — every single dollar’ set the tone from the start… By refusing to feel guilty about the results produced by a 30-year-old corporate structure, Cook placed the responsibility for the taxes Apple pays where it belongs: on the US Congress.

Read more in the full article here.

Related articles:
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013
Apple CEO Tim Cook charms Capitol Hill – May 22, 2013
Rush Limbaugh: ‘High-tech lynching: Senate attempts to crucify Apple’ – May 21, 2013
Nobody on U.S. Senate committee laid a glove on Apple CEO Tim Cook – May 21, 2013
Senator Rand Paul: Senate committee ‘should apologize to Apple for bullying one of America’s greatest success stories’ (with video) – May 21, 2013
Ireland: We have no special tax rate deal with Apple – May 21, 2013
Apple prepares for Washington onslaught: CEO Tim Cook isn’t taking any chances with senators looking to grandstand – May 21, 2013
Watch Apple CEO Tim Cook’s live testimony before U.S. Senate, starting at 9:30am EDT – May 21, 2013
U.S. Senate investigation found no evidence that Apple did anything illegal in avoiding taxes – May 20, 2013

39 Comments

  1. To be fair, not forcing companies to immediately pay income tax from profits that were earned abroad it not “lax”, it makes sense that companies should the right to decide when they want to import the money and, before that, to manage and investment for the sake of increasing stockholders equity.

  2. Looks like Apple didn’t break the law! Congress needs to shut up about it. They wrote the law books, Apple was only following them. I bet members of Congress are either Phandroids or Windoze fanboys.

  3. And the very fact that there is some doubt, confusion or question that Apple paid their legally due taxes just shows how convoluted and screwed up our tax system is. Scrap it. Adopt FairTax.org and get the IRS out of decision making role and into a simple collection entity. And get the IRS out of our Health Care system. They’ve broken our trust and once trust is lost it can never been re-established.

    1. You’re wrong. There is no doubt, confusion or question that Apple paid its legally due taxes. Apple did. If the IRS disagrees, then it should audit Apple and see for itself. But some stupid congressional hearing is nothing more than a dog and pony show, and I for one am glad the Senators participating in this farce now have significant egg on their faces.

  4. The best taxation system in today’s world economy is based on consumption (sales tax), not production (income based taxes).

    In a consumption tax system you keep everything you earn. PERIOD. The only time you pay tax occurs when you buy something.

    Without embedded production taxes, US produced goods will cost virtually the same (in the US) after applying a national sales tax.

    But the retail price of US produced goods in the rest of the world will go down, while foreign produced goods will cost more. Just as consumption taxation currently benefits the economies of our current trading partners.

    Demand for US produced goods will go up (a good thing for US workers), which will not require governmental intervention (budget busting stimulus bills). More people working means more domestic production/consumption and a dramatic decrease in US balance of trade deficit.

    Only a socialist wanting to punish producers object to this.

    1. According to G W Bush’s Tax Reform Commission (not exactly a hotbed of progressive/liberal thinking) a national retail sales tax would have to be 23% to replace revenue from income, excise, payroll, and other taxes. That’s 23% plus whatever current state sales tax is assessed, since the mean rate is 6.5%, that’s a 30% tax on every retail purchase. They also found a VAT (value-added tax) would need to be 20% at each stage. A Flat Tax would need to be 20% for everyone.

      A family of 4 making $24k per year (Federal poverty level) would suddenly have at least a fifth of their income disappear. While those with significant capital gains for income would have their taxes shrink even more precipitously. Yea for the rich!

      Only a plutocrat would want to punish the disadvantaged like this.

        1. That would help. but the pile of “simple exceptions” is how we got to where we are today. Except the “simple” part disappeared years ago.

          By the way, the “family of four” problem would be much better helped if low and midrange wages kept up with growth — they’ve been growing below the rate of inflation for the past 30 years.

          I definitely agree that we need major tax reform, but putting in place a severely regressive system in the name of simplicity is not the answer. *Every* consumptive tax method favours the wealthy at the expense of the poor and middle class.

      1. A family of 4 already has a significant portion of its income taken in the form of Social Security, Medicare, FICA, and other payroll taxes (13.2% minimum, already 1/6 of their income). That would be replaced by a flat tax, or that would be removed and only a sales tax imposed.

        1. You’re right in that those taxes would be replaced, but according to the Bush Commission, it would take an additional fifth of their income with any of the other methods. They really can’t afford that.

          1. Not sure if I’d trust a “Bush Commision”. The 15% payroll taxes that are taken from your check are matched by your employer. ALL of those taxes would go away under the FairTax. Not sure about you but a 20% sales tax is better than 30% of my income.

            The income tax just allows the govt to decide how much of the fruits of YOUR labor that they are allowed to TAKE. I’d rather decide how much tax I’ll pay through a sales tax.

  5. The socialists running these United States of America will not rest until they get their grubby little hands on every dime an honest citizen earns…every single dime. Because that is what socialists do. They need every dime to run their racketeering schemes of draining the public coffers to fund their entitlement programs that benefit their voter base.

    Socialists have no concept of money, except when it concerns yours; then they will want to tax it until you’re left with nothing but having to eat grass to survive. But the socialist doesn’t care. All a socialist cares about is funding his entitlement program and dishing out billions to his friends and cronies.

    1. Merriam Webster Dictionary:

      Socialism

      1
      : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

      2
      a : a system of society or group living in which there is no private property

      b : a system or condition of society in which the means of production are owned and controlled by the state

      Not that facts matters to this crowd. This the old battle cry of the robber barons and their minions of the past as they sling fear to scare the uneducated and uninformed into doing their bidding and consequently losing their own rights in the process.

      My how history repeats itself.

        1. How about you quote Reagan exactly as he spoke it in 1988, instead of how you WANT it to sound.

          He said, verbatim “Facts are stupid things – stubborn things, I should say.”

          In other words, reading from his handwritten speech—and yes Reagan wrote his own speeches based on drafts others had prepared—he mis-read and immediately corrected himself. . . speaking before a crowd of 40,000 people. This is not in the same league as the numerous faux pas uttered by our current President such as “fifty-seven states” and “Marine Corpse,” or the too numerous to mention time “foot-in-mouth” Biden has swallowed his own thigh. . . all of which have gone uncorrected.

    2. Lame. Most of the problems that we are facing and what this article is pertaining to is all about Congress and their inability to manage the country. Congress is responsible for creating so many of the loop holes in the tax code so that corporations and the rich can be exempt. There are many ridiculous exemptions designed for the wealthy.

      Besides, isn’t the private sector the ones that have been caught stealing the life savings of people? Making it impossible for people to get health benefits? Aren’t they trying to get rid of social security and all social programs including education? Are they interested in fixing America’s infrastructure that lies crumbling? Other than money, what are they interested in?

      You say, “socialist” as if it’s a bad thing but the best times in America was when government had more control of the situation and lobbyist didn’t own Congress. More control because people had a better say and worked better as a society. Today, it is a dog eat dog society and people are fighting against each other.

      You forget that this government is “We the People” according the U.S. Constitution. Sounds pretty socialist to me.

      However, today it is becoming a government “By the Corporations”. I think that is far worse than any form of socialism.

      You may have your personal political point of view and may quote dead presidents or misinterpret statements but even Apple supports governments because it behaves like one. Google and Samsung don’t. They behave like the typical private sector scum where it is all about them and about them ignoring the laws and ignoring their customers, the people for the sake of their profit. Companies like these are the ones lobbying Congress and manipulating government.

      Tim Cook made it clear, fix the tax codes for all.

    1. Senator Paul’s speech was for congress; Sununu’s article is for readers, the public. Some people may not have seen what all went on in that Senate hearing. Maybe they only saw a couple of sound-bites. The more exposure for this viewpoint, the better. An informed electorate is a good thing – especially for accountability at election time.

      Further, guest writers don’t get to choose when their opinion pieces are published in the newspapers. Better late then never.

      1. Paul’s speech was for the cameras. He’s a lying media whore who isn’t restrained by truth, facts, logic or consistency. He was pandering to the yahoos in Kentucky who put him in the Senate.

        1. A lying media whore who isn’t restrained by truth, facts, logic or consistency? Sounds just as much like the Democrats as the republicans. Congratulations on (apparently unknowingly) defining most of those in Congress.

          I can only assume from your vitriol that you’re from the same moronic school of thought as Carl Levin and John McCain and that you think Apple is horrible because they (legally) avoid taxes using the very laws that congress itself constructed.

          1. I’m from the school of thought that thinks the dipshit from Texas that thought we needed to apologize to BP for having our coastlines get in the way of their oil spill wasn’t too honest either.

            In the case of Rand Paul, it’s not vitriol, just the facts.

  6. People do not understand the percentage of the total government taxes received that is paid by Apple, Apple suppliers, mobile cell phone services (AT&T, Verizon, Sprint, …), and by others that are a part of the Apple ecosystem. I have heard that it is about 2% of the total tax received by the government. I would not be surprised if it were much higher.

  7. correction: Congress approved the tax law. It doesn’t really author the law. Congressional staffers cut & paste it from the tipsheets issued to them by their most profitable donors/lobbyists. Most of whom are former congressmen or staffers on the never-ending turnstile of corruption.

    Equal, fair, transparent public financing for all federal campaigns NOW! It will cost taxpayers a lot less. After all, refusal to allow incorruptable election financing has already cost our nation citizen representation in WA-DC. How much more are citizens going to allow special-interest profiteering multination corporations to take? Citizens need to demand that their representatives actually do their hired job, to write laws, instead of being in fund raising mode 95% of the time (the other 5% to be devoted to immature partisan hackery).

Add Your Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.