“Intel chief financial officer Stacy Smith was in New York Wednesday and was kind enough to stop by Barron’s offices for a chat,” Tiernan Ray reports for Barron’s.
“One of the areas where Smith was most passionate was on the topic of President Barack Obama‘s proposal that U.S. companies pay a 14% tax to repatriate their overseas earnings,” Ray reports. “Barron’s magazine executive editor Fleming Meeks asked Smith, ‘What do you make of President Obama’s proposal to allow companies to repatriate overseas cash at 14%. Do you think there’s any seriousness to that?'”
Ray reports, “Said Smith, ‘I’m from Texas, so I’ll use the Texasism: it’s kind of lipstick on a pig.'”
We need fundamental tax reform that helps companies like Intel that are big manufacturers. We are unique in that we do our highest-end manufacturing in the United States, by and large, that’s where our largest factories are. We need something that helps make us competitive on a worldwide stage. And if you look at it, we actually have tax policy that is punitive toward companies like us that create jobs in the U.S., that export outside the U.S., that manufacture in the U.S., and it makes us less competitive with a company like a Samsung or TSMC [Taiwan Semiconductor Manufacturing], which are the people we compete with on a worldwide stage, because they have much more pro-business tax policies. So I think repatriation is one of the things that needs to be dealt with, but it needs to be dealt with in the context of a fundamental changing of our tax policy that helps companies that want to, in my opinion, do the right thing, create jobs in the U.S., and be competitive on a worldwide playing field. – Stacy Smith, Intel CFO
Read more in the full article here.
MacDailyNews Take:
Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth. – Apple CEO Tim Cook, May 21, 2013
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]
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