“This Sunday, CBS’s 60 Minutes will air a wide-ranging interview of Apple CEO Tim Cook. A preview of that interview was released this last week,” Todd Ganos writes for Forbes. “In that interview, Charlie Rose asks Mr. Cook about foreign-earned profits held offshore. In essence, the question was whether Mr. Cook believed Apple should pay income tax on those profits held offshore. Mr. Cook stated that Apple was paying ever bit of tax that it owes the United States government under the law. Mr. Cook referred to assertions to the contrary by some members of Congress as ‘political crap.'”
“In mid-2010, one party held the presidency. That same party held a majority in the House of Representatives. But, most importantly, that same party controlled 60 votes in the Senate. They had 58 members and 2 independents aligned with them,” Ganos writes. “Under such circumstances, the party could have defeated any attempt at a filibuster. This means that the party could have done anything it wanted. It could have raised the minimum wage; it didn’t. It could have passed pro-labor legislation; it didn’t. It could have passed global warming legislation; it didn’t. And, to the issue at hand, it could have repealed the exception to the CFC tax rules and forced U.S. companies to report the income from their foreign subsidiaries. It didn’t.
“We will not speculate why the CFC rules were not changed when they party most vocal about the CFC rules could have acted with impunity. We will simply acknowledge that the CFC rules – and the exceptions – are still in place and all of these companies are complying with the law. They are paying every bit of tax that they are required to pay under the law. But, not a penny more,” Ganos writes. “Now, let’s move on to the point on which Mr. Cook is wrong… In the interview with Charlie Rose, Mr. Cook describes the U.S. tax system as being designed for the industrial age as opposed to the digital age. I would assert that it is actually worse than Mr. Cook describes: the U.S. tax system was not even appropriate for the industrial age. Mr. Cook is wrong in that he does not criticize the U.S. tax system even more harshly. Maybe Mr. Cook is just being the polite gentleman he is.”
Read more in the full article here.
MacDailyNews Take: Obviously, the U.S. corporate tax system, among other U.S. tax systems, is FUBAR.
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
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