“Apple Inc. Chief Executive Tim Cook is usually even-keeled when he is on stage or doing interviews. But in a recent 60 Minutes interview with Charlie Rose, Cook was unusually passionate when asked about a divisive topic: corporate taxation,” Therese Poletti writes for MarketWatch. “When asked why Apple, which had $74 billion in revenue outside the U.S. last year, won’t bring that revenue back to the U.S., Cook got worked up, saying the approximate 40% tax rate makes it prohibitive. ‘This is a tax code, Charlie, that was made for the industrial age, not the digital age,’ Cook said. ‘It’s backwards, it’s awful for America, it should have been fixed years ago, it’s past time to get it done.'”

“It’s a topic that typically heats up during presidential elections and one that is of vital importance to Silicon Valley,” Poletti writes. “Many are hoping for another repatriation holiday, such as the one-time event in 2004 that allowed multinational U.S. companies the right to bring cash back to the U.S., taxed at a rate of 5.25%. That was significantly lower than current tax rates. According to KPMG, the United States has the highest corporate tax rate in the world at 35%, with additional state and local taxes adding approximately 7.5% to the total tax bill. If another one-time repatriation holiday is not the answer, total tax reform — as Cook suggests — would be a better solution. But any kind of tax reform is difficult during an election year and is likely only going to happen, if at all, afterwards”

“Democratic front-runner Hillary Clinton, for example, laid out a plan for some corporate tax reform earlier this month, including a way to close some of the loopholes companies use to set up overseas subsidiaries for tax purposes. But she has not advocated for lowering the overall corporate tax rate… Her main competition, Sen. Bernie Sanders, has said he supports a higher corporate tax rate,” Poletti writes. “On the other hand, most of the Republican candidates support lowering the top corporate tax rate, with at least two supporting the end of corporate taxes in exchange for a business transfer tax. Unsurprisingly, nobody goes farther than Republican front-runner Donald Trump, who specifically calls for a cut in the top corporate tax rate to 15% from 35%. He also is advocating for a one-time repatriation holiday for cash held outside the U.S. to be taxed at 10%.”

Read more in the full article here.

MacDailyNews Take: Like U.S. personal income taxes, U.S. corporate taxes are obviously an antiquated mess that exists in order to benefit the tax preparation industry, lawyers, and to give the IRS cover to conduct intrusive fishing expeditions, er… audits.

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

SEE ALSO:
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Apple avoids $59.2 billion U.S. tax bill – October 7, 2015
U.S. companies now have $2.1 trillion overseas to avoid corporate taxes – March 4, 2015
Intel CFO: Obama repatriation tax proposal ‘lipstick on a pig’ – February 4, 2015
U.S. Congress, Obama take Apple CEO Cook’s advice, eye corporate tax changes – February 3, 2015
Obama targets foreign profits with tax proposal, Republicans skeptical – February 2, 2015
Senator Rand Paul finds Democratic partner for tax repatriation holiday – January 30, 2015
Businesses hopeful Republican control of U.S. Congress will break tax-reform gridlock – November 5, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
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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