“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:
Cramer: Apple’s Tim Cook is ‘patriotic’ on taxes – December 21, 2015
Apple CEO Tim Cook is absolutely right – and wrong – on U.S. corporate tax policy – December 20, 2015
Apple CEO calls corporate tax rap ‘total political crap’ – December 18, 2015
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
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
Jeb Bush’s tax reform plan centers on accomplishing these major goals:
• Lower marginal tax rates.
• Simplify the tax code for all Americans to lessen the power of the IRS and increase both prosperity and fairness.
• Reduce loopholes and special tax provisions created by lobbyists that invariably benefit those at the top.
• Replace the current broken tax code – which has seven different tax rates, with a top rate of nearly 40 percent – with a streamlined system with only three rates: 28 percent, 25 percent and 10 percent.
• Reform our business tax code to ensure U.S. businesses, small and large, can be at the forefront for the competitive 21st century global economy.
• Lower our corporate tax rate to 20 percent – below China’s – to bring jobs and manufacturing back to the United States.
• Ensure that Americans who are able and willing to work are incentivized to rejoin the workforce.
Full details: http://jeb2016.com/backgrounder-jeb-bushs-tax-reform-plan/?lang=en
get real. jebito¡ is in the toiletto el grandé.
Thank God.
If only he knew what any of that means.
The 2016 Presidential Tax Reform Proposals of all 2016 U.S. Presidential Candidates compared:
http://taxfoundation.org/comparing-2016-presidential-tax-reform-proposals
The New York Times, Dec. 29, 2015:
Ted Cruz’s Simple, Radical Tax Plan
Many are hoping for another repatriation holiday
What rubbish. Have a PERMANENT cut to at least HALF for taxation on foreign made profits. Better yet, make it 10% maximum. Cook advised even less.
What is this stupid ‘holiday’ for except to temporarily clean up a catastrophic mess that’s returned in full force after the ‘holiday’. Get this idiocy out of the way forever NOW.
Shut up Carl Levin! You’re wrong.
Exactly. These are profits that have already been taxed by the country they were made in. Most industrial nations do not tax already-taxed money at all. They sensibly WANT that money brought back into their economies.
Even a zero-percent tax on bringing home already taxed international profits would be a positive for everyone in the US economy, rich and poor.
Why incentivize US companies to reinvest international profits in other countries instead of here? Madness and political grandstanding.
Want, want, want… fix that mentality problem and maybe the other problems will go away by themselves?
The purpose of the Tax Code is to raise the funds needed for Government to provide the services the Congress has deemed necessary for the Government to provide. It already doesn’t raise enough funds, hence the deficit. Why not start by cutting back on Government-provided service, which the Congress can do?
I propose starting with Congressional salaries, just as a show of good faith. Instead of paying Congress at a rate that puts them in the top 10% of American wage earners, lets pay them at the median rate for all wage earners. And eliminate their health-care subsidy, make them subject to the same economic conditions as average Americans. And eliminate the Congressional Retirement Plan, leaving them stuck with Social Security as their only source of Government entitlements in retirement. Maybe these actions would help focus them on the issues at hand.
After that, how about cutting back on the number of nuclear weapons, maybe back to just enough to only destroy the world ten times.
Then, simplify the Code to eliminate corporate welfare and embedded subsidies.
Taxation is part of civilized society. All the ass clowns in the private sector will always want what is not good for the society at large.
And, the idiot with the elephant avatar quoting Ted Cruz’ tax plan is just another inhabitant of Bob’s Beserko Lounge.
VAT- the regressive tax that hurts everyone except the rich is imbecilic at best. And then old first 2014 supports this? Ask him how it’s worked out for Europe.
The United States had no income tax prior to 1913, the federal government was financed by tariffs on imported goods. This had a two-fold positive effect:
• American jobs were protected.
• Federal government expenditures were contained and limited.
US citizens are such hypocrites. They blast government for excessive taxes that destroy wealth and freedom, yet clamor for federal and state handouts, grants, and “services”.
Read Federic Bastiat.
Eliminate corporate taxes entirely. In return, make political involvement by corporations, especially lobbying, illegal. Make up the lost revenue by making individual taxes much more steeply progressive, with the additional goal of reducing wealth inequality.
I want my wealth to be dramatically unequal to the wealth of losers and moochers. Let’s make political involvement by teacher’s unions, especially lobbying, illegal. They’ve done far more harm to America and its young than corporations.