“Joseph Stiglitz, an economic professor at Columbia University and 2001 recipient of the Nobel Memorial Prize in Economic Sciences, has described Apple’s tax arrangements in Ireland as ‘a fraud’ in a recent interview with Bloomberg TV,” Joe Rossignol reports for MacRumors.
Here we have the largest corporation in capitalization not only in America, but in the world, bigger than GM was at its peak, and claiming that most of its profits originate from about a few hundred people working in Ireland — that’s a fraud. A tax law that encourages American firms to keep jobs abroad is wrong, and I think we can get a consensus in America to get that changed. — Joseph Stiglitz
“Under current U.S. laws, Apple is able to shift billions of dollars in profits to Ireland, where it operates multiple subsidiaries, sheltering those earnings from up to a 35 percent corporate tax rate in the United States,” Rossignol reports. “Ireland has a much lower corporate tax rate of 12.5 percent, but Apple is believed to have a sweetheart deal with Ireland that sees it pay less than 2 percent in exchange for creating jobs in the country.”
MacDailyNews Take: There is no “sweetheart deal with Ireland.”
It’s very important that people understand that there was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland. If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case. We’ve always been very transparent with the Irish government that we wanted to be a good corporate citizen… If countries change the tax laws, we will abide by the new laws and we will pay taxes according to those laws. – Apple CFO Luca Maestri
Read more in the full article here.
MacDailyNews Take: Obviously, U.S. corporate taxes are too high.
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