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“That is total political crap,” Cook fired back. He said he’d “love to bring it home” but doesn’t because “it would cost me 40%... and I don’t think that’s a re

“That is total political crap,” Cook fired back. He said he’d “love to bring it home” but doesn’t because “it would cost me 40%... and I don’t think that’s a reasonable thing to do. This is a tax code, Charlie, that was made for the industrial age, not the digital age. It’s backwards. It’s awful for America. It should have been fixed many years ago. It’s past time to get it done.” I'm a little insulted by the fact that Cook thinks it's up to him to decide whether or not his company should be paying taxes. Obviously they've found a loophole, but his phrasing suggests he's doing it for the greater good. Maybe if Apple and similar huge companies actually paid those 40% (I doubt it's that high a percentage) to government, public school could get more funding, etc. and the US wouldn't need as much philanthropy.

aikah 11y ago
> I'm a little insulted by the fact that Cook thinks it's up to him to decide whether or not his company should be paying taxes This is not that uncommon among affluent people to think that they shouldn't pay taxes,in fact they have the money to set up schemes in order to not pay any.
- jjtheblunt 11y ago
  That's naive: they did pay taxes already, on earnings in the countries of the earnings, and are saying that, for example, the Brazilian company Apple Brazil, paid up on Brazilian income tax for work done by Brazilians in Brazil, should not then pay 40% more to the United States for work done in Brazil.
  - genmon 11y ago
    It's not about paying 40% more -- tax already paid to foreign governments is deducted. So the total tax is 40%, with any tax not paid to foreign governments going to the US government when the profit is repatriated.
atirip 11y ago
Talk to your government, vote, make things happen. Thats up to you. If the government established a law, Apple and others would pay or course. On the other hand, if compaies paid more then required, management would be sued by shareholders to oblivion. Want to change that too? Vote, make things happen.
- collyw 11y ago
  Such faith in our poor implementation of democracy.
jevgeni 11y ago
Of course it's up to him. If I were an Apple stockholder, I'd be livid, if they would have decided to pay up 40% on those 74 billion. In fact, everyone decides to a certain extent the amount of tax they pay via choice of residence and career to a lesser degree. And of course 40% is an insanely high amount. USA has one of the highest corporate tax rates in the world (https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates).
- collyw 11y ago
  As a taxpayer you should be livid for the opposite reason.
  - thrill 11y ago
    I'm livid that the US politicians have created a tax system so complex that only the wealthy can capitalize on most available advantages.
- rskar 11y ago
  Per wiki, 35% + up to 12% of State/Local income tax; less any foreign tax already paid (as tax credit); less any other deductions and credits. Per http://www.politifact.com/punditfact/statements/2014/sep/09/eric-bolling/does-us-have-highest-corporate-tax-rate-free-world/ http://www.politifact.com/punditfact/statements/2014/sep/09/..., the reality is more nuanced. The World Bank and International Finance Commission puts the United States’ effective rate for 2014 at 27.9 percent. It should be noted that value-added-taxes (VAT) seem to go from about 10 to 20 percent. The US doesn't do VAT; it's largely state and local sales taxes where applicable, generally less than 10 percent.
jjtheblunt 11y ago
Insulted? Apple paid taxes on foreign earnings by foreign branches in the countries where earnings occurred. What nonsense is being dismissed is the idea of then paying duplicate income taxes, on the same earnings, to a second foreign government: in this case the United States. It's obscene to think it makes sense. The fallacy in perception is a political slight of hand to fury fund a way too hungry big government many would say.
- snarfy 11y ago
  > in the countries where earnings occurred. Do you really think Apple makes the majority of their income in Ireland? On paper they do, if you follow the twisted winding path of tax codes from the United States through Denmark to Ireland.
- Marazan 11y ago
  No they don't - in Europe they managed to cut a deal with Ireland such that only their Irish generated revenue was taxed in Irleand but all other European revenue was booked against their Ireland business so was completely untaxed Apple have not just followed the law as written - they have carved out specific tax exemptions for themselves.
  - sokoloff 11y ago
    > Apple have not just followed the law as written I think they have followed the law as written. Some people just don't like how it was written and some of the effects caused by how it was written.
    - isolate 11y ago
      You missed the word "just".
      - sokoloff 11y ago
        It's unclear what "just following the law" is as distinct from "following the law". Can you help me understand the difference? What law(s) have they violated? Have they "just violated them" or just "violated them"?
Shivetya 11y ago
The US has one of the worst if not worst tax codes in the world and especially for business. Plus the simple fact remains, businesses only collect taxes, if they have not sent them in then all they have done is not sent the money every supplier, customer, employee, and shareholder, has paid as a tax. Indirect taxes are the big slight of hand that all governments use to keep their people from knowing just how large of a tax burden they truly have. The US went further with withholding taxes.
- kspaans 11y ago
  Yeah, morality aside, it's very interesting to think about all of the taxes that Apple has already paid in various countries: sales taxes (and/or VAT), payroll taxes, income taxes for their employees, property taxes. (And that excludes things like health care plans, pension plans, etc.)
- deleted 11y ago
  [deleted]
mhd 11y ago
What specifically is he talking about here? If we're talking about manufacturing, a tax code for the "industrial age" seems about right. If it's about digital content distribution (itunes etc.), okay, but what works for steam engines but not for laptops?
sokoloff 11y ago
To me, it's no different than me buying raw ground beef (not taxable to me locally) vs a prepared hamburger (taxable to me at 7% locally). I'm free to choose between those, but when I buy raw ground beef, I'm not evading taxes and I assume you don't feel insulted by the fact that I think it's up to me whether or not I pay beef tax. It's a choice I make in the face of a multi-dimensional optimization problem, same as Apple is doing on a scale 10^9 larger.
- snarfy 11y ago
  This analogy doesn't really fit the argument. Apple is selling things and profiting but you are talking about taxes on buying things.
  - sokoloff 11y ago
    I'm also using a very simple example to talk about making specific choices on which legal action to take in the face of varying tax incentives, which is analogous (though not identical) to the choices multinationals face when deciding whether to do X, Y, or Z. (where X might be "do foo in one jurisdiction" and Y might be "do foo in another jurisdiction" and Z might be "do bar instead")
- dogma1138 11y ago
  Apple sells it self its own product at rates that would guarantee that they do not pay taxes where they do not want too.
dwc 11y ago
> Obviously they've found a loophole Yes, Apple and any number of other companies have all cleverly discovered the sneaky loophole that was created unintentionally and has been left open purely by oversight for lo, these many years. If the loophole wasn't created at the behest of lobbyists, it's been kept open and/or widened by lobbyists. Whether or not Apple itself had anything else to do with that, it's part of the playing field now and it would be corporate malpractice not to use it. The way for a company to help fix this problem is not to become less competitive on principle, but to use their lobbying power to adjust the whole playing field.

aikah 11y ago

> I'm a little insulted by the fact that Cook thinks it's up to him to decide whether or not his company should be paying taxes This is not that uncommon among affluent people to think that they shouldn't pay taxes,in fact they have the money to set up schemes in order to not pay any.

jjtheblunt 11y ago
That's naive: they did pay taxes already, on earnings in the countries of the earnings, and are saying that, for example, the Brazilian company Apple Brazil, paid up on Brazilian income tax for work done by Brazilians in Brazil, should not then pay 40% more to the United States for work done in Brazil.
- genmon 11y ago
  It's not about paying 40% more -- tax already paid to foreign governments is deducted. So the total tax is 40%, with any tax not paid to foreign governments going to the US government when the profit is repatriated.

atirip 11y ago

Talk to your government, vote, make things happen. Thats up to you. If the government established a law, Apple and others would pay or course. On the other hand, if compaies paid more then required, management would be sued by shareholders to oblivion. Want to change that too? Vote, make things happen.

collyw 11y ago
Such faith in our poor implementation of democracy.

jevgeni 11y ago

Of course it's up to him. If I were an Apple stockholder, I'd be livid, if they would have decided to pay up 40% on those 74 billion. In fact, everyone decides to a certain extent the amount of tax they pay via choice of residence and career to a lesser degree. And of course 40% is an insanely high amount. USA has one of the highest corporate tax rates in the world (https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates).

collyw 11y ago
As a taxpayer you should be livid for the opposite reason.
- thrill 11y ago
  I'm livid that the US politicians have created a tax system so complex that only the wealthy can capitalize on most available advantages.
rskar 11y ago
Per wiki, 35% + up to 12% of State/Local income tax; less any foreign tax already paid (as tax credit); less any other deductions and credits. Per http://www.politifact.com/punditfact/statements/2014/sep/09/eric-bolling/does-us-have-highest-corporate-tax-rate-free-world/ http://www.politifact.com/punditfact/statements/2014/sep/09/..., the reality is more nuanced. The World Bank and International Finance Commission puts the United States’ effective rate for 2014 at 27.9 percent. It should be noted that value-added-taxes (VAT) seem to go from about 10 to 20 percent. The US doesn't do VAT; it's largely state and local sales taxes where applicable, generally less than 10 percent.

jjtheblunt 11y ago

Insulted? Apple paid taxes on foreign earnings by foreign branches in the countries where earnings occurred. What nonsense is being dismissed is the idea of then paying duplicate income taxes, on the same earnings, to a second foreign government: in this case the United States. It's obscene to think it makes sense. The fallacy in perception is a political slight of hand to fury fund a way too hungry big government many would say.

snarfy 11y ago
> in the countries where earnings occurred. Do you really think Apple makes the majority of their income in Ireland? On paper they do, if you follow the twisted winding path of tax codes from the United States through Denmark to Ireland.
Marazan 11y ago
No they don't - in Europe they managed to cut a deal with Ireland such that only their Irish generated revenue was taxed in Irleand but all other European revenue was booked against their Ireland business so was completely untaxed Apple have not just followed the law as written - they have carved out specific tax exemptions for themselves.
- sokoloff 11y ago
  > Apple have not just followed the law as written I think they have followed the law as written. Some people just don't like how it was written and some of the effects caused by how it was written.
  - isolate 11y ago
    You missed the word "just".
    - sokoloff 11y ago
      It's unclear what "just following the law" is as distinct from "following the law". Can you help me understand the difference? What law(s) have they violated? Have they "just violated them" or just "violated them"?

Shivetya 11y ago

The US has one of the worst if not worst tax codes in the world and especially for business. Plus the simple fact remains, businesses only collect taxes, if they have not sent them in then all they have done is not sent the money every supplier, customer, employee, and shareholder, has paid as a tax. Indirect taxes are the big slight of hand that all governments use to keep their people from knowing just how large of a tax burden they truly have. The US went further with withholding taxes.

kspaans 11y ago
Yeah, morality aside, it's very interesting to think about all of the taxes that Apple has already paid in various countries: sales taxes (and/or VAT), payroll taxes, income taxes for their employees, property taxes. (And that excludes things like health care plans, pension plans, etc.)
deleted 11y ago
[deleted]

mhd 11y ago

What specifically is he talking about here? If we're talking about manufacturing, a tax code for the "industrial age" seems about right. If it's about digital content distribution (itunes etc.), okay, but what works for steam engines but not for laptops?

sokoloff 11y ago

To me, it's no different than me buying raw ground beef (not taxable to me locally) vs a prepared hamburger (taxable to me at 7% locally). I'm free to choose between those, but when I buy raw ground beef, I'm not evading taxes and I assume you don't feel insulted by the fact that I think it's up to me whether or not I pay beef tax. It's a choice I make in the face of a multi-dimensional optimization problem, same as Apple is doing on a scale 10^9 larger.

snarfy 11y ago
This analogy doesn't really fit the argument. Apple is selling things and profiting but you are talking about taxes on buying things.
- sokoloff 11y ago
  I'm also using a very simple example to talk about making specific choices on which legal action to take in the face of varying tax incentives, which is analogous (though not identical) to the choices multinationals face when deciding whether to do X, Y, or Z. (where X might be "do foo in one jurisdiction" and Y might be "do foo in another jurisdiction" and Z might be "do bar instead")
dogma1138 11y ago
Apple sells it self its own product at rates that would guarantee that they do not pay taxes where they do not want too.

dwc 11y ago

> Obviously they've found a loophole Yes, Apple and any number of other companies have all cleverly discovered the sneaky loophole that was created unintentionally and has been left open purely by oversight for lo, these many years. If the loophole wasn't created at the behest of lobbyists, it's been kept open and/or widened by lobbyists. Whether or not Apple itself had anything else to do with that, it's part of the playing field now and it would be corporate malpractice not to use it. The way for a company to help fix this problem is not to become less competitive on principle, but to use their lobbying power to adjust the whole playing field.