Apple Faces Congress At Tax Hearing

[webfact]

Apple faces Congress at tax hearing

WASHINGTON: -- The head of the US-based multibillion dollar computer firm Apple told a Senate panel Tuesday his company has paid “every single dollar” it owes in taxes, despite a new congressional report that says Apple shifted billions of dollars in profits away from the United States and into subsidiaries in Ireland where it gets a special tax rate of less than 2%.

“We pay all the taxes we owe, every single dollar,” said Apple CEO Tim Cook. “We don’t rely on tax gimmicks.”
The committee’s report, released Monday, finds Apple has used offshore entities to avoid paying billions of dollars in US income taxes.

Sen. Carl Levin, chairman of the subcommittee, in his opening remarks said that Apple was able to get away with avoiding paying taxes to a tune of $ 9 billion in 2012.

Tuesday’s hearing marks the second time the subcommittee has looked into the use of corporate loopholes to avoid US taxes. In September the panel looked into tax structures for Microsoft and Hewlett-Packard.

Full story: http://english.ruvr.ru/news/2013_05_22/Apple-faces-Congress-at-tax-hearing-945/

-- THE VOICE OF RUSSIA 2013-05-22

[BookMan]

Here is CEO Tim Cook at the hearing. A very rehearsed speech

[BookMan]

Apple is not the only company avoiding tax in major Western countries. It is happneing everywhere and it looks like many of the big corporations practice it.

The big corporations set up some affiliates in tax friendly regions and put the profits into these. they do this solely to avoid paying the taxes they should be paying within the country they have made the monies.

The corporations use loopholes in tax laws and governments have strugged to control the problem. With decreasing tax bases governments across the globe need to take some action.

[canopus1969]

Well done Master Cook - tell the stupid Senators to do their their jobs and enact laws to stop it if they don't like it.

[Wavefloater]

Wow -- avoided 9 BILLION in taxes -- just taxes and just in the USA and just in one year. That certainly must mean that Apple makes an obscene amount of money in profits.

I think this gives us a pretty good idea of just how grossly over-priced Apple products really are.

Edited May 22, 2013 by Wavefloater

[DRONGOH]

Wow -- avoided 9 BILLION in taxes -- just taxes and just in the USA and just in one year. That certainly must mean that Apple makes an obscene amount of money in profits.

I think this gives us a pretty good idea of just how grossly over-priced Apple products really are.

What more do you know about it,wise fella?

Not surprised, Carl Levin is a former taxi driver (Phuket?), so wanting more money is the logical thing for him to do.

[Zumteufel]

Apple is already paying 2.5% of all corporate taxes in the US - that's $1 for every $40 corporate tax dollars. It's slightly dangerous to take numbers out of context.

http://www.imore.com/apple-already-pays-1-out-every-40-tax-dollars-us-collects-how-much-more-does-senate-want

As for the "overpricing" - again it's about context. The Apple ecosystem is about software just as it's about hardware. Apple develop their own operating systems and software for the devices; none of other hardware companies does this (except Microsoft as far as I know). And don't get me started about build quality and attention to detail. Some of us will gladly pay extra for just that, especially if it's a device that puts food on the table (as in my case).

[Joe Mamma]

Well it looks like the USA is running out of ways to squeeze the middle class workers enough. The huge crop of illegal born babies and the subsidy of welfare for the non contributors is snowballing with the stupid political spending and waste, now the big and elite are under the guns, BRAVO uncle Sam.

[lomatopo]

61% of Apple's revenue comes from outside the U.S.

For FY2012 I think their effective tax rate was 25% +/-; 14 billion on income of 56 b on sales of 156 b.

Monies held in foreign subsidiaries are subject to taxation when repatriated. It is better for Apple borrow money via the bond market vs. repatriating profits.

In FY 2102 General Electric paid Zero in tax, and actually received a 2 b credit, on sales of 147 b and income of 22 b.

Expecting corporations to do anything but maximize profitability may be unreasonable.

[Wavefloater]

Wow -- avoided 9 BILLION in taxes -- just taxes and just in the USA and just in one year. That certainly must mean that Apple makes an obscene amount of money in profits.

I think this gives us a pretty good idea of just how grossly over-priced Apple products really are.

What more do you know about it,wise fella?

Not surprised, Carl Levin is a former taxi driver (Phuket?), so wanting more money is the logical thing for him to do.

LOL -- I know squat about it. I was just echoing my thoughts. It seems that if there's that much tax being avoided, there must some huge profits.

I'm surprised people are defending Apple with such vigor. These Apple guys must be amazingly good marketers. I have nothing against Apple. There products just don't appeal to me, regardless of all the industry awards for design, etc. they've received.

As for the taxi driver in Phuket reference, I don't have a clue how it's associated to my post.

[negreanu]

At the beginning of the hearing, Senators are allowed to make whatever opening statements they wish. Senator Rand Paul (R-KY) gave a spirited defense of Apple, saying he was "offended" by the hearing.

"Tell me a politician who is up here and doesn't try to minimize his taxes… Tell me what Apple has done is illegal. I am offended by a government… that convenes a hearing to bully one of America's greatest success stories… If anyone should be on trial here, it should be Congress. I frankly think the committee should apologize to Apple."

Instead of Apple executives, we should have brought in a giant mirror. This problem is solely and completely caused by our tax code. This committee should look in the mirror. "I find it abominable."

[atyclb]

Rand Pauls father is ex politician Ron Paul. He is the guy that wrote a book called end th fed . I wonder how many hundreds of billions in unpaid taxes on profits could recovered if they audited the private banking cartel named the federa reserve?

The personal income tax just pays interest on debt to the private bankers (europe and usa) that own the fe ral reserve.