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Tim Cook Defends Apple's Tax Record Ahead of Senate Committee Appearance [Updated]

Apple CEO Tim Cook, in a break from his predecessor, is giving a number of interviews to Washington press outlets ahead of his appearance in front of the Senate Permanent Subcommittee on Investigation next week.

Subcommittee
Washington newspaper Politico spoke to Cook about Apple's offshore cash pile -- which the company has thus far refused to repatriate to the United States because of the significant tax burden that would result -- and Apple's political activities.

"We don't have a large presence in Washington, as you probably know, but we care deeply about public policy and believe creative policy can be a huge catalyst for a better society and a stronger economy," Cook said in the interview.

He also defended his company's conduct. “I can tell you unequivocally Apple does not funnel its domestic profits overseas. We don't do that. We pay taxes on all the products we sell in the U.S., and we pay every dollar that we owe. And so I'd like to be really clear on that,” Cook said.

Cook has agreed to appear in front of the subcommittee on Tuesday morning personally, instead of sending a more junior executive to testify in front of the committee. His predecessor as CEO, Steve Jobs, agreed to very few interviews and tended to stay out of politics entirely.

Apple recently borrowed $17 billion in a bond offering, in part to return cash to shareholders without bringing some of its $100 billion overseas cash pile to the United States. If it were to repatriate that cash to the U.S., it would need to pay a more than $13 billion tax bill.

Update: In an interview with The Washington Post, Cook says he plans to present specific proposals at the Senate hearing to overhaul the U.S. corporate tax system.

"If you look at it today, to repatriate cash to the U.S., you need to pay 35 percent of that cash. And that is a very high number," Cook said in an interview Thursday. "We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable."

Cook also pointed out that if state and federal taxes are combined, Apple pays roughly $1 million per hour in taxes, possibly making Apple the largest corporate taxpayer in the country.

Note: Due to the political nature of the discussion regarding this topic, the comment thread is located in our Politics, Religion, Social Issues forum. All MacRumors forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

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Top Rated Comments

Kaibelf Avatar
176 months ago
Pay the 13 Billion and bring that money back to the United States. Become an example for other companies.
If they manufacture items abroad, ship them abroad, SELL them abroad, AND pay the local sales taxes in those countries, exactly why in the world does the US have a claim on that money? You're not supposed to be taxed twice on sales anywhere, and the US's tax and revenue issues don't preclude other countries' sovereignty.

What you're asking them to do is give away money that, frankly, the US has no right to have, and you want that to set an example? No.

----------

Let's have Apple factories in the US
Sure! As long as my phone isn't $1100 to make it happen with wages and union pressure. Or, you can have the regular, and the "Made in the USA" edition, and let people choose which one they will pay for. I personally wouldn't spend more than $50 more for a domestically-produced phone, as I already pay thousands of my dollars to an American carrier for the service anyway, and the last thing I need is to struggle financially so that someone who decided not to finish high school can get a second car and a more comfortable home than I have.
Score: 30 Votes (Like | Disagree)
Bonte Avatar
176 months ago
Apple earned it offshore
Apple payed offshore taxes
Apple holds the cash offshore

I don't see the problem, Apple would be taxed double and i would be taxed again via the dividend, there are limits to taxing.
Score: 26 Votes (Like | Disagree)
Small White Car Avatar
176 months ago
I've seen lots of accusations that Apple is doing terrible and illegal things but I've yet to see any proof.

The big big BIG difference between Apple and some of these other companies that send profits over-seas in convoluted cheat-schemes is that Apple is actually selling products in these other countries.

When an Apple store in Italy sells an iPhone to an Italian Apple then pays a tax to Italy for that. If that money stays in Italy, well, ok. There's nothing really wrong with that. Sure it would make me happy, as an American, for Apple to bring that money home and pay more taxes on it a second time, but what reason does Apple have to do that? I can't offer them a reason.

This is a far cry from someone making money in the U.S. and then sending the money to some secret bank account in another country to avoid taxes.

Should it turn out Apple is doing that, sure, grill them for it. But I've yet to see anyone offer any evidence for that whatsoever.
Score: 23 Votes (Like | Disagree)
CristobalHuet Avatar
176 months ago
Pay the 13 Billion and bring that money back to the United States. Become an example for other companies.

Easy for you to say that when it's not your money. $13 billion is not chump change, not even for a company like Apple.
Score: 18 Votes (Like | Disagree)
176 months ago
Pay the 13 Billion and bring that money back to the United States. Become an example for other companies.
It's a World Economy now. Not just the US.

Tim is exactly correct. They pay taxes on everything they SELL IN THE US.

Just like they pay taxes in other countries for whatever they SELL IN THOSE COUNTRIES.
Score: 16 Votes (Like | Disagree)
Peace Avatar
176 months ago
Pay the 13 Billion and bring that money back to the United States. Become an example for other companies.
Score: 14 Votes (Like | Disagree)
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