Tim Cook got grilled by congress for legally using the tax code they created to avoid paying taxes. Below is his full testimony (videos and computer generated transcript) before the ‘honorable’ Senators who tried to make a good show for their constituents. The statements of both CEO Tim Cook and CFO Peter Oppenheimer can be found at the end embedded in scribd.
Current Corporate Tax Code Hurting Economy?
Senator Rand Paul (R-KY) said he thinks the committee should apologize to Apple as the tech giant’s CEO Tim Cook was testifying on tax code, reports CNBC’s Eamon Javers. David Selig, Selig & Associates Federal Tax Practitioner, discusses
we believe anything now. the big story this hour is apple’s tim cook is on the hill being grilled. in case you’re wondering, apple is the largest corporate taxpayer in the country. eamon, you’ve been watching and listening, i imagine this will be a litmus test for some of the other internationals. reporter: that’s right. in fact this particular subcommittee has been going company by company doing case studies. they’re looking at apple releasing pretty revealing report last night, which revealed in fact that apple had created three subsidiary corporations that were not tax residents of any country anywhere in the world, and we expected that tim cook was going to face some grilling on that issue. what we didn’t expect w this moment that we had with senator rand paul that came out even before tim cook began to testify. take a listen. frankly i’m offended by the tone and tenor of this hearing. i’m offended by a $4 trillion government bullying, berating and badgesering one of the america’s greatest success stories. if anyone should be on trial here, it could be congress. i frankly think the committee should apologize to apple. i this that congress should be on trial here for creating a bizarre and byzantine tax code. you’re free to apologize if you wish. you can apologize to anyone you want. this subcommittee is not going to apologize to apple. we did not drag them in front of the this subcommittee. and the subcommittee didn’t in fact apologize to apple. what they did do was question apple fairly intensely at times about why it set up these corporations, whether or not it was avoiding u.s. taxes, but the subcommittee also asked apple’s opinion on how to refor the u.s. tax code overall treating them like subject matter experts. a lot of committee members praising the products. leave at one point pulled out an iphone and said how great it was. it gave apple folks to have some breathing space in the hearing, and tim cook, of course came out to 2k6d his company. i’m often asked if apple still considers itself an american company. my answer has always been an emic yes. we are proud to be an american company, and equally proud of our contributions to the u.s. economy. reporter: so obviously there tim cook saying he’s proud of what the company has done, sort of a mixed day for apple, not necessarily all the body plows landed on the company that a lot of people expected. eamon javers, thank you very much. let’s not forget microsoft and i think hp have also been dragged in front of the congress for the very same reasons. david selig is a federal tax practitioners and advocate. is this a case, david where it’s like senator levin has been in the senate since 1979. he’s had plenty of time to change the tax code. is this a situation where congress basic lip served up the ingredient and now ticked off that apple made the meal? very well said. i think a lot of the individuals who are response gourdian knot and get their rapacious hands on apple’s money, they would probably slap them with a retained earnings penalty, which is the most in — maybe we should be blaming prohibitive tax code, and maybe we need to change it. even tim cook said i would be happy to pay more u.s. tax if indeed you reformed the prohibitive tax code? i think we have to be very careful. even though there are some distinguishes in the code, on the whole it works. the problem with these fast solutions — ivlts wait, it’s not worki if we’re not seeing the moving — i understand that part, but what i’m saying a fast solution to a complex problem usually creates some unpleasant unintended consequences. i’m a big believer in granting whether you call it a federal tax holiday or such so these companies can bring the money back in, and it doesn’t matter how it’s distributed. it could go to different, it could go to bonuses, because that money is going to flow into our federal and state tax laws. what’s the line — you’re a grocery boy sent by a messenger to collect a bill, something like that, right? the government needs money, right? so they’re going after what they seeing is a problem. if you bring up the charts, i think you’ll see would you some people are ticked off. right? corporate taxes used to make up 20%, 25% of the money brought in. it’s now about 9%. the burden on the individual has gone up largely. so does congress at least have a point, especially because it’s broke? no, i have to tell you, without being disrespectful to you, i disagree with the arguments. what’s to stop you? my co-host does it every day. the government has been printing an awful lot of money. it seems they’re looking at they various coveringses as a convenient dog to kick. it creates the impression that these companies are getting awa with something and we’re carrying their water. we have to leave it there, but certainly it’s food for thought. and very polite. very polite as well. yeah, see how nice he was. you could be nicer to me. and we’re talking about tax
Apple Shares Rebound
CNBC’s Seema Mody reports on how Apple shares are reacting to Tim Cook’s testimony on Capitol Hill.
Apple CEO Testifies At Hill Hearing Today
Apple CEO Tim Cook is testifying on Capitol Hill today as Senate investigators accuse the tech giant of using a complicated system to shield billions of dollars in overseas profits. CNBC’s Eamon Javers has the details.