Apple Inc. (NASDAQ:AAPL) CEO Tim Cook appeared before a Senate subcommittee today where senators and tax law experts fired questions at him about his company’s tax practices. The tech giant has come under scrutiny recently as lawmakers look into numerous corporations which send many of the profits offshore to countries with more friendly corporate tax rates.
The Guardian’s Jim Newell blogged the subcommittee hearing live.
Sen. Levin On Apple
Reuters’ Patrick Temple-West reports that Sen. Carl Levin, who heads up the Senate Permanent Subcommittee on Investigation, accused Apple Inc. (NASDAQ:AAPL) of shifting “billions of dollars in profits offshore.” Levin also said that “under one section of the tax code,” those profits should be subject to taxes in the U.S.
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According to Levin, Apple Inc. (NASDAQ:AAPL) avoided $9 billion in U.S. taxes last year, so he’s now urging Congress to work on closing loopholes in tax laws. He said closing such loopholes “could provide hundreds of billions of dollars to reduce the deficit and avert damaging budget cuts.”
Is Apple Being Vilified?
In addition to Cook, a number of other experts took part in the conversation and gave their testimony about Apple Inc. (NASDAQ:AAPL)’s tax practices. One of them was tax professor Richard Harvey, who noted, “This is going to be a little bit of an Apple-bashing day,” but he said that Apple’s practices are not outside of international tax law.
Se. Paul Rand also asked some questions at the hearing, and he was quite angry over the whole matter. In fact, he levied his anger at his fellow senators, saying that they are bullying Apple Inc. (NASDAQ:AAPL) and that “if anyone should be on trial here, it’s Congress.” He wanted the committee to “apologize to Apple.”
Paul said Congress should just reform tax laws and stop focusing on “evil Apple.”
Cook Delivers His ‘Go Apple’ Goodbye Speech
As Cook prepared to leave the stand and make way for Apple CFO Peter Oppenheimer, he emphasized the company’s excitement at being an American company and to be able to innovate. He reminded the committee that the App Store has resulted in more than 300,000 jobs in the U.S. over the last five years and emphasized that Apple Inc. (NASDAQ:AAPL) complies with “the spirit of the law.”
He also said that tax law in the U.S. hasn’t kept up with “the digital age.”
Duly noted, Mr. Cook.