Tim Cook: Full Testimony Before Congress [VIDEO]

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ann when we speak with her. thank you so much for your time. ceo tim cook will give his testimony soon. ea did see tim cook walking in a few moments ago. heedness answer any questions but gave a big smile and wave. he is expected to be part of the second panel and expected to face very tough questions here about the way that apple has structured itself around the globe, including what this investigative sub committee says is setting up three separate corporate entities that were not tax residents in any country of the world. not taxed residents of the united states or ireland, where they were legally registered but apple will be in a position where they have do defend themselves from a very hostile senate. we have some tape here of cook walking in. let’s take a look at that first, and then we’ll show you the others. take a look. was what apple did appropriate here? was apple appropriate here? so you can see a lot of camera crews. let’s see if we can play the other tame we have with senator rand paul in a dispute if what apple did was wrong. frankly i’m offended by the tone and tenor of the hearing. i’m offended by a $4 trillion government bullying one of america’s greatest success stories. if anyone should be on trial here. it should be congress. i think the committee should apologize to apple. senator, paul, you can apologize if you wish. this sub committee is not going to apologize to apple. we did not drag them in front of this sub committee. carl levin in no mood to have anybody apologize. now we are going to hear from cook about why apple structured itself this way around the world, whether that gave the company tax vangss and whether he says it’s inappropriate in any way. and apple said they don’t use gimmicks. we’ll see how he handles it in live testimony in just a couple of minutes. he’s up against challenging optdices, as you just showed us, thank you so much. we’ll find out what best buy ceo

‘Berating’ CEOs Doesn’t Solve Tax Problem: Fiorina

Tim Cook testifies before a Senate panel proposing tax changes that would overhaul the corporate tax code, reports CNBC’s Eamon Javers & Jon Fortt. And, Carly Fiorina, former HP chairman & CEO; and William George, Harvard Business School professor, discuss what this means for Apple and other corporations.

Transcript:

apple stans accused of shielding taxes. its ceo and cfo are about to be grilled on capitol hill. we’re watching the first part of the session and they’re on the second panel. thering from a couple of finance professors right now giving them a sense of what the tax law is and what these professors think it should be given the findings here of the senate subcommittee. in essence, the subcommittee here doing months of research found that apple created three corporate entities that were sort of stateless. they didn’t exist in the united states for tax purposes. legally registered in ireland, but not for tax purposes. they didn’t exist anywhere in the country. the committee says that’s a big problem and it was done to avoid taxes. it doesn’t use tax gimmicks and the setup of one of these sub entities didn’t reduce their u.s. tax burden at all. we’ll get to the bottom of that. everyone here waiting, of course, for tim cook, the ceo of apple to take the chair there in the room and begin his testimony. we have not spotted him publicly yet and they’re about to wrap up for the second panel and this is the second speaker now so it should be not too long now before tim cook takes the chair and faces tough questions from the senators, simon. apple is not the first to be dragged into the subcommittee. a couple of months ago it was high pressure and microsoft. you want to know, does it affect the stock. gene munster, well-known analyst, said it doesn’t affect apple stock for now unless they start changing the rules. that’s right. do you think they will change the rules on taxation? senator carl levin who is the guy who chairs this committeeio you seeere grilling tim cook later. we talked to his staff yesterday and they were arguing that we need to not wait here for overall tax reform before the senate takes a look at some of these loopholes that they say apple took advantage of here to create these companies without a country so to speak. he says what they did was take offshoring to a whole new level and something like no shoring and what he’d like to do is eliminate the ability of companies to do that. john mccain, the republican on the committee seemed to support his comments and clearly, there are two key senators that need to be two key changes in the law that would prevent apple from doing this. whether that has the steam politically to get all of the way through a tax process is an entirely different question and probably a long way off for now, but what they’re doing here is trying to tee up that battle for the future. tax reform was something greeted happily by many who run the corporations. eamon, thank you. when we talk about apple, we talk about an awful lot of cash that are overseas and some estimates have all corporations and cash holdings and it’s somewhere $1.9 trillion. apple, the largest single cash hoard, of course. cnbc’s john ford has more on the overhaul of the tax code and on apple’s overseas cash. john? yeah, you know, it’s pretty phenomenal david to watch this hearing take place and the homeland security and governmental affairs committee is the one that’s over this subcommittee. carl levin and john mccain. finally, we found something that congress can agree on. rand paul, however, as part of this hearing called out, congress should apologize for hauling apple out and apple hasn’t broken any rules here and it’s their 102 billion in cash that apple now has overseas. that’s growing. the balance of nearly $150 billion total that apple has that is in the u.s. take a look at what’s happened to apple’s stock today thus far. it looks to be down a bit perhaps on this where the overall market is about flat. apple operations international is the name of this — this sub group that apple created, incorporated in ireland and said, it’s not managed in ireland, therefore it doesn’t need to be taxed in ireland. hey, united states because it’s not incorporated in the united states you can’t tax us either. it will be interested to see what tim cook has to say about that. that seems to be the kind of thing that your average american who pays taxes might have some questions about and apple, of course, very protective of its image, plus there’s the fact that apple operations international and some of those subsidies that the subcommittee has talked about don’t have employees even. here is a key also. apple shifted $36 billion in global sales income away from the u.s. avoiding $9 billion in taxes in one year more than $1 million an hour. that is the kind of figure that your average person can wrap their minds around and there might be some questions about, so we’ll see how that plays out as this hearing continues, david. all right. john ford for us. thank you very much. let’s get more on what this means for tim cook and apple and carly fiorina is the former chairman and ceo of hewlett-packard and she joans us with bill george, the former chairman and ceo of medtronic and he sits on the board of exxon mobil and goldman sachs. hewlett-packard is one of the companies that’s previously been in the cross fire for this kind of activity. so do you think it’s in violation of the law or the spirit of the law for these tech companies to shift profits overseas for more favorable tax rates. no, it’s clearly not and it’s a reflection of the fact that it is uncompetitive and it’s unproductive in its complexity and it would be more productive instead of senators feigning outrage and shock that companies would exploit that complexity to minimize their tax rate which is is the high of the in the world now, and i think a more productive use of time is to talk about how aree going reform this tax code so that it is competitive in its rate and it is vastly simpler for the benefit of all businesses, but particularly small businesses and so we can move some of that cash from overseas back to this country. i think that’s what you’re going to hear every ceo say. you’ve got to lower the rates. you have to close the loopholes and simplify this tax code and hauling up companies to berate them for

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