Apple's Tim Cook Staunchly Defends Corporate Tax Payments - InformationWeek

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12/20/2015
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Apple's Tim Cook Staunchly Defends Corporate Tax Payments

In an interview with 60 Minutes, Apple CEO Tim Cooks defends how the company pays its corporate taxes and calls criticism of the tech firm "political crap." There's also a behind-the-scenes look with Jony Ive.

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In an upcoming interview on CBS' 60 Minutes news program, Apple CEO Tim Cook takes aim at critics leveling charges at the company over its payment of corporate taxes, calling the criticism "political crap."

When asked by interviewer Charlie Rose how he felt when being called by politicians that the company is a tax avoider, Cook responded by saying that Apple pays more taxes in America than anyone.

Rose responded by affirming that Washington knows this, and that the taxes the company pays are fair because of how much money Apple rakes in.

"I don't deny that -- we happily pay it," Cook responded. He also pointed out a lot of their money is overseas because two-thirds of their business comes from outside the United States.

When asked by Rose why he wouldn't bring that money back home, Cook said he would love to, but won't because it would cost him 40% of the total sum to do so.

(Image: EdStock/iStockphoto)

(Image: EdStock/iStockphoto)

"I don't think that's a reasonable thing to do," Cook explained. "This is a tax code, Charlie, that was made for the industrial age, not the digital age. It's backwards, it's awful for America. It should have been fixed many years ago. It's past time to get it done."

Rose then brought up the idea, proposed by some politicians, that Apple is in fact "engaged in sophisticated scheme to pay little or no corporate taxes on $74 billion in revenues held overseas," to which an increasingly animated Cook shot down immediately.

"That is total political crap," Cook said. "There's no truth behind it. Apple pays every tax dollar we owe."

The Apple story will be broadcast on 60 Minutes Sunday, Dec. 20, at 7:30 p.m. Eastern Time and 7 p.m. Pacific Time, and will also include a rare behind-the-scenes interview and tour with Jony Ive, Apple's design chief, who let the news crew's cameras into his studio for a look at the process that gave birth to products like the iPhone and iPad.

The interview with Cook also touches on consumer privacy issues, though the 60 Minutes website notes the interview was conducted before the terror attacks in Paris, where terrorists used encrypted messages as a means of communication.

Cook said he was against the idea of a so-called "back door," a surveillance term that would give government agencies -- and theoretically anyone smart enough to unlock it -- access to personal communications.

[Read how Tim Cook defends the iPhone's battery life.]

"There have been people that suggest that we should have a back door. But the reality is if you put a back door in, that back door's for everybody, for good guys and bad guys," Cook explained. "I don't believe that the trade off here is privacy versus national security. I think that's an overly simplistic view. We're America. We should have both."

Earlier this year, Cook gave an impassioned speech on defending consumer privacy and encryption, while being honored for corporate leadership by the Electronic Privacy Information Center (EPIC).

In addition to leveling charges at companies who use their users' data for profit -- he didn't name names, but Google, Facebook, and Twitter would all fit into that business model -- he blasted Washington politicians and claimed taking away encryption would have a "chilling effect" on Americans' First Amendment rights.

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Nathan Eddy is a freelance writer for InformationWeek. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin. View Full Bio

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Ashu001
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Ashu001,
User Rank: Ninja
12/31/2015 | 12:15:53 PM
Re: I wouldn't pay 40%. Would you?
Broadway,

Rather than get into a Debating match with (regarding whether Buffet is Good or Evil or whatever);I would like to share with you some awesome Articles published in Mainstream business Journals like the WSJ,explaining his so-called "Image Problem".

When the WSJ says there is something fishy behind the Buffet empire,there is a strong possibility that they are atleast partially right-www.wsj.com/articles/warren-buffett-has-an-image-problem-1447371811

You are free to make your own respective judgements accordingly-libertyblitzkrieg.com/2014/03/17/more-hypocrisy-from-warren-buffett-as-he-structures-deal-to-avoid-400-million-in-taxes

& www.zerohedge.com/news/2015-11-13/buffet-backlash-anger-builds-hypocrite-billionaire-hiding-behind-folksy-facade & www.zerohedge.com/news/2015-05-07/dan-loeb-slams-buffett-being-habitual-hypocrite
Ariella
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Ariella,
User Rank: Author
12/30/2015 | 6:15:02 PM
Re: I wouldn't pay 40%. Would you?
@Ashis As someone who has been through working in NYC while we lived in NJ and working in NJ while we lived in NY, I can tell you that we did not choose that for tax benefits. In fact, it's a pain in the neck because I have to file two different tax returns and calculate how much credit we get for the taxes paid into one state for the other. Whether you live and work in NY or just work in the state, it demands its cut, which can be more than NJ's. 

 

Italy's tax authories ruled against Apple, which will have to pay in the neighborhood of $350 million in taxes. See http://www.nytimes.com/2015/12/31/technology/apple-settles-tax-dispute-with-italian-authorities.html:

The investigation, which dates to 2013, examined whether Apple had moved roughly $1.1 billion in revenue from its Italian operations through an Irish subsidiary to lower the taxes that the company was obliged to pay in Italy.

The country's investigation into Apple's activities is the first time that an individual European country has focused on the company's complicated corporate tax structure, though policy makers in countries like France have previously looked at other tech companies' tax arrangements, including those of Google.

progman2000
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progman2000,
User Rank: Ninja
12/30/2015 | 6:55:34 AM
Re: I wouldn't pay 40%. Would you?
Yes, in the end I think Buffet is a good guy, no doubt. It is pretty much impossible to make money without someone suffering in some way from it, and he at least has given back.
Broadway0474
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Broadway0474,
User Rank: Ninja
12/29/2015 | 11:20:28 PM
Re: I wouldn't pay 40%. Would you?
progman, sure, probably whole companies' worth of people have suffered at the macro moves that Buffett has made over the years. Berkshire is essentially a public equity fund, but like a private equity fund, they buy up companies and squeeze either "value" -- or the life -- out of them. But like the classic industrialist robber barons of the Gilded Age, Buffett has given away his wealth to make up. No?
Ashu001
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Ashu001,
User Rank: Ninja
12/29/2015 | 11:00:52 PM
Re: I wouldn't pay 40%. Would you?
Progman,

Yes that is a very fair statement to make.

Especially in such a case when the Image that has been carefully cultivated in Mass-Media is so-so different from the Ground Reality (like here).

Same goes for other Tech Billionaires like Zuckerberg;Are you tracking how he's desperately throwing millions upon millions(in Advertising Dollars) to try and influence the Net Neutrality Debate in India currently-blogs.timesofindia.indiatimes.com/voices/ddosing-a-regulator-a-how-to-manual-from-facebooks-free-basics

 

Basically under altruistic Motives he's trying to get a billion Indians hooked onto FB on the cheap.

Its beyond amazing when one actually looks into the Contents of the Package which he is offering(for free) after stripping away all the Advertising Sheen; that none of the Top 10 most in-demand Websites in India(excluding FB) will be Free under their offering.

 
progman2000
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progman2000,
User Rank: Ninja
12/29/2015 | 7:05:37 AM
Re: I wouldn't pay 40%. Would you?
Yeah, I want to believe Warren Buffet is a good guy too. But it is hard in this day and age to look at someone who amassed that enormous pile of wealth without thinking that plenty of people got screwed in the process - warranted or not...
Broadway0474
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Broadway0474,
User Rank: Ninja
12/28/2015 | 11:26:47 PM
Re: I wouldn't pay 40%. Would you?
Ashu001, good points about Apple. As for Warren Buffett, you're killing me here! If anyone in the free market capitalist pantheon of gods is a decent human being, I would point to him (and Jon Huntsman Sr. too). Buffett gave away the vast majority of his billions, right? For that alone, I would give him a pass. His mega-conglomeration of companies? No pass on their behaviors. 
Ashu001
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Ashu001,
User Rank: Ninja
12/27/2015 | 10:56:04 PM
Re: I wouldn't pay 40%. Would you?
Ariella,

Tax-Arbitrage(which is what you are pointing out here) is clearly legal and many-many folks tend to take advantage of it routinely.

I don't know anyone who won't take such chances or make the most of such oppurtunities given the chance to do so.

Look at all the Folks commuting from NH,NJ,etc to NYC and back for example.

 
Ashu001
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50%
Ashu001,
User Rank: Ninja
12/27/2015 | 10:24:59 PM
Re: I wouldn't pay 40%. Would you?
Broadway,

I don't think anyone (from the Political /Regulatory/Media & Legal Fields -The real Power Elite)goes after Apple because they are Oh so Good and Saintly!

Its primarily because they are one of the TBTFs(Too Big to Fail Corporations) and anyone who has any ambition in any of the above fields knows he/she will get instant publicity if they go after Apple.

Its that simple.

That's all that this Media Circus has turned out to be today.

I know most folks won't like hearing it but Apple is working just like a Normal Successful American Corporation works today.It reminds me of the Tricks that other so-called "Saint"- The Oracle of Omaha indulges in when it comes to adding more and more to his Billions upon Billions.

Like what he did with the desperately poor via his Corporation Clayton Homes HERE-www.seattletimes.com/business/real-estate/minorities-exploited-by-warren-buffetts-mobile-home-empire-clayton-homes & libertyblitzkrieg.com/2015/04/05/warren-buffett-the-slumlord-predatory-loans-kickbacks-and-preying-on-the-poor-at-clayton-homes

If you think the Super-Rich& power-elite actually care of the rest of us Ordinary/Middle-Class Americans you are sadly-sadly mistaken.

This kind of predatory behavior is routine for them.Sad But True story .


 
Ashu001
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Ashu001,
User Rank: Ninja
12/27/2015 | 4:50:32 AM
Re: I wouldn't pay 40%. Would you?
mak63,

Very fair point you make here!

Apple is just doing what most Professional Corporations do today when they try to Minimize their Tax Burden as much as possible.

When it comes to taking care of the country my first suggestion is to figure out precisely how much is a fair-tax burden first and then apply the same for everyone.

America's Tax code as it stands is too burdensome and cumbersome for anyone who can't hire atleast a couple of Full-time Tax Lawyers.

A Flat Tax(with no Rebates,etc for anyone) makes so much sense from a Compliance Point of view but the problem is since most of Representatives in Congress are in the pockets of these Corporations it will never happen.

And besidies I don't think Americans have much of an interest in making it happen either.If they did,they would have voted in Dr Ron Paul for President in 2012 and given him the chance he was asking for.
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