Apple chief Cook: You - senators. Get in here and redo this tax law
Listen up, Popeye, fix it if you don't like it
Apple supremo Tim Cook will dare US senators to rewrite tax laws seeing as the politicians are so upset about tech giants' tiny contributions to America's public coffers.
At a Senate hearing on Tuesday, the chief exec will suggest ways to persuade firms to bank their profits at home rather than in offshore accounts, a move that would put billions of dollars within the taxman's grasp.
Cook insists his Foxconn-rebranding operation does not divert US profits abroad.
“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 US, and we pay every dollar that we owe. And so I'd like to be really clear on that,” he told Politico.
Mirroring Google and Amazon's interviews without coffee in the UK House of Commons over tax, Cook has been summoned to the Senate's Permanent Subcommittee on Investigations to answer questions about how Apple's corporate structure helps it minimise its US tax bills.
The iPhone maker's move last month to borrow $17bn to buy back some of its stock, instead of adding to its taxes by withdrawing some of the $102.3bn in cash it holds offshore, has added to calls to clamp down on perfectly legal but arguably immoral tax reduction schemes.
Cook told the Washington Post that he planned to propose a "dramatic simplification" of tax laws that would encourage companies to bring their foreign earnings back to the States and invest it in job creation and R&D.
“If you look at it today, to repatriate cash to the US, you need to pay 35 per cent of that cash. And that is a very high number,” he said. “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.”
He also said that Apple would pay about $7bn in federal taxes this year.
"When you combine state and federal, Apple is paying approximately $1 million an hour in just domestic income taxes,” he said. “You may not know this, but Apple likely is the largest corporate taxpayer in the US."
Like other tech firms drawn into the tax debate in Britain and the US, Apple has also talked about how much it's doing for the American economy in general. The Mac OS X giant has said that it wants to bring jobs back to the US from China, including manufacturing work on the next line of its desktop computers in Arizona and Texas.
While major multinationals in other sectors, such as Starbucks, have been drawn into the tax row, internet firms have been a particular concern because their intellectual property - the lifeblood of these technology goliaths - is so easy to transfer to subsidiaries overseas.
Google came in for a lot of stick in its first hearing before the influential parliamentary Public Accounts Committee in the UK last November when it constantly brought up the fact that its tech innovation was done in America - so it made sense that its money was taxed there, too - but it then emerged that much of its blueprints are actually held in tax-haven Bermuda. ®