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Apple’s CEO, Tim Cook’s testimony was Calm and Precise, no Senator laid a glove on him β­β­β­β­πŸ“πŸ“

May 21, 2013

Those nervous Apple investors need not have worried. Apple’s CEO, Tim Cook’s testimony was Calm and Precise, and when it was over, nobody had laid a glove on him.

βœ” It was with some trepidation that Apple investors tuned in to C-Span.org Tuesday morning to watch Cook’s appearance before the Senate’s Permanent Subcommittee on Investigations, which had conducted a detailed probe of Apple’s offshore tax havens.

βœ” The subcommittee’s staff report, released on Monday, was savage. The New York Times’ front-page headline was scathing (Billions in Taxes Avoided by Apple…).

βœ” Chairman Carl Levin’s (Dem., Mich.) press release was fierce: “Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,” he said of Apple’s Irish subsidiaries. “Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars.

βœ” Carl Levin intends to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed.”

βœ” Loophole-Smoophole, one would think that even US Seators would get it. If Apple (or any US based company) sells products in the USA it pays US Taxes; True International companies such as Apple, sell products in 100 non-US Countries, and therefore do not pay US Taxes on foreign sales. Likewise, non-USA, foreign companies do not pay US Taxes on foreign sales; However, they if Foreign companies sell products in the USA, they pay taxes on profits earned in the USA.

βœ” Apple paid over $6 Billion in US Taxes, the largest manufacturing Taxpayer in the USA, and the Democratic controlled Senate is whining, as it wants more. Hey, Senate, STOP Spending.

βœ” Those nervous Apple investors needn’t have worried. Cook’s testimony was calm and precise, and when it was over, nobody had laid a glove on him.

βœ” The Senators, for their part, were mostly respectful, and on occasion fawning. Claire McCaskill (Dem., Mo.) couldn’t say often enough how much she loved Apple. Ron Johnson (Rep., Wisc.) praised the company’s tax minimization strategies as shareholder friendly. Rob Portman (Rep., Ohio) only wanted to talk about his tax reform proposals. Rand Paul (Rep., Ken.) thought the committee owed Apple an apology. John McCain (Rep., Ariz.), after a bout of tax dodging rhetoric, wanted to know why his iPhone was constantly updating its apps.

βœ” Facing down blistering criticism on Capitol Hill that Apple sidestepped billions of dollars in taxes, the company’s chief executive, Timothy D. Cook, carefully defended Apple’s record Tuesday, rejecting any suggestion of misconduct but avoiding clashes with skeptical legislators.

βœ” Mr. Cook told a Senate panel during questioning by Senator John McCain, an Arizona Republican: β€œIt’s important to tell our story, and I’d like people to hear directly from me” Apple’s CEO said, β€œApple pays all the taxes we owe, every single dollar.”

βœ” Rather than taking unfair advantage of what Congressional investigators say are a host of tax code loopholes, Mr. Cook said his company was actually a victim of an outdated tax system.

βœ” Mr. Cook told a Senate panel β€œUnfortunately, the tax code has not kept up with the digital age….” β€œ….The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free movement of its capital.”

βœ” β€œTim Cook performed brilliantly in front of Congress today,” Dan Pallotta writes for The Harvard Business Review. β€œHe was authoritative, in breathtaking command of his facts, as he always is, and brought a unique perspective to each response. Senator Levin was out for blood, but β€˜No one laid a glove on him,’ as Phillip Emer DeWitt wrote for Fortune.”

βœ” β€œHe put his questioners to shame,” Pallotta writes. β€œHis response to the question of whether Apple was violating basic rules of fairness was brilliant: β€˜I am a fair person. Apple is a fair company. I would not administer [something that was unfair.]β€˜ This is no dime-a-dozen MBA or supply-chain guy. This is a man of unique character and exceptional intelligence with an opportunity to make his own mark, not just on Apple, but on history.”

♦ Apple’s Tim Cook published his Opening Statement delivered to the before the Permanent Subcommittee on Investigations in connection with its inquiry into the tax practices of multinational companies, an 18-page PDF file.

♦http://www.apple.com/pr/pdf/timcookopeningstatement.pdf



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One Comment
  1. Hi! Do you use Twitter? I’d like to follow you if that would be ok.
    I’m absolutely enjoying your blog and look forward to new
    updates.

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