Apple’s Tim Cook Tells Congress The Tax Code Is Outdated
You may recall that Apple was on tap to testify at a Senate Permanent Subcommittee on Investigations hearing yesterday regarding accusations that it dodges taxes. As expected, Apple CEO Tim Cook denied the accusations. He did offer up his idea for tax reform while he was there though.
During the hearing, Cook slammed the current U.S. tax code for not keeping up with the “digital age.” He also said that the “tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital.”
So, what does Cook suggest the U.S. do about it? He says that the corporate tax rate needs to be slashed. His suggestion calls for a drop from a 35 percent tax rate to a mid-20s tax rate. He also encourages Congress to lower the tax rate on foreign earnings being brought into the U.S.
The result of the above, Cook says, would encourage more investment in the United States and create more jobs. He even explicitly said that Apple will not bring billions in cash back to the U.S. unless Congress lowers the tax rate.
There are many congressman who no doubt agree with Apple on this issue, but one vocally came out in defense of the company yesterday. The Hill reports that Sen. Rand Paul said the subcommittee’s hearing on Apple’s alleged tax avoidance was offensive. He called upon the subcommittee to immediately apologize to the company.
Even after all of this, Apple isn’t quite done defending itself against accusations of tax avoidance. Reuters is reporting that major European leaders will be meeting to discuss what it sees as tax dodging from major tech corporations like Google, Apple and Amazon. Investigations have found that governments within the EU miss out on over €1 trillion, or $1.3 trillion USD, in tax revenue.[h/t: The Hill] [Image: lemagit/flickr]