Brian Levin, criticizing Tim Cook’s “financial maneuvering” on Medium:
I’m angry because Apple not only engages in the questionable practice of stashing its cash in offshore tax havens, it has become the greatest offender, avoiding US taxes on $74 billion over the past four years. There’s something fundamentally wrong when the wealthiest company in America pays 12.6% in taxes, while my father’s small business, my grandfather’s store and the Korean Deli across the street pay a rate nearly three times higher. And it’s not just savvy accounting or a strategic maneuver—Apple’s tax avoidance has a profoundly damaging effect on our whole country.
Earlier today, Tim Cook testified for a Senate Committee in regards to this exact issue. If you were just to listen to the loudest voices, you’d think Apple had become a mafia style tax avoider that stashes money in a secret Cayman account to hide it from the government.
But Apple has done absolutely nothing illegal. Unlike Brian’s grandfather’s store and Korean Deli, Apple does business in dozens of countries. They pay taxes in each country they do business, so if an iPhone is sold in the US, they pay income taxes in the US. But if it’s sold in Russia, they’ll follow whatever the local tax practices are.
For some reason, the US Congress feels entitled to income taxes on business that was not done in the US in any way. An iPhone manufactured in China and sold in France had nothing to do with the United States, except for the time it took to design it. But income taxes aren’t based on time, they’re based on products sold.
I’m no tax expert, but that’s why Apple’s income tax rate looks so low. It’s dividing taxes paid by income earned everywhere, not just the US.
Apple hasn’t broken the law, and if you think people have called for Tim Cook to be fired because of the iPhone 5 or share prices, I can’t even imagine a CEO that would be giving money unnecessarily to the government. That would be irresponsible to shareholders.
If you don’t like Apple’s tax practices, talk to your local representative, but don’t get angry at Apple. They’re just playing the cards they’re dealt.