Apple Inc. (NASDAQ:AAPL) CEO Tim Cook went before a U.S. Senate committee to testify about its business model involving taxation. While it was likely meant to attack corporations for “dodging” taxes by storing money in overseas accounts – and that was how at least one side of the political aisle tried to describe it – the appearance and testimony of the CEO of arguably the most recognized company in the world may likely be what stokes the conversation once and for all about the U.S. tax code and its many credits and deductions and “loopholes” that make it so hard to understand for senators and easy for businesses to be legal while not paying their “fair share.” Whatever that is.
Tax reform has always been a discussion among the American public, but it has barely gotten a hearing in the halls of Congress, much less any action on legislation. Apple Inc. (NASDAQ:AAPL) attempted to step to the plate Wednesday and spell out for the American people that Congress has done the tax code wrong and it needs fixing.
Apple has made claim all along that what it is doing is not breaking or skirting any laws; the tax code is what the tax code is, and it made more sense for Apple to sell bonds to provide money for stockholders than to bite a large tax bill by repatriating billions of dollars in overseas profits.
And now the European Union is trying to skirt around the blame for its lax tax policies that have allowed multinationals to be compliant with the law while paying only a small fraction of its revenue in taxes (in some cases, as little as 1-2 percent). Instead of really addressing reform of the tax policy in the EU, the Union instead is considering some policies that would force multinationals like Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) to be transparent and report on the taxes they pay to the countries in which they do business.
This, by the way, does not actually address the problem; it makes it more obvious to citizens of the EU nations that their governments didn’t understand how to develop the tax policies that are currently in place. They may find that everything these companies are doing are truly compliant with EU laws and that these companies are paying only what they are mandated to pay.
We think that idea will not be aimed at the “evil” corporations at the end of the day; the governments will be the ones having to answer for these meager tax bills that companies like Apple Inc. (NASDAQ:AAPL) and the rest pay to their respective national governments.
So while Apple Inc. (NASDAQ:AAPL) is an American company that spoke before a committee in an American legislative body, Tim Cook may have just started not just a national debate, but an international debate for the citizens of the world to decide: is corporate greed or government incompetence the side that wins the battle of public perception? What are your thoughts? Let us know in the comments section below.