Based on Apple founder Steve Jobs’ political viewpoints, you might expect his company to be enthusiastic about paying taxes. Not only should they be happy to do that much, you might expect the company to contribute a little extra every so often due to its success and ability to pay more in than others.
Not so, according to the Senate Permanent Subcommittee on Investigation. The committee on Tuesday listened to testimony from Apple CEO Tim Cook in response to allegations that Apple sheltered $44 billion from taxes by incorporating in Ireland, where it was taxed at a rate of 2% for the last 10 years. The average tax rate in Organisation for Economic Co-operation and Development (OECD) participating countries was 24%. For the privilege of repatriating its money to the U.S., Apple would need to donate 35% to the federal government.
As a result, Ireland’s economy has been assisted by international investment. U.S. firms invested $30 billion in Ireland last year. Apple announced it would be adding hundreds more jobs in the country. Google, Microsoft, and Facebook also facilitate substantial amounts of business through Ireland.
Senator Rand Paul (R-Ky.) suggested senators should have apologized to Apple instead of harassing the company. “I’m offended by a government that convenes a hearing to bully one of America’s greatest success stories,” he said at the hearing. “What we really need to do is just apologize to Apple, compliment them for the job creation they’re doing.”
Apple is advocating for a “simplification of the corporate tax system that is revenue neutral, eliminates all tax expenditures, lowers [corporate] income tax rates and implements a reasonable tax on foreign earnings that allows free movement of capital back to the U.S.”
On its face, that seems like a worthy goal. But it is not what Apple founder Steve Jobs supported philosophically. From his home in California, Steve Jobs contributed thousands over the years to Chicago Representative (now Mayor) Rahm Emanuel, Massachusetts Senator Ted Kennedy, House Minority Leader Nancy Pelosi, and other Democratic politicians who sought confiscatory tax policies.
His political efforts led to the very tax rates that Apple is now declining to pay. The average American pays 29.4% of their income to local, state, and federal governments each year, just short of the 35% that Apple would remit if it brought its earnings back to the country.
Low tax rates for the politically connected amid high tax rates for the poor are hallmarks of crony socialism. Tim Cook notably has not contributed to any politicians to date. That’s cause for hope that his tenure just might mark a new era, one in which Apple will advocate for fairer, lower tax rates for all Americans — and not just its own executives.