Apple is a pirate and worse – Wis Opinion

5/28/2013

Apple is a pirate and worse

By Bill Kaplan

The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com .

Former Wisconsin Democratic Rep. Dave Obey is a big fan of Michigan Democratic Sen. Carl Levin, Chair of the Senate Permanent Subcommittee on Investigations. This prompted me to pay more attention to Levin’s oversight hearings on corporate / financial chicanery and wrongdoing. And, the recent hearing on Apple and its avoidance of taxes was instructive and revealing.

The Senate investigation showed that Apple from 2009 to 2012 “shielded at least $74 billion in profits from U.S. tax laws by setting up subsidiaries in Ireland under a special arrangement”, according to the Washington Post. Some of Apple’s offshore subsidiaries had no employees or offices. And, Apple used the tax code and an army of accountants and lawyers to avoid paying billions in U.S. taxes. Arizona GOP Sen. John McCain said: “Apple claims to be the largest U.S. corporate taxpayer, but by sheer size and scale it is also among America’s largest tax avoiders.”

And, Apple is not alone. Sen. Levin said some of the largest U.S. multinational firms “paid nothing in federal income taxes over a recent three-year period. Zero.” Other American companies are able to use multiple tax deductions to pay much lower rates than the supposedly onerous rate of 35 percent. These bombshells were too much for Tea Party senators.

Kentucky GOP Sen. Rand Paul rose to support Apple: “I’m offended by the spectacle of dragging in Apple executives. What we need to do is apologize to Apple and compliment them for the job creation they’re doing.” And, Wisconsin GOP Sen. Ron Johnson defended Apple’s tax policies and suggested getting rid of the corporate income tax, despite the fact that corporate income tax receipts as a percent of total tax receipts are at an historic low. He lauded Apple for figuring out how to pay the least legally in taxes. Levin retorted: Apple doesn’t “have a right to decide in my book how much in taxes they are going to pay and to whom they are going to pay them”. There’s more.

It’s bad enough that Apple and other U.S. corporations have pirated away their profits overseas to avoid U.S. taxes, but they have also pirated away millions of U.S. (and Wisconsin) jobs abroad. And, it’s not pretty. The New York Times reported: “In the last decade, Apple has become one of the mightiest, richest and most successful companies in the world, in part by mastering global manufacturing ….However, the workers assembling iPhones, iPads and other devices often labor in harsh conditions…Problems are as varied as onerous work environments and serious – sometimes deadly – safety problems.” And, then there’s the race to the bottom for wages. Johnson seems clueless and oblivious to this and more.

Sen. Johnson believes that junking / reducing the corporate income tax would allow U.S. companies to bring foreign earnings home to create jobs in the U.S. But U.S. corporations are already sitting on trillions of dollars. And, a “repatriation holiday” in 2004 did not lead to the creation of U.S. jobs. The cash flowed to shareholders and corporate executives. It is time for U.S. corporations to haul down the pirate flag and fly the star-spangled banner.

— Kaplan wrote a guest column from Washington, D.C. for the Wisconsin State Journal from 1995 – 2009.