Apple Inc. is not only the world’s leading cell phone designer, it is also number one when it comes to falsely asserting that most of its profits are earned in tax havens. The company has $215 billion in profits that it pretends are offshore, thus is avoiding an estimated $66 billion in U.S. taxes. Apple’s enormous stash alone accounts for nearly 10 percent of the $2.4 trillion in profits that multinational companies claim are offshore for tax purposes.
Tim Cook, CEO of Apple, feels no shame about his company’s tax-avoiding ways. On the contrary, he’s proud of it. In a recent interview with the Washington Post, he vowed that Apple will never pay taxes on the profits it has artificially shifted offshore until the U.S. enacts a “fair” tax rate. What does he think is “fair”? Well, at a 2013 Senate hearing, he suggested that a 5 percent tax rate might be acceptable.
That’s a far cry from the statutory 35 percent tax rate that Apple has avoided paying through its tax shenanigans.
Apple is not alone in believing that it should be able to avoid its tax responsibilities, although it may be the most arrogant about it. Many, many other multinational corporations, especially those with valuable trademarks, patents, copyrights, and other “intellectual” property, have found ways to pretend that those assets are located in tax havens, and that the profits they generate should therefore be tax-exempt.
The tax laws that allow such preposterous claims — written, of course, with the help of the tax-avoiding companies — need to be changed. You and I can’t decide that we should be allowed to pay a ridiculously low tax rate. Neither should multinational corporations.