As the nation’s presidential candidates lay out their visions for the U.S. tax system, pressure is being put on major multi-national corporations to bring back the potential tax revenues that have been lost from U.S. businesses operating abroad. For organizations like the non-profit Citizens for Tax Justice, it’s a matter of patriotism.
Not so fast, says Apple CEO Tim Cook. In an interview with the Washington Post, Cook reiterated that the company would not consider repatriating its money until the government does something about the excessive tax rates being levelled at U.S. corporations, a rate that sometimes reaches as high as 35%.
According to Cook, “It is the current tax law. It’s not a matter of being patriotic or not patriotic. It doesn’t go that the more you pay, the more patriotic you are.” When discussing the ethics and legality of what Apple is doing, Cook stresses “The tax law right now says we can keep that [profit] in Ireland or we can bring it back.”
The debate over allowing U.S. corporations to avoid taxes by maintaining operations overseas has raged on for years now. It really makes good business sense to avoid paying taxes at levels that are simply not competitive. The focus shifts to the government to redesign the tax code in a way that treats everyone and every organization fairly.
The GOP’s Donald Trump recently released his tax plan that calls for lowing the corporate tax rate from 35% to 15%. Democrat nominee Hilary Clinton counters by saying she wants higher taxes on the wealthy and a system of guidelines that would discourage companies from trying to shield earnings abroad.
Despite Cook’s refusal to bring almost $200 billion in cash home at the current rates, it’s interesting that he support the Clinton ticket. With what Citizens for Tax Justice estimates is over $2.0 trillion in corporate cash sitting oversees, it becomes clear that something needs to be done to satisfy both sides of this issue.