The IRS, never anyone’s favorite jackbooted thugs, isn’t exactly riding a wave of popularity these days.
Which is why the timing of this hearing is so comical:
You almost have to admire Carl Levin’s timing. Amid a furor over politicized IRS tax enforcement, the Michigan Democrat on Tuesday tried to change the subject to a hardy Washington perennial—corporate tax loopholes. Too bad his designated business pinata, Apple, demonstrates instead the insanity of the tax code that Mr. Levin has done so much to write.
Mr. Levin unveiled the results of his months-long investigation into Apple’s corporate taxes and accused the American business success of employing “alchemy” and “gimmickry” to lower its tax bill. What Mr. Levin did not do was present any evidence of anything illegal or even inappropriate. He did prove that Apple has smart accountants and tax lawyers.
Mr. Levin is outraged that Apple subsidiaries in Ireland pay little or no corporate income tax on profits generated from Apple’s international sales. Ireland has a laudably low corporate tax rate of 12.5% to attract jobs and capital, but it turns out that for certain corporations controlled by entities outside Ireland, the deal gets better.
The Apple units are based in Ireland, so U.S. law does not consider them to be U.S. corporations subject to U.S. corporate tax. But since they are managed and controlled by Apple in the U.S., Irish law doesn’t consider them Irish companies and thus they are also not subject to the 12.5% Irish corporate tax. This isn’t alchemy; it’s accountancy.
Quite. To paraphrase another Democrat statist, you have to pass the tax bills to find out what’s in them.
This saying seems apt: “If you have the facts on your side, pound the facts. If you have the law on your side, pound the law. If you have neither on your side, pound the table.”
Levin said that because of the lost revenue, “children across the country won’t get early education form Head Start. Needy seniors will go without meals. Fighter jets sit idle on tarmacs because our military lacks the funding to keep pilots trained.”
Thank you, Apple, for not wasting your profits funding Head Start—which has been demonstrated to be useless!
The kangaroo court did provide one benefit to society: here is one of the greatest displays of oratory in the history of Congress.
I am offended by the tone and tenor of this hearing. I am offended by a $4 trillion government bullying, berating and badgering one of America’s greatest success stories.
Tell me one of these politicians up here that doesn’t minimize their taxes. Tell me a chief financial officer that you would hire if he didn’t try to minimize your taxes legally. Tell me what Apple has done that is illegal.
I am offended by a government that uses the IRS to bully groups such as the Tea Party but I am also offended by a government that convenes a hearing to bully one of American’s success stories.
I am offended by the spectacle of dragging in here executives from an American company that is not doing anything illegal. If anyone should be on trial here, it should be Congress.
I frankly think the Committee should apologize to Apple. I frankly think Congress should be on trial here for creating a bizarre and byzantine tax code that runs into the tens of thousands of pages, for creating a tax code that simply doesn’t compete with the rest of the world.
This committee will admit: Apple has not broken any laws. Yet, they are forced into a show trial at the whims of politicians, when in fact; Congress should be on trial for chasing the profits of great American companies overseas. You haul before this committee one of America’s greatest success stories and you want applause?
I say, instead of Apple executives, you should have brought in a giant mirror, so we could look at the reflection of Congress because this problem is solely and completely created by the awful tax code.
If you want to assign blame, the Committee needs to look in the mirror and see who created this mess, see who created the tax code that drives American companies overseas.
Our corporate tax is more than double Canada’s. I never thought I would be complimenting Canada’s tax code – our tax code is double Canada’s. Our corporate tax is over ten points higher than Europe. Instead of saying theirs is too low, why don’t we set about to work that ours is too high.
I would say what we really need to do is to apologize to Apple, compliment them for the job creation they are doing, and get about doing our job.
Look in the mirror and let’s make the tax code better, fairer, and more competitive world-wide. Money goes where it is welcome and currently our tax code makes money not welcome in our country.
I’m not officially endorsing Rand Paul for president, but surely that’s the kind of language Republicans should be speaking.