Tim Cook to propose tax overhaul before Congress
Amid scrutiny over his company's own offshore tax practices, Apple CEO tells Washington reporters about his plan to simplify corporate tax laws. This from the company that's always shied away from politics.
In yet another recent example of Apple's increasing role in Washington politics, CEO Tim Cook reportedly plans to propose a "dramatic simplification" of corporate tax laws before Congress next week -- and is taking to the D.C. press to argue his case.
At a hearing on May 21 before the Senate Permanent Subcommittee on Investigation, which CNET learned about last night, Cook says he will present proposals aimed at "encouraging companies to bring back foreign earnings to the United States and invest that money into creating jobs, as well as research and development," according to an interview he gave to The Washington Post. Cook declined to lay out the details of his proposed plan.
Cook's appearance -- his first before Congress -- is an apparent offensive move as Apple has been defending its own offshore tax practices."I can tell you unequivocally Apple does not funnel its domestic profits overseas. We don't do that. We pay taxes on all the products we sell in the U.S., and we pay every dollar that we owe. And so I'd like to be really clear on that," Cook said in a rare interview with Politico.
The subcommittee has been examining the various tax-avoidance strategies used by companies like Microsoft and Hewlett-Packard.
Apple recently announced a $17 billion bond plan as part of its shareholder capital returns plan that will save it $9.2 billion in taxes it would have had to pay had it tapped its huge overseas cash pile. Even though Apple has $145 billion in cash, more than $100 billion of that is held outside the U.S. By issuing bonds, Apple will have money to use without getting hit with what's currently a 35 percent corporate tax rate.
Apple has never had a large Washington contingent and Cook's predecessor, the late Steve Jobs, stayed far away from national political theater. But Cook's recent moves could be signaling a company shift. His announcement last December that Apple would invest $100 million in an effort to move some Mac production to the U.S. got Cook a call-out from President Barack Obama in his State of the Union speech and a seat next to First Lady Michelle Obama.
"We don't have a large presence in Washington, as you probably know, but we care deeply about public policy and believe creative policy can be a huge catalyst for a better society and a stronger economy," Cook told Politico.