Rand Paul: Why is Apple being hauled before Congress to explain its perfectly legal tax minimization scheme?

posted at 5:21 pm on May 21, 2013 by Allahpundit

Watching both clips will cost you 10 minutes, but they’re worth it. (Conn Carroll has a partial transcript in case you can’t spare the time.) The background is straightforward: Congressional investigators discovered that Apple’s been using an unusually complex — but apparently perfectly legal, and decidedly clever — cluster of international tax shelters to lower its tax burden. For example, they have a holding company incorporated in Ireland that keeps its bank accounts in the U.S.; because Ireland assesses residency based on where the company’s assets are while the U.S. assesses residency based on place of incorporation, the holding company effectively exists nowhere for tax purposes. Apple saved $44 billion since 2009 from tricks like this, which, averaged over four years, means the lost tax revenue last year could have paid for a single day of federal spending. But again — all perfectly legal. Even if you think it shouldn’t be, you run into Paul’s point in the second clip, namely, why not just have a Senate debate on tax reform rather than try to shame Apple with hearings for doing what literally anyone else in their position would have done (potentially at the risk of being ousted by shareholders if they didn’t)?

What’s especially bizarre about this is Democrats attempting to make an example of a company that’s universally respected for its innovation, even among the lowest of low-information voters. If you want to demagogue corporations for lightening their tax load, politics 101 says to find a company that’s far removed from the average joe or, at least, whose product reliably produces grumbles about the cost or quality. Defense contractors and oil companies are always easy marks. Instead they chose the one corp above all others whose products nearly everyone likes, and whose late founder has become a symbol for can-do entrepreneurial success — a point Paul was shrewd in emphasizing today:

I guess the Dems figured that it’d be better to focus on a household name so that people would pay extra attention to the hearings. I think that’s a miscalculation. We’ll see. In the meantime, I leave you with this:

Paul’s GOP colleague, Sen. John McCain (R-Ariz.), also defended the Senate inquiry, calling it “offensive” for anyone to accuse [Carl] Levin of bullying.

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antifederalist on May 21, 2013 at 7:41 PM

Nope – not unless there is some criminal/civil investigation. Hauling govt employees in front of them as part of their role in govt oversight I have zero problem with. I wish congress of either party would quit deferring their adminsitrative oversight to some faceless bureaucrat.

Zomcon JEM on May 22, 2013 at 8:37 AM

Levin is prepping for his role in an upcoming remake of Atlas Shrugged.

claudius on May 22, 2013 at 8:58 AM

I’m proud of Apple. Any person or company that can find ways around the onerous tax laws does so to avoid paying onerous taxes. They didn’t even have to buy off a congress critter to do it, too. Maybe that’s what they’re pizzed off about.

Kissmygrits on May 22, 2013 at 9:29 AM

At some point, isn’t it unpatriotic to pay taxes?

iwasbornwithit on May 22, 2013 at 11:06 AM

Typical Rand Paul, standing up for liberty and chastising liberal crap. He doesn’t care what other people in congress think. He says it like it is and he is usually right.

cmc on May 22, 2013 at 12:21 PM