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:
Apple has done more to enrich people’s lives than politicians will ever do.
— Senator Rand Paul (@SenRandPaul) May 21, 2013
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.