Apple Tax Hearings: Carl Levin Turns Up The Heat on CEO Tim Cook Again
The first fireworks of the hearing have come out. Carl Levin questioned the agreements that Apple signed with thee of its subsidiaries.
Levin pointed out that Apple was giving up the economic intellectual property rights, “the crown jewels” as Levin put it to three companies owned and operated by Apple. Levin pointed out that their earlier testimony has CEO Tim Cook saying that this was true.
Levin was not making any question of wrongdoing but rather stating that $100 billion in profits was cached overseas and the profits mostly originated from the United States
He then made an acquisition that Cook told Levin’s staff that those moneys would not return unless tax rates were reduced, essentially accusing Cook of holding the money hostage. Cook protested but backed down after Levin pressed. Cook then agreed somewhat to Levin’s comment, saying that the money was not going to stay overseas “forever.”
Apple CFO Peter Oppenheimer keeps trying to bring up the initial 1980 agreement but Levin is countering with the 2008 agreement. Oppenheimer is very reluctant to discuss the 2008 agreement.
Levin’s overall point is that this was a willful decision and not just a continuation of a 30-year-old policy.
Oppenheimer really does not want to discuss the results of 2008 decision and its transfers of most of Apple’s worldwide profits to three Irish companies that pay barely any taxes, making a direct appeal that "people love the iPhone and iPad."
Carl Levin defused it by saying that he loved Apple products as well but kept on the attack. He brought up the fact that Mexico and Canadian income comes back to the United States but not the majority of international profit, which goes to the Apple owned Irish corporations that pay little to no taxes.
Levin’s overall point is that we have to understand what is going on before we press for change to the system.
And with that explosive round of question, Tim Cook can go back to Apple HQ in California.