Apple’s Tim Cook To Propose Tax Changes To Congress
Apple CEO Tim Cook plans to propose tax changes in the U.S. to encourage companies to bring money company cash funds back to the country.
According to The Washington Post, Cook believes that the 35 percent tax rate on funds brought back to American soil is a “very high number.” The CEO commented:
“We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable.”
The Apple executive will be facing congressional queries on the iPad and iPhone maker’s overseas cash deposits and tax bills next week. Microsoft and Hewlett-Packard have also faced U.S. government questions over practices of keeping large offshore funds in order to lower tax bills.
Apple paid $6 billion in federal corporate income tax in 2012’s fiscal year, and is on track to pay $7 billion in FY2013.
Cook plans to propose tax changes at the Senate hearing in order to encourage companies to bring offshore money home for investment in the United States, and to help promote job creation and research & development. The Apple CEO wants a “dramatic simplification” of corporate tax laws, with lower rates for businesses. However, with so many ways available for firms worldwide to side-step taxes, it remains to be seen whether lowering corporate rates will make a difference.
In the U.K. on Thursday, Google was accused of “devious” and “unethical” behaviour at a tax hearing. The search engine giant only paid 1.5 percent in FY2011 by keeping its base of operations outside of the country, even though the U.K. stipulates a tax rate of 28 percent.
According to a JPMorgan report, over 1,000 U.S.-based companies hold an estimated $1.7 trillion in cash overseas.