Tim Cook Gets Support From Peers

Tim Cook is backed in his salvo against taxes

Tim Cook made a compelling case that he is acting in Apple shareholders’ interests by keeping billions of dollars in cash overseas, out of the hands of the U.S. tax collectors, industry insiders told CNBC on Monday.

“There’s this natural tension, whereas the CEO of a publicly traded company’s got a fiduciary responsibility to ensure that revenues and profits are recognized in the most tax-efficient way possible,” said Jon Brod, co-founder and president of the encrypted messaging platform Confide.

As of late September, Apple reported to the Securities and Exchange Commission that $186.9 billion of cash, cash equivalents and marketable securities was held by foreign subsidiaries.

Now imagine if there was no federal income tax, portfolio tax, personal income tax, payroll tax, capital gains tax, and the repatriation tax was gone? Wouldn’t you think Apple wouldn’t mind bringing that $186.9 billion back to the U.S to invest in the economy?

Asked by CBS “60 Minutes” interviewer Charlie Rose about regulators’ conclusion that “Apple is engaged in a sophisticated scheme to pay little or no corporate taxes” on billions in off-shore revenue, the Apple CEO responded bluntly.

Sometimes when you’re fed up with all the bull—, you have to be blunt.

“That is total political crap,” Cook said in the interview, which aired Sunday night. “There is no truth behind it. Apple pays every tax dollar we owe.”

Facing a 40 percent tax penalty and a lack of American workers with the necessary skills, Cook said bringing Apple’s resources back to the United States wouldn’t be reasonable.

I found this quiet disturbing, considering the fact of how much money parents pay to send their kids to college and you wonder what the heck are they learning in there if they don’t have the skills to help develop one of the most popular iconic technologies in the world? In America? What the heck are these kids going to? A damn social club?

“This is a tax code, Charlie, that was made for the industrial age, not the digital age,” Cook said in the interview, which aired Sunday night. “It’s backwards. It’s awful for America. It should have been fixed many years ago — it’s past time to get it done.”

I absolutely agree with Tim here. I’m looking forward to presenting him with this legislation that Apple, as a whole, could be behind and support as well.

Since much of Apple’s revenue is made outside the U.S., there’s no reason to pay U.S. taxes on it, said Amit Daryanani, managing director and equity analyst at RBC Capital Markets.

“If these profits were generated in places where there were no or low taxes, then that’s Apple’s good luck or good marketing, and why should they have to pay taxes in the U.S.?” he said on CNBC’s “Squawk on the Street.”

As one of the world’s most valuable companies, the marketing that came along with the “60 Minutes” interview was an important departure for Apple, said Andy Cunningham, former public relations representative to late-CEO Steve Jobs.

“There was a time back in the day when we wouldn’t have even taken the call from ’60 Minutes,'” Cunningham told CNBC’s “Squawk Alley” on Monday. “But today … it’s really important that they extend a little bit of themselves out to the people, and I think this was a fabulous way of doing it.”

Cunningham said the timing of the interview played to Apple’s favor. It came as the stock suffered a sell-off last week, losing about $6 per share since last Monday after weak guidance from some suppliers. Share prices rose nearly 1 percent Monday.

Though fewer iPhone orders could have the potential to ding the company’s March quarterly earnings, hype for the iPhone 7 is just around the corner, Daryanani said.

“Anyone that can take a bigger view that’s longer than six months … you have to buy into the Apple story, you have to buy into the fact that this ecosystem is very powerful,” Daryanani said. “And Apple can monetize the ecosystem a lot more attractively than perhaps any other company right now can.”

Source: cnbc.com

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