Imagine (or remember) the following scenario: your accountant calls you up and says that you have missed a deduction on your income tax and you ought to pay 500 dollars less than you thought.
Of course, because you’re a good person you immediately reply, “No, I don’t want to minimize my payments to the IRS. I want to send them more money than I have to.”
Does that sound right?
Thus Rand Paul spoke in front of his colleagues in the Senate:
“Tell me one of these politicians up here that doesn’t minimize their taxes. Tell me a chief financial officer that you would hire if he didn’t try to minimize your taxes legally. Tell me what Apple has done that is illegal.”
Did anyone have an answer for Senator Paul? Did anyone even bother to listen to his questions? He also pointed out that the US government has hurt the US economy, not Apple.
“I frankly think the Committee should apologize to Apple. I frankly think Congress should be on trial here for creating a bizarre and byzantine tax code that runs into the tens of thousands of pages, for creating a tax code that simply doesn’t compete with the rest of the world. This committee will admit: Apple has not broken any laws. Yet, they are forced into a show trial at the whims of politicians, when in fact; Congress should be on trial for chasing the profits of great American companies overseas. You haul before this committee one of America’s greatest success stories and you want applause?”
What is most disgusting to conservatives is that Rand Paul is not attacking Democrats or official “Liberals” when he speaks these words. He is defending Apple from a bipartisan Senate Committee, the Homeland Security and Governmental Affairs Subcommittee.
People act as if corporations are greedy to reduce their tax burden, but they never think of the government employees as greedy when they berate corporations for being greedy. The fact is that, since every corporation is trying to reduce its tax burden as much as legally possible, any corporation that does not do so is at a competitive disadvantage. They will not last in the marketplace. Furthermore, while corporations cannot afford the competitive disadvantage of paying more than they owe, they do not personally lose money by paying the taxes that every other corporation has to pay. Rather, they simply pass on that cost to consumers. Consumers are the ones who pay these corporate tax rates. And when Apple or another company reduces the amount of money they are required to pay the government, they are keeping prices lower for consumers.
The only real affect taxes have on the business world is not the rate, but the compliance costs of what Rand Paul called a “bizarre and byzantine tax code that runs into the tens of thousands of pages.” That complexity means corporations have to hire experts just to figure out how much they owe and to defend it with the tax authorities when questioned. Big companies that have been around awhile have a real advantage here over startups. Compliance costs consume a lower percentage of their resources than for a newer and smaller company.
If Congress wanted Apple to keep their money active in the United States, they could do so easily. Simply lower the corporate tax rate to zero. Taxing corporations is just another tax on individual consumers that piles on top of sales tax and income tax.