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Tim Cook (AAPL) testifies at a Senate hearing on corporate offshore taxes. "We don't depend on...

Tim Cook (AAPL) testifies at a Senate hearing on corporate offshore taxes. "We don't depend on tax gimmicks," Cook asserts, while pushing for a big overhaul of U.S. corporate tax code. "Apple has always believed in the simple, not the complex." Sen. John McCain isn't satisfied with Apple's defenses, claiming the company "has violated the spirit of the law if not the letter of the law." Sen. Rand Paul has strongly defended Apple. "Congress should be on trial here for creating a byzantine tax code." (previous)
Comments (39)
  • this is the ninth time iCook open his mouth and the stock went down
    21 May 2013, 11:56 AM Reply Like
  • Stock was down before his panel started. It actually increased when they appeared. I'm not holding my breath until it's over based on history.
    21 May 2013, 12:03 PM Reply Like
  • And hereby I award the "dumbest comment of the day award" to - hahaha48.
    21 May 2013, 12:09 PM Reply Like
  • actually ever since Cook started speaking the stock has gone straight. Up $10 since he started speaking
    21 May 2013, 01:02 PM Reply Like
  • Here's what we learned today:

     

    AAPL is the largest tax payer in America. They paid 6 billion in taxes last year. So, if you are a patriotic American and you want to buy American then buy Apple products. If you want to buy a cheaply made smartphone that breaks in a fraction of the time, then buy a Samsung product.
    21 May 2013, 02:23 PM Reply Like
  • If you want to buy American then buy Apple products all made in china

     

    It is nice though that they pay some taxes.
    21 May 2013, 02:43 PM Reply Like
  • Very little of the $650 price for an iPhone is captured by China. The big cost/price items like the screen, the CPU, the software, the server infrastructure, the retailers, and so forth are all USA.

     

    The other parts are made all over place and much of the rest of the cost goes to raw materials... probably less that $10 of that $650 is captured by Chinese workers/companies.

     

    HTC, Samsung, Nokia, and even Blackberry has far lower USA captured cost. Even with Android, Google actually captures a much smaller part than you would expect.
    21 May 2013, 02:55 PM Reply Like
  • tech
    is there a break down from apple?
    21 May 2013, 02:58 PM Reply Like
  • Of course Apple does not provide the breakdown. However, look at iSuppli's preliminary breakdown:

     

    http://bit.ly/YEH8n1

     

    Right off the bat, the estimated $199 cost does not include software development, server infrastructure, warranty, marketing, and a myriad of other costs. Most of that expenditure and mark-up through to the $650 retail price is in the USA for product sold in the USA. We know that the processor ($17.50), while sourced from Samsung, is made in Texas. The screen ($44) is from Corning in the US. The back camera is made by Sony in Japan, the front camera is made by Omnivision which has locations all over the place. The memory/NAND flash ($20.80) are likely South Korean. The Qualcomm MDM9615 wireless section is mostly an American company (design, engineering, majority of the profit) but manufactured likely by TSMC in Taiwan

     

    The actual assembly cost is around $8 which is captured by Foxconn and is splashed all over the news as the "manufacturer" of the iPhone. This is similarly played out on any number of Apple's hardware products. As for software products, the vast majority of the software engineering, product design, marketing, and support expenditures are in the U.S. with some in Canada and Europe.

     

    Here is another view of the country breakdown:

     

    http://bit.ly/16QsjWV
    23 May 2013, 09:19 AM Reply Like
  • This is not Cook´s problem..its congress for writing such stupid laws..but hey..it gets them lots of political donations when they write these stupid rules....that is why its so complicated....each special interest donates to the politician they love that writes their way....
    21 May 2013, 12:02 PM Reply Like
  • Congress is like a daycare driving school , pretty hard be a good driver when you cant see over the dash.....Aapl lobbies considerably less than msft goog ..probably why they are on the hot seat...
    21 May 2013, 09:11 PM Reply Like
  • I hate our tax law/code so much I don't care if Apple is sheltering and avoiding taxes using loopholes good for them wish I could do it....

     

    screw congress and their ineptitude at realizing both corporate and public tax law needs a huge overhaul. Throw away the loopholes, write offs (except Charity),

     

    in the case of tax overhaul i'm of the opinion that we can't screw it up any-worse then it is now so just do anything that involves changing it.
    21 May 2013, 12:06 PM Reply Like
  • AAPL has to use everything allowed to increase share holder value. Change the laws if you have problems with the loop holes you have created dear senators. Don't blame AAPL, blame yourself.
    21 May 2013, 12:07 PM Reply Like
  • I never trust the reason given for these "political hearings". Most of the time they are no more than witch hunts done for personal profit by someone or some entity at the expense of someone or something they want to bring down. No different this time.
    21 May 2013, 12:18 PM Reply Like
  • If you bash Tim Cook because you jumped on a bash Tim Cook band wagon, that's pretty bad. If you're bashing him based on your own evaluation, you should put all of your money in a 0.7% money market.
    21 May 2013, 12:22 PM Reply Like
  • the day when people who produce things need to take permission from people who do not produce anything is the day of the doom
    Atlas shrugged
    21 May 2013, 12:22 PM Reply Like
  • John McCain is mad Apple isn't following the spirit of the law, even though they are following the letter of the law? If only there was some way he could influence the letter of the law....If Congress spent half as much time reforming the mess they'd made our tax as they do with these silly hearings we'd be in a much better place.
    21 May 2013, 12:26 PM Reply Like
  • Remember too, that Intel has a large fab in Arizona, and Apple isn't using Intel chips in its mobile products. There could be some political shenanigans going on as a result.
    21 May 2013, 06:14 PM Reply Like
  • AAPL has held up pretty good so far. Was expecting a big sell off with this news. You have the two most hated organization talking to each other today - Apple and Politicians. Paul is my newest favorite senator.
    21 May 2013, 12:51 PM Reply Like
  • Do you actually believe that Apple is as hated as the politicians...?
    never heard that one before...
    21 May 2013, 03:26 PM Reply Like
  • Sen. Rand Paul has strongly defended Apple. "Congress should be on trial here for creating a byzantine tax code." -- the voice of reason.
    21 May 2013, 12:53 PM Reply Like
  • Stock is now up and I know why. Tim Cook is handling himself quite well and his sincerity seems out of place in that room. I am proud that I own stock in that company....no matter what the outcome.
    21 May 2013, 01:03 PM Reply Like
  • Apple has every single base covered! They spend billions and billions of dollars to make sure that all of their finances are in order!
    21 May 2013, 01:10 PM Reply Like
  • McClown should know that the spirit of the law is its letter. I hope that Tim Cook can step up his act and turn the tables on the inquisitors.
    21 May 2013, 01:12 PM Reply Like
  • They apply confiscatory taxes , and then blame those that legally reduces their teases.

     

    Products made in china for apple sold to Chinese customers should not pay USA taxes. That is confiscatory. Corrupt government .
    21 May 2013, 02:04 PM Reply Like
  • Well people it's like this, for workers over seas putting money in there pockets building a great American product while Americans, look for work suffering a massive national debt load for a mega billion dollar company to pay a he'll of a lot less taxes is ridiculous. It's all about saving billions and the hell with American people! Think of out the big picture not just about where the stock is going.
    21 May 2013, 02:18 PM Reply Like
  • JackBaker: Fact is they should be paying more. They built that company with the help from taxpayers. If we're going to cut this deficit we need all of our companies to pay their fare share. If they don't like the tax code they need to use those billions to lobby congress, if guns, cigarettes and oil can do it, why can't Apple and others? You don't cheat the system because it's broke, you fix the system and it's companies like Apple that should be leading the charge not being sneaky and hiding profits in the freakin Cayman Islands or Ireland.
    21 May 2013, 02:41 PM Reply Like
  • Apple has simply followed the same path that 100th of top American companies have done.This IS the American way. Apple should not "led the way" in providing leadership in giving huge taxes to a government that just waste the collected taxes they receive & continues to increase our national debt.
    As an Apple stockholder, I only hope to see the non-American profit are used to expand the growth of the company. Please do not give anything extra to our government to waste!
    THE SYSTEM IS BROKE. APPLE IS NOT THE ONE TO FIX IT.
    21 May 2013, 03:47 PM Reply Like
  • I really do think they wanted TC to give them some free advice.....obvious they can't figure it out amongst themselves...
    21 May 2013, 10:18 PM Reply Like
  • Apple owes you nothing. You pay taxes to the government, not to Apple. And the less Apple's share, the fairer it is.
    22 May 2013, 09:38 AM Reply Like
  • And sadly it's that greed that is leading us into the depths of poverty. We no longer manufacture because it's cheaper overseas, we don't create new knowledge bases for our children, we farm out jobs through Visa to India, China etc.. They are doing this because we can't fix the system here. If we had those $$billions in tax dollars in our country instead of Ireland, Cayman's etc.. Maybe we could create a smarter work force that can compete in the world. Maybe we could allow our children to learn about manufacturing or trade labor so we can make it more affordable to build things in the US. The almighty dollar is great and I'm all for making money, but to state your stock is more important that holding these companies accountable for the money they make, and the taxes they owe, plus the benefits they are already getting in the face of hurting our future in this county is just wrong and the exact reason we're getting our butts whooped in the global economy
    23 May 2013, 01:20 PM Reply Like
  • Tim Cook owned that hearing
    21 May 2013, 04:14 PM Reply Like
  • Doesn't look like they are hiding anything.
    the fact is corporations should not be paying income taxes art all.
    They did not become successful because of the government but in spite of it.
    We the stockholders that investing in the company is what made it possible. When they tax or assess fees on a company they don't pay it, their customers trough higher prices and stock holders from lower dividends do.
    Why is government greed ok with you leftists?
    21 May 2013, 04:15 PM Reply Like
  • Yeah, that company you have stock in doesn't use our power, roads, police to help keep them safe, fire departments, teachers etc.. None of these jobs is paid what they should be getting, our teachers live near the poverty level because they love teaching and want to help our future. But people like you only think of the implications on a macro business level and don't take into consideration anything else but your stock prices. Government also provide a safe living environment for these companies employees to raise their families, one of the major considerations for a lot of people in the work force today. Another thing not taken into consideration when you look at taxes. Companies based in the US that are using US workers, roads etc.. should be held accountable for the profits they make. If they want to move to the Grand Caymans or Ireland great, then move. Don't give me this BS that its ok to shelter money through a PO Box.
    23 May 2013, 01:30 PM Reply Like
  • So if the product is assembled in China, and then sold in China, the US wants to tax it, because the company is headquartered in the U.S.
    Help me out what am I missing???
    22 May 2013, 12:20 AM Reply Like
  • Grandstanding politicians.
    22 May 2013, 01:32 AM Reply Like
  • Ron Paul rocks! Sounds like pop. We do need tax reform!
    22 May 2013, 01:38 AM Reply Like
  • Apple going to 1,000 share price in six months !!!!
    22 May 2013, 01:47 AM Reply Like
  • When they write an error in the law or a misprint or a single vs a plural word it is the law they go by until they change the law. It is spirit until it is converted to written legal language. How can one know what they meant to write if they write something else?
    Just pay your fair share
    22 May 2013, 02:02 AM Reply Like
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