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Posted at 02:50 PM ET, 05/21/2013

Apple CEO Tim Cook says U.S. should lower corporate tax rate

Tim Cook, chief executive of Apple Inc., testified Tuesday before the Senate Permanent Subcommittee on Investigations. (Andrew Harrer - BLOOMBERG)

Apple chief executive Tim Cook told a Senate panel Tuesday that the U.S. tax code needs a dramatic overhaul with the overall corporate tax rate, currently at 35 percent, falling to about 20 percent.

Testifying before the before the Permanent Subcommittee on Investigations, Cook said the high tax rate has prevented companies from repatriating their massive cash holdings overseas. So, he proposed a tax rate of below 10 percent on those offshore funds.

 “The rate on bringing back foreign earnings, to incent huge number of companies, would have to be a single-digit number,” Cook said. But he said that wouldn’t mean Apple would get any special treatment. “By doing that, we would wind up in a revenue-neutral area. Some companies would pay more; we would be one of them.”

Cook and two other top Apple officials came to Capitol Hill to face questions about the tech giant’s overseas tax practices. Some lawmakers believe Apple and other multinational corporations’ use of legal loopholes in the tax code may be giving them an unfair advantage over smaller, domestic companies.

Sen. Carl Levin, the chairman of the subcommittee, one of Apple’s toughest critics, challenged Cook and the other executives by asking whether Apple would bring back the cash reserves it holds overseas if the United States lowered the tax rate on repatriation. Apple executives have said the company has no current plans to repatriate the reserves under the current rate.

Levin also said that Apple should not “kid us" about the impact that its decision to set up subsidiaries in Ireland has on U.S. tax revenue, closing by saying that what Apple is doing is “not right.”

By  |  02:50 PM ET, 05/21/2013

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