Why are we publicly browbeating an iconic U.S. firm in an era in which we should be encouraging every innovative company to locate and expand high-value work in America? What kind of message do hearings like this send to firms overseas (or U.S.-based multinationals weighing their capital plans) about America being open for business and hungry for job-creating investment?
Once upon a time, Democratic senators like Paul Tsongas of Massachusetts wisely quipped that “you cannot love employment and hate employers.”
But common sense has given way to easy grandstanding.
Carl Levin thundered that Apple’s tax avoidance causes “real harm.” (Put aside that Apple may pay more taxes than any company in the country.)
John McCain — who owns so many homes he’s lost track, thanks to his wealthy father-in-law’s shrewd management of his business affairs, including, presumably, taxes — couldn’t wait to jump in. In high McCain dudgeon, he called Apple’s tax strategies “complicated and pernicious.”
Complicated? What tax strategy isn’t? But pernicious?
Where to start?
First, Cook and his colleagues have a fiduciary duty to minimize Apple’s taxes under the law. The ways and means may be arcane and look fishy to the untutored eye, but Apple didn’t make the rules, it’s playing by them. What pension fund that owns Apple shares would cheer its bosses for paying more in taxes than the company legally owed?
The real scandal isn’t Apple’s planning but the enormous waste of human talent now dedicated to shrinking corporate America’s tab because of the complexity of the tax code. Brilliant minds that might have invented new products or services, or even pursued humbler vocations (such as gardening) that improve the human condition, end up marinating for decades in byzantine fusses over “transfer pricing,” “income-shifting” and “deferral.”
I knew some of these folks back in law school. The students drawn to tax law were among the smartest. They loved intellectual puzzles. They’re now paid exceedingly well to crack them. I still feel a little sad for them, though. Who wants to contemplate a deathbed realization that the talent you possessed in your one life on Earth had been given over to reducing corporate tax liabilities? (By the way, it’s not clear that a columnist’s deathbed reckoning will be any less laced with feelings of futility and regret, but that’s therapy for another day.)
The confusion many senators felt about their role in the spectacle accounts for the weird verbal zigzags on display. If lawmakers grunted in monosyllables like Tarzan, they’d have thumped their chests and said, “Apple good, Apple taxes bad.” Sen. Claire McCaskill’s oozing protestation — “I love Apple! I love Apple!” — only made her half-hearted attempt to plunge the shiv in more vexing.