The Tax Policy Center has a gentle reminder for you after the Senate’s little anti-Apple tax circus the other day:
Because Apple is so profitable, the dollars involved will certainly attract attention (this is a Senate committee after all, so that is the point). The report alleges Apple reduced its U.S. corporate income tax by an average of $10 billion-a-year for the past four years. Since the corporate levy generated only about $240 billion in 2012, $10 billion foregone from one company is a very big number indeed.
But while it added a few interesting twists, Apple cut its taxes with the same tools multinationals have been using for years to minimize their worldwide tax liability. And if there is a scandal, I suppose it is the very ordinariness of these transactions. Apple’s tax avoidance shop, it seems, is a lot less innovative than its phone designers.
Again, this goes to something we’ve talked about a time or two in the last few weeks, and that’s the undue attention given to finance. Tax avoidance is a part of that.
Apple is a smart company, devoting its best brains to producing insanely great products — not to complicated tax avoidance schemes. How many more great brains could how many more great companies hire to create great products, if so many of those great brains weren’t being half-squandered on things like gaming the tax code and credit default swaps?
This is a real problem, and it’s a natural outgrowth of many bad public policy decisions. Good on Apple for doing the right thing, and bad on government for making Apple the exception.