Apple’s CEO is headed to Washington next week to talk taxes. He’s not just going to be defending Apple’s practice of keeping billions of profits offshore, Tim Cook is going to be armed with some suggestions for future policies too. And no, he doesn’t think Apple should get a free pass on bringing its money back home.
Cook told the Washington Post that he has ideas for how to help convince companies like his own to bring back their overseas earnings to the U.S.:
“If you look at it today, to repatriate cash to the U.S., you need to pay 35 percent of that cash. And that is a very high number,” Cook said in an interview Thursday. “We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable.”
Apple is set to pay $7 billion in taxes in the U.S. this year, he told the paper. He also said he believes that Apple is “likely the largest corporate taxpayer in the U.S.”
But the company has — along with a lot of its peers — found creative ways to make sure that number is not any higher. Apple has $145 billion in its coffers, and $100 billion of that is from profits derived from sales overseas. But the company has not brought that money back to the U.S. because of the current corporate tax rate. Even when the company decided to issue a larger dividend for shareholders, Apple elected to borrow money rather than use profits from overseas to fund that, partly because of the tax burden.
This will be Cook’s first testimony before Congress, but not his first trip to Washington in an official capacity. A year ago he visited with House Speaker John Boehner, signaling his interest in engagement with Washington and public policy would be somewhat of a departure from his predecessor’s.
Cook also told the Post Apple believes “in good corporate citizenship.” And he has made some good U.S. corporate citizen moves since becoming CEO. In addition to instituting a charitable-giving matching program for employees, he’s also laid out plans to bring production back to the U.S. of one model of Mac. Cook told Politico that it would be an existing product that will be made here. Not only will it be put together in the U.S., he said some of the parts would be manufactured in Arizona, Texas, Illinois, Florida and Kentucky.