Sharply Divided Senate Subcommittee at Apple Tax Hearing

Apple Execs TestifyThe US Senate’s Permanent Subcommittee for Investigations was sharply divided in its hearing into Apple’s tax practices today. In the current political climate, a committee is often divided along party lines – but this committee was divided between the leadership and the membership.

Subcommittee Chairman Levin and Ranking Republican McCain both were strong in their attacks on Apple’s global tax organization – calling it a “scheme,” saying that Apple used “tax gimmicks,” and similar characterizations.

The members of the subcommittee, both Democratic and Republican, were highly complimentary of the company built at Apple since its founding in 1979.  Senator McCaskill (D, Missouri) gushed that she “loved Apple” and said that she had “forced [her] husband to switch to a Macbook.”  Senator Paul (R, Kentucky) said that he was “embarrassed that the Senate had hauled Apple in” for the hearing.  He said that there should actually be a mirror at the witness table, because it is the Congress that has created the rules that give Apple incentives to structure itself in the ways that Senator Levin found so objectionable.

While the demeanor of Senators Levin and McCain was markedly different from that of the rest of the members, a difference in substance was also clear.  Senators Levin and McCain seemed to have already made up their minds about the points that they wanted to make in today’s hearing and were using the hearing as a platform.  The other members seemed to be genuinely reaching out to Apple CEO Tim Cook to ask how the US Tax system could be adjusted to make US companies more efficient and more competitive in the world.

Through it all, Tim Cook was unperturbed – serene even – at the witness table.  When Senators wanted to bluster and make speeches to the cameras, he quietly and patiently waited for them to finish.  When other Senators wanted to have constructive discussions about tax policies, he offered insightful ideas.  Today, more than any other single day, Tim Cook emerged from the shadow of Steve Jobs as a “rock star” CEO in his own right.

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2 responses to “Sharply Divided Senate Subcommittee at Apple Tax Hearing”

  1. Desireé Owen says :

    Tim was Alabama perfection today, as is your blog. : )

    • Graham Burnette says :

      It is hard to see how Tim could have been better. Peter seemed to get angry toward the end of the hearing when Senator Levin didn’t allow him to explain that the Cost Sharing Agreement did not transfer any IP from the US to Ireland – but rather that it set up a system by which the US parent company and the Irish subsidiary jointly funded the development of IP (so it was shared from the movement it was created). I think it is understandable for Peter to get angry, when Levin had the facts wrong and clearly was not interested in learning what the right facts are. But today really was not about facts. It was political theater – nothing more and nothing less.

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