As Apple CEO Tim Cook prepares to defend himself and his company this week for avoiding billions of dollars in taxes, ex-American Express CEO Harvey Golub argues that corporate tax rates should be lowered from 35 percent to zero.
"Corporate tax rates ought to be zero," he said in a recent interview. "Corporations should pay no taxes..."
Apple holds many offices around the world; in the past three years, only 2 percent of the company's $74 billion income was taken by way of U.S. corporate income tax. However, Cook says his company still pays “an extraordinary amount” in taxes each year.
The sudden addressing of Apple’s tax strategy comes as Washington debates on how to raise revenue in order to decrease the federal deficit.
While Democrats say profits abroad are tax evasive and aren’t beneficial to the country, Republicans argue that the current tax rate is burdensome and scares companies into doing oversees business. Cutting or reducing the corporate tax rate could bring business back, they suggest.
The Corporate Offshore Income Deferral, which Apple is evidently relying on, allows corporations to defer government payments until profits are brought back to the United States. In early February, the Joint Committee on Taxation proposed the Corporate Tax Fairness Act, which challenges the deferral. According to Independent Senate member Bernie Sanders, the bill would end profit sheltering and tax breaks for companies that ship jobs and factories oversees.
The bill failed to pass through an inner committee.