James F. McDonough
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Apple executive Tim Cook was called to testify before Congress on May 21, 2013 regarding its use of Irish subsidiaries and the tax savings that resulted. My initial thought was that, in his opening statement, Mr. Cook should have quoted the distinguished jurist; however, I suspect Apple’s public relations department would have advised him otherwise.
What is missing from the coverage of his testimony is the reality of business. Apple competes against foreign corporations that engage in similar types of planning. Mr. Cook has a duty to Apple shareholders to maximize shareholder value which requires minimizing taxes. What is missing from the coverage is that not every country taxes its corporations on a worldwide basis. Some countries tax corporations only if they are managed and controlled in that particular jurisdiction. If Congress wants to change this result, then it must add a few more provisions to the Internal Revenue Code.
If we are the land of the free, perhaps we should remind ourselves of Justice Hand’s words:
Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.
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