Apple’s extraordinary growth that would take it to the top of the global technology industry was undeniably overstated – everything seemed to go on behind the scenes, out of view and just as Apple likes it. However, a recent twist of fate has now propelled the Cupertino company directly into the spotlight as the center-focus of a national inquiry into US business taxation.
This week saw the Senate Permanent Subcommittee bring in Apple CEO Tim Cook in order to clarify his and the company’s stance on various accusations of massive tax avoidance. And not only did Cook go on record to reaffirm his stance as a law-abiding businessman of the highest order, he also used this highest-profile soapbox to make the call for a sweeping corporate tax reform for US businesses.
This is something of a 180 for Apple which on the whole seems to prefer allowing the likes of Microsoft and Google take the spotlight in Washington.
Apple is facing a pretty sticky situation as while what’s going on in Washington will only add further woes to the company’s slowing sales, falling stock prices and endless controversy regarding working standard in the Far East, chances are this is one debate they’re not going to be able to hide away from. They’re in the thick of it already and that looks like where they’re going to stay.
One of Apple’s recent legislative backings has been that of a proposal whereby US companies with significant cash sums in profits overseas would be able to bring them back to America without being charged the usual 35% tax rate. Though unsuccessful so far, the proposed legislation is one of the most universal and growing points of contention by US businesses with a combined offshore cash pool of $1.5 trillion they refuse to bring home as it stands.
Apple has even chosen to borrow money at lower rates of interest when needed as a preferable alternative to using its own $100 billion on foreign shores and face a 35% tax bill.
No official comment has yet been offered by any of Apple’s office on the subject.
Apple’s lobbying expenditure over the course of the last ten years has been massively lower than its rivals, while the firm has on more than one occasion turned down the opportunity to join other tech firms in their calls and battles to better the industry. All in all, Apple has chosen to keep a low profile.
In 2012, their spending on lobbying was in the region of $2 million, which although a marked increase from the $180,000 recorded in 1999 is still way behind the likes of Google and Microsoft who last year spent $16.5 million and $8.1 million respectively.
Judging by recent event and the long political road ahead for Apple as it grapples with its taxation headache, analysts expect the company’s spending on lobbying to increase perhaps two or even three-fold by the end of the year.