Linked by Thom Holwerda on Thu 1st Sep 2016 22:42 UTC

Matt Gardner, the director of the Institute on Taxation and Economic Policy, took a look at Tim Cook's terrible letter to EU consumers regarding Apple's tax evasion, and pretty much tears it to shreds.

Apple created a complicated web of subsidiaries to avoid taxes, and the Irish government allowed it. Both the company and the country were complicit in this agreement. The idea that Ireland gave Apple guidance on "how to comply correctly with Irish tax law" makes both parties sound less guilty than they are. A better characterization would be that Apple cooked up a tax-dodging scheme, and Ireland allowed it.

Further along, Gardner actually opens up a major can of worms, arguing that either Apple provided false figures in its annual report, or Tim Cook is lying in his letter to EU consumers:

It doesn't appear to be even remotely truthful based on the numbers they publish in their annual reports. Each year they report that the majority of their profits are earned outside the U.S., with roughly a third (on average, over the past five years) coming from the U.S. When you look at the 10K, the annual report for 2015, you see the company reports earnings of $72 billion worldwide, and just one third of those profits are attributed to the U.S. And yet Cook's statement says that the vast majority of their income is taxed in the U.S.

We think that is a very low estimate. It certainly appears that the company is shifting profits out of the U.S. and into tax havens overseas. So one of these things must not be true: Either the numbers presented to shareholders in their annual report are false, or Tim Cook's new statement that the majority of its profits are taxed in the U.S is false. They both can't be true.

That's a bold claim to make, but it's hard, if not impossible, to argue with Gardner on this one. Since it's incredibly unlikely Apple is falsifying its annual reports, the most logical conclusion is that Tim Cook is lying in the open letter.

Tim - if you find yourself in a hole, stop digging.

Permalink for comment 633813
To read all comments associated with this story, please click here.
RE: tax expert?
by avgalen on Fri 2nd Sep 2016 11:59 UTC in reply to "tax expert?"
Member since:

Matt Gardner is a lobbyist for a small Left Wing think tank. I'll take his 'expertise' with a very large grain of salt.

You will take his expertise with a very large grain of salt? Of course I have no idea who this guy is but from the very link you posted he does come across as a major expert:
Matthew Gardner is the Executive Director of ITEP. His work focuses on state and local tax systems and their effect on low- and middle-income taxpayers. Mr. Gardner is an author of Who Pays: A Distributional Analysis of the Tax Systems in All 50 States (2003, 2009, 2013, and 2015 editions)), and has authored a number of comprehensive studies of specific states' tax systems, including Achieving Adequacy: Tax Options for New York in the Wake of the CFE Case (2005), Tax Options for Arkansas: Funding Education After the Lake View Case (2003), Balancing Act: Tax Reform Options for Illinois (2002), and Choices for Iowa: Building a Better Tax System (1998).

Gardner is also the primary author of The ITEP Guide to Fair State and Local Taxes (2005 and 2011), a primer designed to teach lawmakers and advocates the fundamentals of state and local tax policy. Other studies by Mr. Gardner include Tax Simplification Options for Iowa (2003), A Plan for Progressive Tax Reform in Alabama (2000), Revenue-Raising Options for Louisiana (2000), and An Analysis of a Nevada Business Profits Tax (1999). Mr. Gardner has conducted tax analyses for state and local policymakers and advocates in over 45 states.

Mr. Gardner has degrees from the University of Maryland and the University of Rochester. He resides in Washington, D.C. and originally hails from Raleigh, North Carolina
(I always find it strange when somebody says he has a degree, but not what study the degree was for)

Apple and the Irish government both would have obtained the best legal advice available before setting up the tax plan. So the 'illegality' is most likely in the mind of some petty EU bureaucrat wanting five minutes of fame.

Yes, Apple and the Irish government have the best legal advice, but the petty EU doesn't. Of course this is just the mindfart of 1 petty EU bureaucrat ;) . Do you know what bias and hypocrisy mean?

Maybe you could actually not try to smear this guy but react to the statement in the article:
So one of these things must not be true: Either the numbers presented to shareholders in their annual report are false, or Tim Cook's new statement that the majority of its profits are taxed in the U.S is false. They both can't be true.

Edited 2016-09-02 12:00 UTC

Reply Parent Score: 4