D.C. Inquisition: Rand Paul lays blame at Congress’ feet


Kevin Glass of Townhall.com has this story of how following the law can still land you in trouble with Congress:

A bipartisan Congressional panel yesterday released its findings regarding Apple’s international tax regime and, specifically, how it was able to pay a relatively low tax rate when the U.S. corporate statutory tax rate is 35% (the highest in the developed world). The investigation turned up no wrongdoing, and that Apple follows the letter of the law and pays every dime of its legally-required taxes.

Senator Rand Paul (R-KY) minced no words in calling out Congress for its hypocrisy in investigating Apple (see his statement in full here):

Nonetheless, Congress summoned Apple CEO Tim Cook in front of the Senate Permanent Subcommittee on Investigations to testify on Apple’s tax compliance….

Sen. Rand Paul, who is not the chair or ranking member of this morning’s committee, offered an unconventional opening statement for the record. “Frankly, I’m offended by the tone and tenor of this hearing,” Sen. Paul Said. “Tell me a politician up here that doesn’t try to minimize their taxes… Instead of Apple executives, we should have brought in here a giant mirror.”

“I frankly think that the committee should apologize to Apple,” Paul said.

Sen. Paul said that he was also “offended by the spectacle of dragging in executives that aren’t doing anything illegal,” a framing that subcommittee chairman Carl Levin (D-Mich.) took issue with.

“We did not drag them in front of this subcommittee,” Levin said. “This subcommittee is not going to apologize to Apple.”

So let’s get this straight:

  1. Congress has provided U.S. corporations the highest corporate tax in the industrialized world.
  2. In order to please various constituencies, Congress then enacted loophole after loophole to bring the net corporate tax rate down for favored companies.
  3. Apple took advantage of the loopholes Congress passed.
  4. Apple did not break any laws, yet Congress targeted them.
  5. Based on statements made by members of Congress, Apple was likely targeted because of their size and success.

The implications here are absolutely chilling. If you’re successful, you’ll get punished. If you successfully navigate the laws Congress put into place, you’ll get punished. And yet, as Senator Paul noted, the subcommittee is not discussing reformation of the tax code. Instead, it is going after Apple in a witch hunt.

Regarding accusations that Apple isn’t paying enough in taxes, consider that the company claims to have directly or indirectly created over 500,000 jobs in the country, though one critic says the number is between 300,000 and 400,000. According to NPR, the company has 47,000 direct employees.

In other words, the company follows all relevant tax laws, and provides somewhere between tens of thousands and hundreds of thousands of jobs worth of economic activity. Sounds like its benefits are pretty good for America, and far outweigh those of Senator Levin and his subcommittee.

Again, to paraphrase Senator Paul, Congress could be looking at tax reform, which would eliminate many of the loopholes Apple and other companies use to lower their tax burden (Huffington Post reports Apple paid 2% in corporate taxes last year) while lowering overall rates. Congress could also look at eliminating regulations in order to encourage Apple and other countries to bring more business back to America.


Instead, the Beltway politicians would rather publically skewer companies,  rather than offering them incentive to do business in America. No wonder our economy is suffering.