The Audacity Of Apple's "Ingenuity" (Demo)

By Gary Reber Uncategorized May 23, 2013

On May 23, 2013, Thom Hartmann on his show stated:

This week, Apple CEO Tim Cook was questioned in a Congressional Hearing about his company’s complex scheme to avoid paying taxes. According to Mr. Cook, the company’s stash of billions of dollars in overseas shell corporations was not tax dodging – it was ingenuity. And, just in case anyone actually fell for the tech company’s creative explanation, Mark Gongloff of the Huffington Post shared an incredible chart, which illustrates exactly how unjust our nation’s tax system has really become.

The chart was produced by the Senate Permanent Subcommittee on Investigations, and it shows how the sources of federal revenue have changed over several decades. In 1950, corporations contributed over 30 percent to our nation’s revenue, and individual income and payroll taxes made up about 45 percent. But today, corporations only contribute 17 percent, and individuals are paying for over 60 percent of federal revenue.

So, despite all the Republican claims about the U.S. having the world’s highest tax rate – corporations are contributing less to our nation than ever before. Yet, corporate executives like Tim Cook have the audacity to say we should be celebrating their “ingenuity.” These companies make the huge profits they have been raking in by using the commons that our tax dollars develop and maintain.

Without roads and bridges, communications systems and utilities, corporations couldn’t get their products into the hands of hard-working Americans. They should be paying for the privilege to do business here. American tax payers should not be picking up a larger share of the tab, while corporate executives hold on to an ever-increasing share of the profits. Let’s tell companies like Apple that we’ll celebrate their ingenuity just as soon as they start paying their fair share.

If you look objectively at the operations of Apple Inc. and other large tech companies, one will realize that the number one capital asset their stockowners own is intangible intellectual property––namely patents. As well, an analysis of the ownership of Apple Inc. and others would reveal that a relative few own the bulk of the company, with the exception that those in the highest employed positions receive stock portfolios as part of the compensation package. Then too there are millions of Americans who have invested their savings to purchase secondary Apple stock on the stock exchanges. But the reality is that the majority of this non-inner circle ownership class’ holdings are relatively small in comparison. Also significant, is the fact that the company retains the bulk of the profits and does not pay near the dividend income owed the stockowners.

CEO Tim Cook tries to portray Apple Inc. as a company “bound by lofty ideals, a strong moral compass and a recognition of its impact on the world,” yet the company uses slave-labor workers employed by FoxConn in China to build their products, and the vast employed majority outside manufacturing to sell and service their products, all at relatively low-pay compared to the executive class and the scientists and engineers who are encouraged to work to destroy employment by making the capital owners of the company more productive by increasing the stock value of their holdings. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks.

If Cook wanted to really have a positive impact on the world he would lead his Board of Directors to finance future growth of Apple Inc. using an Employee Stock Ownership Plan (ESOP) and enable ALL the employees of Apple to become future stock owners and pay for their acquisition out of the tax-free future corporate earnings of the growth investments. Instead the company uses retained earnings financing or debt financing to further concentrate the stock holdings and profits of the existing ownership class, and other measures to “legally” escape paying taxes on the profits generated.

If the United States Congress wanted to shine a spotlight on Apple Inc. as an exemplar of a system that is producing nonsensical results, then there needs to be pressure put on the Senate Finance Committee to write more sensible legislation that avoids the negative tax consequences of encouraging more concentrated ownership of the FUTURE productive capital assets as the purpose of economic growth, and connect EVERY American as an owner so that they can participate in the production of products and services beyond that of declining job opportunities and welfare substance.

Such goals and policies are the subject of my article “The Path To Sustainable Economic Growth” at http://www.huffingtonpost.com/gary-reber/sustainable-economic-growth_b_3141721.html and the article entitled “The Solution To America’s Economic Decline” at http://www.nationofchange.org/solution-america-s-economic-decline-1367588690

http://www.thomhartmann.com/blog/2013/05/audacity-apples-ingenuity

The Audacity Of Apple's "Ingenuity" (Demo)

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