Nobel economist Joseph Stiglitz, who backs Hillary Clinton's economic plan, said tha the U.S. tax law that allows Apple Inc. to hold a large amount of cash abroad is "obviously deficient" and called the company's attribution of significant earnings to a comparatively small overseas unit a "fraud."
When you listen to Mr. Stiglitz you clearly see that Clinton and the Democratic party really are out for Apple's throat if they get elected. Make no mistake about it. So all of this fear from Silicon Valley over Trump and Apple is a joke compared to the Democrats view of Apple.
Commentary by Stiglitz in the Bloomberg interview ties straight back to angry commentary made by House Minority Speaker Nancy Pelosi kicking Apple and Steve Jobs. Mr. Stiglitz comes right out and says that what Apple is doing in Ireland is fraud plain and simple.
Stiglitz, who advises Hillary Clinton's presidential campaign, said in a Bloomberg Television interview with Tom Keene that "Our current tax system encourages companies to keep their money abroad, opens up a vast loophole through what is called the transfer-pricing system that allows them not only to keep their money abroad but, effectively, to escape taxation."
Stiglitz was speaking in response to a question about whether policy makers like Clinton and Senator Elizabeth Warren, a Democrat from Massachusetts, could develop a plan to encourage companies like Apple to bring their accumulated foreign earnings back to the U.S. Under current law, companies can defer U.S. income tax on their foreign earnings until they repatriate them, or return them to the U.S.
About $215 billion of Apple's total $232 billion in cash is held outside of the country, third-quarter earnings results showed this week.
Apple is making use of existing gaps in the U.S. tax system to shift its U.S. taxable earnings overseas to low-tax Ireland. Proposed U.S. Treasury regulations are aimed at curbing so-called earnings stripping, and European tax regulators are examining the company's tax practices.
"Here we have the largest corporation in capitalization not only in America, but in the world, bigger than GM was at its peak, and claiming that most of its profits originate from about a few hundred people working in Ireland -- that's a fraud," Stiglitz said. "A tax law that encourages American firms to keep jobs abroad is wrong, and I think we can get a consensus in America to get that changed."
The segment of the video about Apple worth noting is at the bottom of the Bloomberg report which begins at the 3:07 mark.
In February, Patently Apple posted a report titled "U.S. Treasury Secretary Calls on the EU Commission to Reconsider their Tax Probes targeting U.S. Companies," followed by a report in March titled "U.S. Treasury Investigates Retaliatory Measures against the EU's Aggressive Investigation of Apple & Others."
Perhaps the U.S. Treasury Secretary should pay Mr. Stiglitz and Hillary Clinton a visit to get them to tone their rhetoric about Apple. How can you blame the EU's commissioner taking a hard stance against Apple when the Democrats hold the very same view and want to score political points in an election year!
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Another video on Mr. Stiglitz view of Apple: In May 2015, Columbia University Business School Professor and Nobel Prize Laureate Joseph Stiglitz discussed global income inequality and what he would do differently at Apple.