Apple’s offshore tax strategies, combined with Tim Cook’s testimony before a Senate subcommittee on Tuesday, has drawn the ire of Joe Nocera of the New York Times. In his column on the newspaper’s Op-Ed page, he goes as far as calling Tim Cook a liar.
As Philip Elmer-DeWitt of Fortune recalls, Joe Nocera has a long history with Apple. Lately he has made it “his business to be the fiercest critic of what he sees as shady business dealings at the company’s highest levels.”
Nocera accuses Tim Cook of telling a “whopper” and a “flat-out lie” while under oath. He backs up his claims with several documents and news articles. But according to Elmer-DeWitt, he is probably wrong.
Here are some highlights of what Nocera thinks about Tim Cook’s testimony:
Even though the company appears to pay about 10 percent of its pretax income in taxes — when the federal corporate tax rate is 35 percent — Cook said, “We pay all the taxes we owe — every single dollar.” He added that Apple had never shifted any of its American profits to an offshore tax haven when, in fact, that is basically what it has done, routing tens of billions in pretax profits to a shell corporation in Ireland that exists solely to avoid taxes in the United States. He even said that the low taxes Apple pays overseas is on the profits of its overseas sales. Not to put too fine a point on it, but this was a flat-out lie.
Here is another whopper from Mr. Cook on Tuesday. He said that his company not only doesn’t violate the letter of the law, that it doesn’t even violate the spirit. He may be right on the first part, but he is wrong on the second.
Question for the government of Ireland: Do you really want your country to be known as an offshore tax haven? Indeed, at a time when your citizens are dealing with the pain of an austerity program, how can you justify allowing Apple to pay virtually no taxes on a subsidiary established solely to avoid taxes in the United States? Just wondering. [The Irish government denies these claims. You can read about this here. ]
In fact, the essence of Nocera’s relationship with Apple can be captured in a phone call he had with Steve Jobs back in 2008, according to Elmer-DeWitt:
“This is Steve Jobs,” [Jobs] began. “You think I’m an arrogant [expletive] who thinks he’s above the law, and I think you’re a slime bucket who gets most of his facts wrong.”