Political Points Don’t Add Up to Tax Reform

We all know that it’s easy in Washington to make almost any issue political, including tax policy.  However, there is a clear difference in asking legitimate, tough questions in a political atmosphere versus asking politically charged questions under the guise of legitimacy.  Unfortunately we are about to see more of the latter from Michigan Senator Carl Levin when the former is what’s needed.

Tomorrow, Senator Levin will gavel in his own political sideshow, framed as a hearing on tax reforms but really a venture designed to embarrass Apple, a company that has a strong record of U.S. job creation and employs Americans and pays about $1 million an hour in state and federal income taxes. 

Senator Levin’s tactics aren’t new.  For several years now, he has sought to promote his own political agenda while trying to discredit many of America’s biggest employers and many of the world’s most innovative companies.

Let’s look at the facts with regard to Apple.  Apple may be the single largest taxpayer to the U.S. Treasury.  Last year alone, the company paid more than $6 billion in federal taxes, a rate of $16 million every day.  In determining its taxes, Apple works well within the laws established by Congress.  The IRS says so, as do outside tax experts. 

And, with innovation as its North Star, Apple has been a major job-creating force in the U.S.  The company is responsible for more than 307,000 American jobs.  In addition, Apple is a driver in the development of new products and industries that did not exist at the beginning of the century.  For example, the app revolution, which owes its enormous success in part to Apple’s iPhone and iOS mobile platform, has added nearly 300,000 jobs to the U.S. economy.

Apple’s achievements -- like that of much of the tech sector -- should be celebrated and emulated.  They are a case study of innovative success in the global 21st century marketplace.

Yet, at his hearing on Tuesday, Senator Levin will shun those facts in favor of practices that are the result of a broken, antiquated U.S. tax code.

Without question, the U.S. tax code fails to serve our national interest.  It does not meet the demands of this century’s ultra-competitive global marketplace.  And, as a result, it is costing America new investments, new businesses, and new jobs.  None of this is surprising, since the core of the tax code was put in place in 1986 and has not had any major revisions in the ensuing years. 

There is a bipartisan tax reform effort underway, led by Republican House Ways and Means Committee Chairman Dave Camp and Democratic Senate Finance Committee Chairman Max Baucus.  Together, they’ve held more than 50 hearings and dedicated thousands of hours of testimony, examination, and analysis on not only what’s wrong with the U.S. tax code, but also on solutions to fix it. 

On NBC’s Meet the Press yesterday, Chairman Camp told host David Gregory, “The tax code is broken.  It’s not fair.  It’s inefficient.  It’s so complex . . .  [W]e’re working together.  We've had the first hearings together in more than 70 years.  I think a more efficient and flatter and fairer tax code would help the economy and help people get the work they need and also maybe get higher wages if they're already working.” 

That’s what bipartisan collaboration and cooperation can do.  That’s what a commitment to a modern, competitive, market-based tax code can offer. 

The tech sector is committed to working with lawmakers to fix what’s broken and to strengthen the U.S. economy. 

The nation needs a smarter tax code.  We need more jobs and new investments.  But what none of us do not need if we are to succeed are political stunts that place short-term political agenda ahead of America’s long-term economic needs.  Let’s drop political theatrics and sign up for bipartisan leadership to advance our nation’s best interests.

Public Policy Tags: Tax Policy

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