And here, with less mirth, making the same point is Joe Nocera writing in the The New York Times … Here Comes the Sun
Indeed, Apple’s fabulous success over the past decade or so — its creation of the iPads and iPhones that the world lusts over — is a large part of the reason it always gets the benefit of the doubt, whether deserved or not. Two years ago, when David Kocieniewski of The Times reported on General Electric’s tax-avoidance prowess, a storm of protest resulted. Last year, however, when Kocieniewski and Charles Duhigg wrote about Apple’s tax avoidance schemes as part of a series about the company that won a Pulitzer Prize, it was greeted mainly with yawns. Nobody really wants to hear anything bad about Apple.
Yet as documented both by The Times and the Senate subcommittee, Apple is as much an innovator in tax avoidance as it is in technology. Take, for instance, a scheme known as The Double Irish, which it largely invented and which many American companies have since replicated. This strategy, which was the primary focus of Tuesday’s hearing, involves setting up a shell subsidiary in an offshore tax haven — a k a Ireland — and transferring most of Apple’s intellectual property rights to the dummy subsidiary. The subsidiary, in turn, charges “royalties” that allows it to capture billions of dollars in what otherwise would be taxable profits in the United States. In Ireland, according to Apple, it pays an astonishing 2 percent in taxes, thanks to a deal it has with the government. (The Irish government denies giving Apple a special deal.)
Update: Joe Nocera is well-known among some (not just fan boys) as a harsh Apple critic.
See this from By Philip Elmer-DeWitt at CNN Money…
Joe Nocera does it again
On the New York Times Op-Ed page he calls Apple CEO Tim Cook a liar.
FORTUNE — I met Joe Nocera once, and he seemed like a nice guy. Over his long career as a business journalist — including more than a decade at Fortune — he’s done some first-rate work on Apple (AAPL). “The Second Coming of Steve Jobs,” a profile for Esquire of the entrepreneur at age 31, may be the best close-up portrait of Jobs that anybody has written, before or since. And two days after Jobs resigned in 2011 he wrote a lovely farewell column that was especially gracious, given their past history.
But Nocera has also made it his business to be the fiercest critic of what he sees as shady business dealings at the company’s highest levels — first with backdated options that led to resignation of Apple’s general counsel and the retirement of its former CFO (but not, to Nocera’s evident dismay, an SEC complaint against Jobs himself), and now with the offshore tax strategies that brought Jobs’ successor, Tim Cook, before a Senate subcommittee on Tuesday.
I happen to agree with one of the points Nocera makes in his New York Times op-ed column Thursday. There is something about sending tens of billions of dollars to a holding company that has tax residency in no country on earth that seems to violate the spirit of the law — despite Cook’s assertion to the contrary.
But what will be remembered about Nocera’s latest Apple column is that he called Tim Cook a liar — accusing him of telling, under oath, a “whopper” and a “flat-out lie”.
Nocera implies, but doesn’t actually say, that he makes those charges after watching Cook’s testimony.
I watched Cook’s testimony — twice. I find it hard to believe that Nocera saw any of it. And having read the documents and news articles he cites, I believe that on the points with which he has factual disagreements with Cook, he’s provably wrong. …
Read on: http://tech.fortune.cnn.com/2013/05/23/apple-nocera-cook-taxes/