COURSEY: Fiddling around with the tax code
Published: Tuesday, May 21, 2013 at 12:16 p.m.
Last Modified: Tuesday, May 21, 2013 at 12:16 p.m.
Did you ever hear the story about Nero fiddling while Rome burned?
Substitute “Congress” for Nero, and “America” for Rome, and you've got a pretty good idea of what's going on in our nation's capital.
The latest indication was splashed on Page 1 this morning in a New York Times story about how Apple – the world's most profitable tech company – has found “the holy grail of tax avoidance” to dodge paying billions and billions of taxes to the U.S. Treasury.
That's money that could be fixing our roads, caring for our elders, educating our children.
While its methods are complex, Apple has followed a simple plan: Move profits off-shore without actually moving employees, manufacturing or administration with them.
And, apparently, all of this is legal. Apple is not alone in its use of “gimmicks” and “schemes” allowed by the federal tax code; it's just the biggest and best-known of the many multi-national companies taking advantage of the law, the Times reported.
So how does this relate to Nero and Rome? Well, Congress is going after the Internal Revenue Service right now like a terrier goes after a rat. But is the fervor of our nation's lawmakers directed at dousing the fire that is our nation's convoluted tax code? No, they are tilting at the smoke that is wafting from the IRS's targeting of conservative groups for special scrutiny.
That mistake by certain employees of the IRS is certainly worth correcting, and the people who caused it should suffer the consequences. But Congress's zeal to pursue that issue – along with other “scandals” such as Benghazi and the repeated attempts to repeal Obamacare – represents mere fiddling in comparison to the nuts-and-bolts problems that fall by the wayside.
But wait, you say, isn't a Senate panel on this very day conducting a hearing on Apple's tax-avoidance schemes? Well, yes it is. But how long do you think it will take for the fiddling of politics to drown out the work of governance that needs to be done? A day? A week?
How about a half hour after the hearing began? That, according to live-blogging coverage provided by the Times this morning, is the delay between the start of the hearing and this Twitter posting by Sen. Rand Paul, R-Ky.:
“I am offended by a $4 trillion government bullying, berating and badgering one of America's greatest success stories,” Paul tweeted.
And off we go again. It's not about reforming an outdated an ineffective tax code. It's about bashing the other side at every partisan opportunity.
Apple CEO Tim Cook, to his credit, told the panel this morning that he doesn't feel bullied. But he also said his company doesn't use “gimmicks,” a statement that one expert testified caused this reaction: “I just about fell off my chair.”
Cook said the company welcomes a discussion about the U.S. corporate tax system, which “has not kept pace with the advent of the digital age and the rapidly changing global economy.”
That's a $9 billion understatement, according to committee chairman Sen. Carl Levin, who estimated that's the amount that Apple managed to keep from the U.S. Treasury in 2012 alone. What's “scary,” said one of the experts this morning, is that many companies are likely even more aggressive than Apple in dodging corporate taxes.
So, what should be done? That's fairly obvious. Sen. John McCain, R-Ariz., said it is past time for a “comprehensive reform” of the tax system. And even Senator Paul, who objected to highlighting Apple's tax schemes, tweeted, “If there is anyone to blame here it is not Apple, it is Congress and the tax code it created.”
But it will get fixed only if people like you and me hold Congress's feet to the fire. Because as long as they believe we prefer the sound of their partisan fiddling to the results of them actually solving the hard and complicated problems of America, that fire will just continue to burn.
Chris Coursey's blog offers a community commentary and forum, from issues of the day to the ingredients of life in Sonoma County.
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