Thursday, May 23, 2013, 07:03 am PT (10:03 am ET)
Apple on pace to double lobbying spending on taxes, other issuesEmbroiled in controversy over alleged tax avoidance, Apple is jumping into the fray in Washington, as the iPad maker is reportedly on track to double the amount of money it spends lobbying politicians.
Apple could spend $4 million lobbying politicians on the Hill, twice what the company spent last year and more than 20 times the $180,000 it spent in 1999, according to Reuters. The bump in lobbying spending comes with the iPhone maker under fire for allegedly being one of the largest tax avoiders in the nation.
Multinational U.S. corporations are currently holding about $1.5 trillion in profits offshore, hoping to somehow avoid the 35 percent corporate income tax that would accompany repatriation of the funds. About 6.7 percent of that total is held by Apple, which issued bonds to finance a stock buyback instead of paying $9.2 billion in taxes to bring the money back to America.
During his testimony on the Hill, Apple chief Cook said the company has no plans to bring its cash pile to American shores with taxes on foreign earnings as they are. It now appears the company is willing to put its muscle behind shifting corporate taxes downward.
"They are very, very tactical," an unnamed former Apple lobbyist told Reuters. "They only join issues they really care about."
Apple has yet to set up a political action fund to distribute employee contributions to sympathetic congresspersons, but the company has begun bringing in outside lobbying firms such as Fierce, Isakowitz & Blalock, as well as Capitol Tax Partners. The Glover Park Group and the Franklin Square Group have also signed on with Apple, giving the firm lobbyists with experience in taxes, broadband, electronic waste, and spectrum issues.
Cook in the course of his testimony called for the corporate tax rate to drop from its current level of 35 percent to around 25 percent. In terms of foreign earnings, the Apple chief didn't give a specific figure, but he did say that "the rate... to incent [a] huge number of companies [to repatriate their cash], would have to be a single-digit number."
Such a shift in the tax code, Cook said, would not be beneficial only for Apple. Apple, in fact, would be among the companies paying more than it currently does in taxes under such a scheme.
Aside from taxes, Apple would likely lobby Congress on environmental and import issues, as well as broadband and other technology issues. Another likely area of interest would be America's intellectual property protections. Given its struggles with Samsung and other Android device makers, Apple would like to see intellectual property protections within the United States strengthened, as it argues the system isn't built to handle the rapid pace of technological development.
"The U.S. court system is currently structured in such a way," Cook said during his testimony, "that it's currently difficult to get the protections a technology company needs."
Even should Apple double its lobbying to $4 million in 2013, its spending is nowhere near that of other tech giants. Four million would put Apple at about the level that Facebook spent last year. By comparison, Oracle spent more than 50 percent more than that, while Microsoft spent twice that amount. The largest tech lobbying spender in 2012 was Google, which spent $18.2 million lobbying Washington.
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