Following the Law is not Enough

By Tom Rhodes, 5/28/2013

A company that pays $16Million in taxes has its CEO brought before US Congress and publicly accused of keeping children out of early education, and the cause some seniors go without meals. WTF, that's outrageous! For breaking such laws the company should be fined to death. . . . Oops, they didn't break any law, they paid all the taxes they were required.

Senator Carl Levin denounced Apple CEO Tim Cook for contributing to the federal deficit, by following the law. To make is sound like Apple is some kind of evil corporation Levin used words like "loopholes" and "gimmicks" to describe the legal actions Apple used to minimize its tax burden. While grilling Tim Cook for obeying the law, Sen Levin noted that because of "gimmicks" used by businesses to reduce their taxes, "children across the country won't get early education from Head Start. Needy seniors will go without meals. Fighter jets sit idle on tarmacs because our military lacks the funding to keep pilots trained."

Tax loopholes and gimmicks are provisions in the tax law that let tax payers keep more of the money they earn than they would have if they didn't use those provisions in the law to minimize their taxes. Congress put those provisions into the law, how can they then berate and call before a Congressional committee people who follow the law.

Obviously Senator Carl Levin doesn't believe that people should be allowed to do what is legal if it isn't something the government wants. If Apple CEO Tim Cook has broken the law, then arrest him. If Apple as a corporation has broken the law, then fine them. If however they have not broken the law, then leave them alone.

The rule of law is a system in which the following four universal principles are upheld:

1) The government and its officials and agents as well as individuals and private entities are accountable under the law.

2) The laws are clear, publicized, stable and just, are applied evenly, and protect fundamental rights, including the security of persons and property.

3) The process by which the laws are enacted, administered and enforced is accessible, fair and efficient.

4) Justice is delivered timely by competent, ethical, and independent representatives and neutrals who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.

What is evident is that the US Government, including the US Senate as represented by Sen. Levin, no longer operates on the Rule of Law. The current scandal laden administration is not holding government officials and agents accountable under the law; nor is the current tax code clear and stable and applied evenly; nor is the process which tax code applied fair and efficient; and nor is justice delivered timely by ethical people who reflect the communities they serve.

Apple paid all the taxes it was legally required to pay. Apple did not violate the law. If Congress doesn't want corporations or people to use loopholes and gimmicks then don't put them into the law. Senator Levin, and Congress need to stop trying to bully people and instead apply the law equally to all people and corporations, don't put any loopholes into laws that exempt some and not others (including themselves).

Sen. Levin seems to work under the assumption that all money is the Governments, and the people and corporations are only allowed to keep what the government allows. He ignores the fact that Apple earned every dollar it's earned in the USA by trading products to others voluntarily in exchange for money. The Money is theirs not the governments. Apple has a legal and moral obligation to only pay those taxes it is by law required to pay. It is under no legal or moral obligation to pay more in taxes than the law says it must pay.

If you used gimmicks like, saving in a 401K, the mortgage interest deduction, or student loan deduction, or state sales tax deduction, took advantage of an earned income tax credit, or even itemized to reduce your taxes, then you are just as guilty as Apple, and it is because you took those advantage of those loopholes put into the tax law by Congress that "children across the country won't get early education from Head Start. Needy seniors will go without meals. Fighter jets sit idle on tarmacs because our military lacks the funding to keep pilots trained."