Why Obama Won't Demand Bigger Bite From Apple
NEW YORK (TheStreet) -- President Barack Obama prefers to slam Big Oil instead of Apple(AAPL) for circumventing a higher tax rate, but eventually both are likely to end up having to pay more.
While the president regularly rails against Exxon Mobil(XOM) and its brethren and wealthy American individuals for not paying their "fair share" in taxes, the largest U.S. company by market cap reportedly takes steps to avoid paying more than $2 billion in taxes by setting up units in low or tax-free states, yet Tim Cook's colossus hasn't come under the same criticism from the White House.
"Oil companies are very unpopular, not just with Democrats, but with most Americans, and they're getting a subsidy that is specific to their industry and that they don't need," said David DiMartino, a Democratic strategist in Washington D.C. "There's also your typical identify-a-villain strategy here: Apple's got fairly high approval ratings, people love their products; oil and gas companies, not so much."
Apple legally dodges some $2.4 billion in taxes, according to reports, while oil companies are estimated to receive some $2 billion in tax breaks, but the issue may be less about whether it's fair for the president and Democrats to pan Big Oil while keeping silent about Apple, and more about Apple's defensive outlook on taxes.
"We manufacture parts in the U.S. and export them around the world, and U.S. developers create apps that we sell in over 100 countries," the tech giant wrote in a statement to The New York Times. "In the first half of fiscal year 2012 our U.S. operations have generated almost $5 billion in federal and state income taxes."
The Times held that Apple paid about $3.3 billion, or a 9.8% rate.