- Fair treatment makes life bearable in a stressful age
- Apple followed the rules, … and paid
- The “crime” is access to better information
Life is not fair, but sometimes it’s also outrageously absurd – and that makes the unfairness seem worse. As a society, and particularly as a democracy, most of us see fairness as a baseline, the starting point from which to make decisions and evaluations. We’re certain we treat our families and friends fairly, and all decent people (we believe) strive to treat their colleagues, co-workers, and employees with fairness.
Accordingly, this sense of decency typically extends to the random daily encounters we have: security guards, store clerks, airport ticket agents — all of these are deserving of fair treatment from decent people.
The daily dispensing and acknowledgment of fair treatment is the grease that makes life bearable in a stressful age. Most of us know life isn’t fair, but that’s just the reason we feel so relieved when we feel well treated — and so outraged at some demonstration of what we perceive to be unfairness.
Mind you, our devotion to the spirit of fairness rarely stops us from seeking out a better opportunity, a better approach, or a better insight to some highly sought objective. You can tip a maître d’ or a garage attendant in the hope of better service. You can sniff around your company’s executive offices for investment insights, or news of personnel changes. None of this is strictly fair, but it’s how things are done. You need access to more information, and you have to find a way that is not literally spelled out by standard rules in order to make it happen.
These are the thoughts that occurred to me when the CEO of Apple Inc. was hauled in front of a U.S. Senate panel last month, to defend his company against the Senators’ accusations that the technology titans had constructed an intolerably lucrative tax-dodging scheme.
This was quite a different scene than one might have expected two or three years ago. Then, the late Steve Jobs, who had groomed a reputation for coolness and abstraction, headed Apple. A technological monk like Jobs gave no hint of avarice or megalomania, so no such accusations would stick to him or Apple at that time.
Now though, CEO Tim Cook was treated with the insults and insinuations that prosecuting attorneys use on defendants. According to a Senate report, Apple has avoided tens of billions of dollars in federal income taxes by shifting its revenues through various offshore entities, including three centered in Ireland where no tax is required of them. These “companies” have no employees, but they have Apple executives, and managed to record hundreds of billions of dollars in income for the corporation over recent years.
Also, Apple transferred economic rights for some intellectual property to offshore affiliates in low-tax locales in order to save more tens of billions of dollars. And it still engaged accountants and attorneys to locate U.S. tax loopholes, thereby avoiding federal taxes on $44 billion in otherwise taxable income.
All this was done in the name of the corporation. The executives being berated, it was made clear, paid their personal income taxes in full.
“We pay all the taxes we owe, every single dollar,” according to CEO Cook. I assume he’s right. But that didn’t save him from the accusations of unfairness, which are likely to linger in his reputation the way “coolness” lingers around the memory of the late Mr. Jobs. Accusations, also, that were assembled in a wholly arbitrary way by the Senate panel: there are no such hearings waiting for executives of General Electric or Goldman Sachs, or any other corporate giant that is rumored to be skipping lightly through the tax codes.
My further assumption is that the Senators’ outrage is not over fairness at all, but over the insult of realizing that someone has found a route through the tax laws they assemble and defend. These laws, you see, allow them to argue that they re establishing and enforcing fairness. They are the defenders of the faith that unites use.
Yet who among us would not find a way to save on his or her tax obligation if a legal and acceptable way could be found? Indeed, who has not taken such an opportunity when one is found? Apple’s infraction, apparently, is that it had access to better information than the Senate panel thought was legal, or appropriate.
The outrage is not over Apple Inc.’s abuse of fair play, but over the willingness we have to surrender good sense and ingenuity to a presumption that fairness can be achieved, or recognized, or rewarded.
There is irony here, too: Apple’s success has been built on its ability to magnify and distribute “access” to more information to more people. We know more, we learn more, we earn more, thanks to Apple’s products. Just be careful you don’t upstage the wrong people with what you know.