Gimme shelter

Apple's latest tax dodge is yet another chink in its once-shining armor

Virginia Heffernan, Yahoo News
Yahoo News
Apple CEO Tim Cook testifies on Capitol Hill in Washington, Tuesday, May 21, 2013, before the Senate Homeland Security and Governmental Affairs Permanent subcommittee on Investigations as lawmakers examine the methods employed by multinational corporations to shift profits offshore and how such activities are affected by the Internal Revenue Code. Lawmakers want to know the tax strategy of how Apple, the world's most valuable company, based in Cupertino, Calif., holds a billion dollars in an Irish subsidiary as a tax strategy, according to a report issued this week by the subcommittee. (AP Photo/J. Scott Applewhite)
.

View photo

Apple CEO Tim Cook testifies on Capitol Hill in Washington, Tuesday, May 21, 2013, before the Senate Homeland Security and Governmental Affairs Permanent subcommittee on Investigations as lawmakers examine the methods employed by multinational corporations to shift profits offshore and how such activities are affected by the Internal Revenue Code. Lawmakers want to know the tax strategy of how Apple, the world's most valuable company, based in Cupertino, Calif., holds a billion dollars in an Irish subsidiary as a tax strategy, according to a report issued this week by the subcommittee. (AP Photo/J. Scott Applewhite)

by Virginia Heffernan

Apple products are cute, simple and self-contained. You know what isn’t cute, simple and self-contained? The web of foreign tax shelters that Apple is accused of employing to avoid paying billions in taxes to the U.S. Government.

A Congressional panel has charged that Apple, America’s one-time sweetheart, didn’t just somehow bounce to its perch as the world’s most profitable company on good nature and high intelligence. No—Apple, the investigators report, hid money, relied on a network of shady “subsidiaries” and deprived the nation of billions in tax revenue. Tim Cook, the company’s shucksy CEO, is now telling the Senate he’s downright teed off at the suggestion; the company, he says, breaks no laws, pays what it owes and remains as pure as the driven snow.

Not paying taxes you owe is never good, and the story seems to be further exhausting a national resource that may be more precious to Apple than money: America’s stores of goodwill toward it. Not long ago, those good-will silos were filled to overflowing. Now they're depleting faster than the battery on an iPhone streaming high-def video over shaky Wi-Fi.

The brain and soul of the company, some charge, died in the person of Steve Jobs, on October 5, 2011. Legends of Jobs circulated faster than the first iPod. The stock price soared. On September 19, 2012, the company’s market capitalization was a gasp-inducing $656.51 billion.

But then—something happened. Daughters with heavy iPhone habits have one hypothesis about what it was; their Wall Street dads have another. It’s the ubiquity of the products. It's the products themselves. It’s the death of Jobs. It’s a market flinch that ought not to be overthought, or should or shouldn’t be interpreted any which way but down.

Whatever the case—its specs or its products or its users—Apple’s market cap is now $374.37 billion, down some $275 billion from last fall. And the numbers show that, once again, recent sales of the iPhone 5 have regularly failed to meet Wall Street estimates.

The Wall Street Journal has dutifully reported that Apple’s mystique is wearing off, as have several other publications. You may or may not buy into these stories. But the general pile-on triggered by Apple’s douchey decision to push Google Maps off its iOS so it could make people use its much, much worse Maps app—Apple earned that. We were, using Apple Maps, quite literally lost.

The crisis among the party loyal is everywhere.My colleague Rob Walker, a longtime Apple disciple, just cheated on our Cupertino Overlord, buying his first non-Apple gadget in 25 years. Rob’s getting used to the Android OS but he loves his HTC One mobile device; he even wants to be seen with it, flouting Apple conformity.

Even adolescents, who craved iPhones as their first mobile status symbol, are turning on Apple. "Teens are telling us Apple is done,” Tina Wells, of the youth-oriented Buzz Marketing Group, said earlier this year. “Apple has done a great job of embracing Gen X...but I don’t think they are connecting with [younger] Millennials." Wells said teens are drawn to the elegant, feature-rich Samsung Galaxy, a craving I've noticed in several of the New York teenagers I know.

And then on Facebook the other day, a friend was greeted with a chorus of “amens” when she asked, “Is anybody else sick of Apple's arrogance? Took my phone to the ‘geniuses’ today because it suddenly can't hold a charge for 2 hrs and hangs up calls every 5 mins. They said, ‘There's nothing wrong with it, our diagnostic is accurate 100% of the time.’ I said ‘Well, might that have to do with the fact that when your diagnostic has no correspondence to reality, you deny reality?’”

She put it to the crowd: Should I actually pass on the iPhone 5? Yes, yes, yes came the reply.

It used to be that people who deleted “Sent from my iPhone” in favor of a custom sign-off used the slot to ask forgiveness for typos, and express wonder at the device itself. Sent from the palm of my hand. Sent by Magic. Sent from a tiny rectangle that creates light and pictures with sorcery.

The other day, I got an email from someone with a sign-off I’d never seen. Sent from an iphone. That means it's spelled wrong...and I'm probably lost.

View Comments (489)