Apple (like many giant, multinational corporations) has been avoiding paying the taxes they owe to the country by setting up foreign “subsidiaries” in tax-haven countries and moving jobs and profit centers out of the country. They have accumulated billions upon billions of dollars in these tax havens. Now they want a special tax break to reward them for doing that.
On Tuesday, the U.S. Senate Permanent Subcommittee on Investigations is scheduled to hold a hearing titled “Offshore Profit Shifting and the U.S. Tax Code–Part 2 (Apple Inc.)” with Apple’s Tim Cook. Apple is holding more than $100 billion in tax haven countries, to evade U.S. taxes. At the hearing, Cook (who had a 2011 compensation of $378 million) is expected to offer a proposal for changes to the corporate tax system.
Cook’s proposal is likely to be for a “tax repatriation holiday” and a “territorial tax system,” both of which mean giant, multinational companies like Apple will pay less in taxes, people like Cook will have even more money and We the People will end up with higher taxes, fewer good schools and good roads and police and teachers and the other things government does to make our lives better. As a bonus, this makes giant multinationals that move jobs and profits overseas even more competitive against smaller American companies that keep jobs and profits here and do not have foreign “subsidiaries” located in tax havens.
New Report on Apple’s Tax Avoidance
Citizens for Tax Justice (CTJ), Americans for Tax Fairness (ATF) and the AFL-CIO held a conference call today to talk about a new report by CTJ, Apple Holds Billions of Dollars in Foreign Tax Havens, documenting Apple’s offshore tax avoidance. The report states that,
An analysis of Apple Inc.’s financial reports makes clear that Apple has paid almost no income taxes to any country on its $102 billion in offshore cash holdings. That means that this cash hoard reflects profits that were shifted, on paper, out of countries where the profits were actually earned into foreign tax havens.
How much is this costing us? First, with Washington all aflutter over deficits, the tax dollars: $35.3 billion. From the report:
Applying this same U.S. tax rate to Apple’s $102.3 billion offshore cash hoard as of March 2013 would generate $35.3 billion in U.S. income taxes, without deferral.
Worse, however, is the cost in jobs and manufacturing infrastructure. The current tax laws encourage companies to move jobs, factories and profit centers out of the country. They actually subsidize this with tax breaks!