Apple CEO Tim Cook is  appearing before the Senate Permanent Subcommittee on Investigations  today to answer charges that his company has avoided paying billions of dollars in taxes through the use of overseas tax shelters and loopholes in the corporate tax code.

Loopholes in the tax code allow dozens of U.S.-based corporations to avoid paying taxes, and closing these loopholes is a central issue in the debate in Congress over corporate taxes. 

Major U.S. corporations are now lobbying Congress to expand these loopholes so they will not have to pay any taxes at all on their overseas corporate profits.  Their proposal is known as a “territorial tax system.” The AFL-CIO strongly opposes a territorial tax system because it would increase incentive for corporations to send jobs overseas and abuse overseas tax havens.

The AFL-CIO is urging Congress to close—not broaden—the loophole that makes it possible for corporations to abuse tax havens and avoid paying U.S. taxes.  Closing this loophole would raise $583 billion over 10 years. Big profitable corporations should not be exempt from “shared sacrifice,” and it is time they started paying their fair share.

A  recent analysis  by Citizens for Tax Justice found that Apple has paid no taxes to any country on its more than $100 billion in offshore cash holdings, which represent profits that Apple has shifted (on paper) out of the countries where they were earned into foreign tax havens.

An investigation by the Senate subcommittee, chaired by Sen. Carl Levin (D-Mich.), found that Apple has shifted tens of billions of dollars of two subsidiaries in Ireland, while claiming that neither subsidiary is a tax resident of any country.

Americans for Tax Fairness (ATF) is  live-blogging  the hearing:

Apple established at the apex of its offshore network an offshore holding company that it says is not tax resident in any nation. That subsidiary, Apple Operations International, has no employees and no physical presence, but keeps its bank accounts and records in the United States and holds its board meetings in California. It was incorporated in Ireland in 1980, and is owned and controlled by the U.S. parent company, Apple Inc. Ireland asserts tax jurisdiction only over companies that are managed and controlled in Ireland, but the United States bases tax residency on where a company is incorporated. Exploiting the gap between the two nations’ tax laws, Apple Operations International has not filed an income tax return in either country, or any other country, for the past five years. From 2009 to 2012, it reported income totaling $30 billion.

ATF recently  launched a petition  calling on Apple to pay its fair share of taxes.