As his company hordes $102 billion in overseas profits on which it has paid no taxes, Apple’s CEO, Tom Cook, is asking the Senate today for lower corporate tax rates.
Cook is testifying in favor of the lower rates before the U.S. Senate Permanent Subcommittee on Investigations, even whose ranking GOP member, Sen. John McCain, has described Apple as “one of the largest tax evaders.”
According to reports released by groups like the AFL-CIO and Citizens for Tax Justice, Apple has been notorious for avoiding taxes by setting up foreign “subsidiaries” in tax-haven countries, and moving jobs and profit centers out of the country.
“Apple has paid almost no income taxes to any country on its $102 billion in offshore cash holdings,” said a Citizens for Tax Justice report released only yesterday at a joint press conference called by the AFL-CIO and CTJ. “Applying the U.S. tax rate to Apple’s overseas profits would generate $35.3 billion in U.S. income taxes,” the report said. The groups say that in view of this, Cook’s request for even more tax breaks is particularly outrageous.
Today’s Senate hearing, titled “Offshore Profit Shifting and the U.S. Tax Code – Part 2,” is devoted entirely to Apple’s tax avoidance schemes. Senators are looking into Apple’s holding of more than $100 billion in tax haven countries, including Ireland where the company is registered. Even Ireland, the company’s critics note, has collected no taxes from Apple.
CEO Cook, who earned $378 million at Apple last year, is calling upon the senators to approve a “tax repatriation holiday” and a “territorial tax system.”
The AFL-CIO, the nations largest labor federation, said in a statement today that Cook’s proposals would mean companies like Apple would pay even less in taxes, CEOs like Cook would earn even more money and “we will have higher taxes, fewer good schools and good roads and police and teachers and disaster relief and the other things government does to make our lives better.”
Small businessmen note that the tax avoidance by Apple, particularly the policy of rewarding the company with such breaks for offshoring jobs, makes Apple more competitive against smaller American companies that do keep jobs and profits at home.
Bob Clemente, the campaign manager for Americans for Tax Fairness, another tax justice group, told the same press conference yesterday “Apple is acting like a back-alley thief trying to pick the pockets of American taxpayers.”
According to CTJ’s executive director Bob McIntyre, the situation is even worse than it looks. He said “often the overseas profits are actually profits made in the U.S. that the company is pretending to have made overseas so that it can avoid taxes.”
Damon Silvers, Policy Director and Special Counsel for the AFL-CIO, said the request by Apple for even more tax breaks was “particularly disgusting in light of what is going on with the sequester cuts.
“Today, as Apple testifies,” said Silvers, “we are dismantling vital government services, laying people off because we are in theory in fiscal crisis…. Head Start, cancer research, national defense – there is a long list of functions not being carried forward because in the view of Congress we don’t have the revenues to support it.”
Image: Americans for Tax Fairness