Sep 01, 2016
Apple's $14.5 billion E.U. tax bill--plus its promises to "repatriate at least some of the billions of dollars of cash it holds offshore as early as next year," as the Wall Street Journalreported Thursday--merely provide more evidence that the U.S. corporate tax code must be reformed, progressive observers and tax fairness groups said this week.
"The European Commission action is a chastening reminder to U.S. policymakers that our tax system has enabled much of the tax-dodging antics in which Apple and hundreds of other corporations have engaged," Matt Gardner of Citizens for Tax Justice's research arm said Tuesday in response to the news that the tech giant had been ordered to pay as much as EUR13 billion ($14.5 billion) in back taxes due to an illegal tax break granted by the Irish government.
"Congress needs to close the deferral tax loophole that creates the opportunities for this massive profit shifting by Apple and dozens of other U.S. multinationals," Americans for Tax Fairness (ATF) executive director Frank Clemente added.
"Over the next 10 years," he said, "the deferral tax loophole will allow corporations to avoid paying about $1.3 trillion in U.S. taxes they owe on profits held offshore until those profits are repatriated to the U.S. If the loophole is closed, corporations would have no incentive to transfer profits offshore and stash them in tax havens."
"Now it is time for the U.S. Treasury Department to follow suit and investigate Apple's profit shifting and tax dodging," ATF and SumOfUs declare in a petition that bore more than 18,000 signatures as of Thursday afternoon.
However, not only are Apple and Ireland opposing the ruling, as Common Dreamsreported, but U.S. lawmakers and Treasury Department officials are expressing outrage, too--and not at Apple for its tax avoidance, either.
In fact, Alan Rappeport wrote at the New York Times, most lawmakers and business groups "defended Apple by arguing that the European Union was overstepping its authority and reinterpreting international tax law to unfairly penalize the company."
Indeed, wrote Robert Reich on Wednesday, "rather than congratulate Europe for standing up to Apple, official Washington is outraged."
The European Commission ruling, Reich said, appears to be "adding fuel to the demand Apple and other giant U.S. global corporations have been making, that the United States slash taxes on corporations that move their overseas earnings back to the United States."
As the New York Timesreported Thursday:
In the past, Apple has dangled the prospect of bringing back its cash, if American authorities offered a tax break. Mr. [Tim] Cook, in the interview on Thursday, did not say whether the so-called repatriation of such funds would hinge on changes to American tax law.
If so, Reich argued, it'll be a rip-off.
"A study by the National Bureau of Economic Research found that 92 percent of the repatriated cash was used to pay for dividends, share buybacks, or executive bonuses," he noted.
And Campaign for America's Future blogger Isaiah Poole wrote last year:
The last time corporations got a repatriation tax holiday in exchange for the promise to use the profits in job-creating investments, in 2004, corporations instead ended up using the money brought back into the country to boost shareholder dividends and buy back stock (which drives up stock prices and, often, the compensation of CEOs).
Bottom line, said Clemente this week: "We do not need any sweetheart deals negotiated between Congress and corporate lobbyists to cut the amount of money these tax-dodging corporations owe the American people."
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