Washington DC is starting to react to the record-breaking EU decision to force Apple to pay around $14 billion in taxes to Ireland.
“Both Apple and Ireland are appealing the decision, but the commission’s announcement was the latest sign that multinational corporations are running out of places to hide from paying taxes,” Massachusetts Sen. Elizabeth Warren wrote in a New York Times op-ed.
“The door is now open for Congress to fix our own corporate tax code, which has allowed the biggest multinationals to shirk their obligations for decades.”
An aspect of the controversy over the EU decision was that Europe was taking taxes from Apple that might have been eventually collected by the United States, if Congress ever passed corporate tax reform. The EU hit Apple because Ireland gave it a deal that allowed it to attribute its profits to offices in Ireland, a low-tax country.
Warren says Apple paid a tax rate of 1% or lower.
Warren, who campaigns for Democratic presidential nominee Hillary Clinton, argues for corporate tax reform, but warns against legislation that is supported by companies like Apple.
“Now that they are feeling the sting from foreign tax crackdowns, giant corporations and their Washington lobbyists are pressing Congress to cut them a new sweetheart deal here at home,” Warren wrote, warning Congress against “bailing out the tax dodgers under the guise of tax reform.”
“Giant corporations are pushing corporate tax reform proposals that offer a lower permanent tax rate for earnings generated abroad than earnings generated at home. That is nuts,” Warren wrote.
Apple CEO Tim Cook said last month that Apple was not going to bring money back to the United States until there’s a “fair rate.” He also predicted corporate tax reform in 2017.
Ultimately, Warren wants big companies to pay more taxes.
“First, Congress should increase the share of government revenue generated from taxes on big corporations — permanently. In the 1950s, corporations contributed about $3 out of every $10 in federal revenue. Today they contribute $1 out of every $10, despite their reliance on federal investments to start and expand their businesses,” Warren wrote.
President Barack Obama also recently weighed in on the Apple tax affair during the G-20 summit in China. “It’s in the interest of all countries, whether they’re developed countries or developing countries, to put a stop to this,” Obama said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.