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Apple CEO Timothy Cook delivers opening remarks while testifying before the Senate Homeland Security and Governmental Affairs Committee's Investigations Subcommittee about the company's offshore profit shifting and tax avoidance in the Dirksen Senate Office Building on Capitol Hill May 21, 2013 in Washington, DC.
Apple CEO Tim Cook got a grilling this morning in a hearing called by the U.S. Senate to investigate the tech giant’s paying of its taxes on foreign sales. According to a Senate investigation, Apple Operations International reported $30 billion in income over four years but did not filed an income tax return in any country and has no employees. Similarly, Apple Sales International, based in Ireland, had $74 billion in sales income from 2009-2012 but paid almost no taxes.
Cook told the Senate committee that his company did nothing wrong, and followed tax laws, stating, “We are proud to be an American company, and we are equally proud of our contributions to the U.S. economy.”
Cook went on to criticize the U.S. tax code for not keeping pace with the digital age and called for a simplified corporate tax code that would lower the rate paid on foreign earning, which currently stands at 35 percent and is one of the reasons many large corporations site for using offshore subsidiaries.
Should Apple be required to pay the full tax bill owed for it’s revenue in foreign countries? Should the U.S. government update the tax code to make it less painful for American companies to pay what they owe on sales abroad?
Alex Brill, researcher at the American Enterprise Institute where he studies the impact of tax policy in the U.S. economy; former policy director and chief economist of the House Ways and Means Committee; he also served on the staff of the President's Council of Economic Advisers under George W. Bush.
Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities; served as the Chief Economist and Economic Adviser to Vice President Joe Biden from 2009-2011