U.S. Senator 'livid' about Apple's U.S. tax dealingsWhen asked about Apple's supposed "sidestepping" of U.S. tax laws, Senator Tom Colburn (R-Okla.) said that he was "livid about that" and used the company as an example of why the country needs tax reform.
During a Tuesday interview on MSNBC's "Morning Joe," Sen. Coburn aired his feelings regarding Apple's use of offshore holdings to avoid paying high tax rates in countries like the U.S. and England, reports Business Insider.
The senator said that he was "livid" about the situation, referring to a New York Times piece that claims Apple uses various tax loopholes to save billions of dollars each year.
"Why should Apple pay at 10 percent and some other company that can't export their technology ... why are they paying 35 percent?" Sen. Coburn said.
According to the Times report, the iPad maker pays a tax rate of only 9.8 percent, though some have questioned the calculations quoted in the piece saying that the results are based on incorrect data. Forbes claims that the Times "compared the profits in 2011 not with the taxes paid on profits from 2011. It has compared profits in 2011 with the taxes calculated on the basis of 2010′s profits."
Also critical of the calculations was Fox Business which said "the Times likely used a lower effective rate for Apple versus what the rate really is, which makes the story sound more shocking than it is."
In any case, Sen. Coburn used the opportunity to discuss the current tax code situation in America and alludes to a possible probe into the matter noting that he sent a letter to Sen. Carl Levin (D-Mich.) saying "we've gotta look at this."
While Coburn agrees that there should be incentives for multi-national corporations like Apple to invest worldwide profits in domestic enterprise, he wants to close so-called "loopholes" in the current tax code that allow for tax havens. He mentions Apple's use of its Ireland headquarters and a Caribbean-based offshoot to shelter the company from high tax rates.
Morning Joe co-host Mika Brzezinski asked specifically about a repatriation holiday in which large companies can bring capital back into the U.S. with a lower tax rate in return for certain investment promises like job creation, an event that occurred in 2004 with little effect. In response, Sen. Coburn said that he would support such an initiative as long as stricter controls are placed on money movement.
"You can't just do that, you gotta reform the tax code," Sen. Coburn said. "If [the U.S. doesn't] reform [its] corporate tax code We're in a global economy, we're not competetive now, we now have the highest corporate tax in the world and only those that have intellectual property that can move the location of that intellectual property offshore can get [tax rates] down."
Sen. Coburn goes on to say that the U.S. needs to rid its tax code of loopholes that allow the "well endowed" to avoid high rates.
"Let's clean it out," Sen. Coburn said. "Let's make it transparent. And let's make it fair."