As Burger King eyes moving to Canada over U.S. corporate taxes, Apple, Google, Microsoft have it their way, too

12 years ago

“With all the talk about inversions and America’s Burger King Going Canadian, it’s easy to ignore even more prevalent tax savings by numerous American companies,” Robert W. Wood writes for Forbes. “Take Microsoft, which admits in its 2014 SEC filing that it avoids $30 billion in U.S. taxes. The trick? Keep about triple that amount, $93 billion in Microsoft’s case, outside the U.S., says The International Business Times.”

“Microsoft is hardly alone. In fact, in taxes, Apple doesn’t really Think Different,” Wood writes. “A Citizens for Tax Justice (CTJ) report says from 2007 to 2013, Microsoft increased its money offshore from $6.1 billion to $76.4 billion… Company after company has been showcased by the Senate Permanent Subcommittee on Investigations. Recently, even earthbound Caterpillar sidestepped $2.4 billion in U.S. taxes over 13 years by shifting profits to Switzerland… But Caterpillar defended the deal as legit, echoing others who have appeared before Levin, including Apple’s Tim Cook. Increasingly, companies—and some Republicans—say the tax code is to blame.”

“Tax havens like Ireland are favored by global giants like Apple, Google, HP, Facebook and Twitter. In May 2013, the Senate Permanent Subcommittee on Investigations said Apple avoided $9 billion in U.S. taxes in 2012 alone via offshore units with no tax home,” Wood writes. “U.S. companies are said to have more than $1.5 trillion offshore. They keep the money there to avoid taxes they would face on bringing it back to the U.S.”

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MacDailyNews Take: The U.S. corporate tax rate is way too high. Obviously.

Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth. – Apple CEO Tim Cook, May 21, 2013