Apple executives were called in to testify before members of Congress yesterday. They were accused of “shifting” profits abroad to avoid paying taxes.

The fact of the matter, though, as Heritage Foundation tax expert Curtis Dubay told Fox Business yesterday, is that the money hasn’t been shifted at all because it wasn’t earned in the U.S. “I can’t go down to the Apple store here in Washington, buy an iPad, and have Apple then ‘shift’ that income abroad,” he said.

The U.S. corporate tax rate is the highest rate in the world. As long as it remains so exorbitant, successful businesses like Apple are going to keep their foreign income abroad.

Heritage’s Amy Payne has more:

The reason the Senate feigned indignation over an issue that had nothing to do with the U.S. is that some Members want Apple to pay more U.S. tax on all that foreign cash. They want Apple to bring all of that profit back into the U.S. and pay the U.S. corporate tax rate—the world’s highest—on it. But as long as we keep the U.S. rate the highest in the world, Apple and other multinational businesses are going to keep their foreign income abroad.

Apple has not done anything illegal by minimizing its tax liability. Because of America’s extremely high corporate tax rate, many companies don’t return to the U.S. what money they earn abroad. While other countries have been making efforts to cut their corporate tax rates, the U.S. has been making it more and more difficult for U.S. businesses.

Do you think Apple should pay more in taxes? Or should we fix the tax code to stop punishing successful firms?

On Friday the IRS admitted to targeting conservative groups for extra scrutiny in their applications for tax-exempt status. The agency claimed the practice was initiated by low-level workers and did not result from political bias.

Then over the weekend, it was revealed that the IRS targeted “groups focused on government spending, government debt, taxes, and education on ways to ‘make America a better place to live.’”

Heritage Foundation expert Hans von Spakovsky says that any explanation other than political bias would be hard to believe, because “the only relevant or substantive thing these organizations have in common is that they are all conservative politically.”

In fact, it’s fully permissible for organizations to advance conservative principles, he explains in a separate post:

Whether or not you agree with the Administration’s policies or whether you criticize the expansion of government or its excessive debt are not a consideration under the Revenue Code to qualify for tax-exempt status. Apparently, the IRS finally realized that, because according to The Washington Post, it changed its tactics in May 2012 to focus on “organizations with indicators of significant amounts of political campaign intervention.” Despite that change, dozens of conservative organizations are still waiting to receive their tax exemptions.

So why did the practice go on for so long without interference from the higher-ups? There should be a thorough investigation, von Spakovsky argues:

It’s unclear who in the IRS or elsewhere supported or condoned the wrongful conduct at issue, but it is important for the rule of law and the interests of justice that Congress aggressively pursue its oversight function to get to the bottom of this scandal and, most importantly, who instigated and authorized it.

Do you think targeting conservative groups was political?

Last week, Speaker John Boehner (R-OH) told Bloomberg Television that he would “probably not” support the Marketplace Fairness Act, an Internet sales tax bill that passed through the Senate by a 69–27 margin.

Boehner’s reasoning for not supporting the bill? “Moving this bill where you’ve got 50 different sales tax codes, it’s a mess out there,” he said. “You’re going to make it much more difficult for online retailers to be able to comply.”

Many small business owners are already frustrated by the complexity and high costs associated with the Internet sales tax. The Heritage Foundation has put together this infographic to highlight some of their concerns:

Do you think the complexity of the sales tax codes will over-burden small business owners?

You know you’re changing the debate on the Internet sales tax proposal when even left-leaning MSNBC features a Heritage Foundation video on the issue.

In a report last night on the Senate passage of the tax-hike proposal, MSNBC’s Chris Hayes featured a Heritage video on liberals who oppose the plan. Watch the segment below:

Read more Heritage research on how the Internet sales tax could cost you and cost small businesses.

Do you think the Internet sales tax should be implemented?

Jim DeMint

Heritage Foundation President Jim DeMint will appear Sunday on ABC’s This Week with George Stephanopoulos. He plans to discuss Heritage’s research on the cost of granting amnesty to illegal immigrants under the Gang of Eight proposal.

Click here see when to tune in in your area.

Next week Senators will begin to debate the “Gang of Eight’s” comprehensive immigration bill. Heritage President Jim DeMint has said the bill is “unfair, it costs too much, and it’s going to make the problem worse.”

Below is an infographic that explains some of the major problems with a “comprehensive” approach to immigration reform. Continue Reading »

FBI/AFP/Getty Images/Newscom

News reports that suspected Boston bombers Tamerlan and Dzhokhar Tsarnaev received large amounts of welfare benefits draw “attention to the policy principle that immigrants should be net contributors to the government and society and should not be a fiscal burden on American society,” The Heritage Foundation’s Rachel Sheffield argues.

As ABC News reports,  the time Tamerlan was receiving state aid “coincides with the years Tamerlan Tsarnaev reportedly became more radicalized. He was interviewed by the FBI in 2011 after Russia flagged Tsarnaev for his potentially dangerous views.” At the time of the bombing, neither of the brothers was receiving benefits.

Sheffield continues: Continue Reading »

Entrepreneur Catesby Jones will join The Heritage Foundation today at 11:00 a.m. Eastern for a webcast about the dangers of the Internet sales tax.

“Catesby Jones has declared war on  the Internet sales tax,” Heritage’s Rob Bluey explains. ”As president of the 28-year-old clothing company Peace Frogs, his business relies on Internet purchases to stay profitable. Compliance with the so-called Marketplace Fairness Act could put him out of business — or at least create a regulatory compliance nightmare.”

Watch online on The Foundry today at 11:00 a.m. Eastern.

Opposition to the Internet sales tax is not limited to conservatives. Watch the video above to hear the words of the Democratic lawmakers who oppose this tax.

The Heritage Foundation’s T. Elliot Gaiser outlines 10 reasons these Democrats oppose the Internet sales tax.  Continue Reading »

President Obama yesterday endorsed a Senate bill that would allow states to tax online purchases. Under this proposal, anything you buy online would be subject to new state and local sales taxes based on where you live.

This would impose onerous new burdens on both consumers and companies that sell online. The Heritage Foundation’s T. Elliot Gaiser explains the plan’s consequences:

The burden on businesses would be immense and would skew the playing field against online businesses and online consumers. “This means quizzing purchasers about their location, looking up the appropriate rules and regulations in more than 9,600 taxing jurisdictions across the country, and then collecting and remitting sales tax for that distant authority,” writes Andrew Moylan, senior fellow with the R Street Institute. “No brick-and-mortar shop has to do this for in-store sales, and yet every online retailer would have to do it for remote sales.”

The plan amounts to “taxation without representation,” Heritage President Jim DeMint wrote last year. Under the proposed arrangement, business owners would be subject to taxes over which they have no say.

Heritage Foundation expert David Addington elaborates: Continue Reading »