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?

Comments (35)

Jim Logbeck - May 22, 2013

Apple paid over 7 billion in Corporate taxes in America, they have complied with all of our laws and other nations laws where they do business. The Govt. is out of line here and has no business even having Apple testify. It is just the liberal Democrats wanting to bleed every tax dollar they can out of every American.
It is time to cut the Federal Govt size. All Hiring should be suspended, all transfers frozen, until the federal workforce is reduced by at least 30%. Then we could reevaluate.

Elisabeth Baer - May 22, 2013

You are kidding!! Of Course, we should stop the tax code from over taxing business!!! All we seem to be doing is driving good business and manufacturing out of the country!

Todd Wilemon - May 22, 2013

FairTax HR 25 would make this a mute point!

Ronald Bowser - May 22, 2013


r. rubinson - May 22, 2013

apple is absolutely correct in its behavior. when taxes are confiscatory companies have to do all they can to survive. 35% of anything is confiscatory!!! reduce it to 18% and companies will pay it.

Thomas Neviaser - May 22, 2013

Duh! Fix the tax code to stop punishing successful firms. Only Obama and his dolts would want to tax everything at higher and higher levels.

Lee Clark - May 22, 2013

Why should any company, including Apple, bring business back to the US just for the privilege of giving it’s profits to a bloated government through confiscatory tax rates to be spent on programs that are anti-free market and anti-business? Not to mention pro-union and anti-selfdetermination for their employees.

Lila Fillmore - May 22, 2013

It is probably not right to try to tax money made by Apple overseas but this is a liberal company, supporting liberal and often destructive policies and they try to get out of paying taxes just like most profitable, hard working Americans.

Larry Sparks - May 22, 2013

This is a perfect time for Congress to pass a personal and corporate flat tax,

Holly Chapo - May 22, 2013

Apple pays 2.5 % of all the taxes collected annually. That’s one company! Of course they should NOT pay more taxes. We need to totally change the tax code to either a fair tax or a flat tax. As long as we continue with this code that requires thousands of pages to tell us what we must do, we will always have abuses. Has anyone been paying attention to the current IRS scandal? Would that occur with a simpler code? Corrupt people will always find a way but we can at least limit the possibilities by reforming the code.

John - May 22, 2013

Abolish the tax code. Too large, too cumbersome, too
confusing. Maybe a 10% flat tax. Even communist, KGB
Putin has a flat 10% tax. Money flowing in to Kremlin
coffers. No deductions. Complete the tax form on post card.

Greg Walter - May 22, 2013

Fix the tax codes and stop punishing success.

Bill Wainscott - May 22, 2013

Congressional Democrats are mean-spirited socialists who take money from workers and corporations and transfer it to people and organizations that help them get re-elected. We have reached a point where more people and groups are receiving from the government than those who are producing.

Deadrick Dunlap - May 22, 2013

Corporate income tax is a joke as those cost are pasted on to the consumer. Not only is it past time for tax reform, it is logical to establish a “Fair Tax” model as well as cutting the size of the Federal Government.

don - May 22, 2013

Between US tex rates and insane REGULATIONS we’re lucky Apple and others don’t leave the US completely.

don - May 22, 2013

Between US tax rates and insane REGULATIONS we’re lucky Apple and others don’t leave the US completely.

Fran Macanally - May 22, 2013

Democrats hate to see success they would rather mooch off of the working Republicans.

Philip H Davis - May 22, 2013

Why doesn’t congress (Senate) call General Electric? I un derstand it didn’t pay any or very little income tax last year.
Is it because CEO Damon visits the White House?
Philip H Davis

Jude Richardson - May 22, 2013

Maybe, that Apple should pay as much tax as GE. Oops. I forgot GE didn’t pay any. Was good enough to promote the CO, Imelt to the right hand of our “Father”, Obama.

Tom Shaffrey - May 22, 2013

Fix the tax code by simplifying it.

Mrs. F.B. Kummer - May 23, 2013

Apple is just being responsible to protect their resources, especially during the obscene and totally destructive spending spree of the current administration.
We thoroughly appreciate your articles, but don’t do “facebook” for anyone.

Glenda Alley - May 23, 2013

I think we should fix the tax code to stop punishing successful firms!!!

Richard Leighton - May 23, 2013

NO. Apple has done nothing wrong.

Nicholas Gilliam - May 23, 2013

We not only need to radically reduce tax rates but need to adopt a 2 year write off (depreciation) for all business assets except buildings (which could be no more than 10 years). Over a 10 year period the net deduction difference would be zero but the hours saved and the improved ROI should substantially boost the economy

Daniel Burke - May 23, 2013

Senator Rand Paul stood up for Apple and we should be grateful that he did. The ridiculous corporate tax structure in the USA is the cause of companies such as Apple proceeding in this entirely legal manner. They would be derelict in their duty to stockholders if they did anything else.

Nick Vincent - May 23, 2013

Where is the outrage with GE?

William - May 23, 2013

Maybe they should go after G E to they don’t pay taxes
No the best is remove the Federal reserve and eliminate
the IRS put taxes at the local level where the people who pay the tax can clearly see where it goes

jim will - May 23, 2013

The tax code needs to be fixed. As an Apple shareholder I would be upset to hear that the CEO is not taking advantage of any tax codes areas which allow for tax savings. This is business and businesses are in business to make money. Tax savings, as long as they are within the code, is one way to add to profits.

C.Hoffman - May 23, 2013

End the Fed and the IRS. Establish a flat tax so everyone has skin in the game.

BJ Bustance - May 23, 2013

I am so dishearten by this administration and the constant bate and switch games that are played within our government. Of course we should fix our tax code. Keen sense of the obvious – however the real question is “Will we ever get our government to act?” Both sides of the aisle treat the american people like we are too dumb to understand. We understand all right. It is plain that we are paying our government to sit in committees resulting in nothing.

Lynn C. Rogers, Esq. - May 23, 2013

Why punish Apple for being a successful business entity? It is already paying substantial U.S. taxes for profits earned in the U.S. That is more than can be said for General Electric, which apparently pays NO federal taxes, and seems to be getting a free pass from this administration. I guess it really pays for some, like GE’s current or former executives, to be pals of President Obama.

Ron Champlin - May 23, 2013

As everyone has commented, Apple is doing the right thing for their shareholders. The bottom line is that the
Democrats in power do not like capitalism. Someone should remind them that China does.

Dale Rogers - May 23, 2013

The President and Congress should apologize, and ask Apple for advise on running government!


marie colombo - May 23, 2013

What, their not happy with getting 7 Billion. I don’t blame Apple for going out of America to do business. But no matter how you put it or say it, this administration in Washington is out of control. And that you can blame on the media because they keep covering their backs.

Jane Hamman - May 25, 2013

No, Apple should not pay more. The tax code is too complex and too broken to be fixed. It needs to be thrown out! We need to adopt a fair tax or a flat tax, thereby eliminating 90% of all IRS employees too.

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