Apple and Offshore Profits
Apple Computer uses off shore tax havens in Ireland, Netherlands and other countries to substantially reduce their US federal corporate income taxes – taking billions in profits offshore.
Like other high tech and drug companies, they shift patents and intellectual property to subsidiaries in low and no tax haven countries – and transfer profits to these companies to avoid taxes. This little game is sometimes called the “Double Irish” and the “Dutch Sandwich.”
As if that wasn't bad enough, now Apple is lobbying Congress to pay next-to-no taxes when they bring back to the US their over $12 billion in offshore profits. And they're leading a national lobbying group of global corporations that want the same special treatment for their more than $1.2 trillion in offshore profits.
If Congress passes this “tax holiday,” Apple will avoid over $4 billion in taxes. And global tax dodgers could avoid over $80 billion. Not only is this more than enough to solve every state budget crisis in the country, it's also unfair to individual taxpayers and domestic businesses that have to pick up the slack for tax deadbeats like Apple.
Apple and the other companies lobbying Congress -- including Pfizer, Cisco and Oracle -- claim that a “tax holiday” will bring back billions in investment to the U.S. and help create jobs. This is a lie. Independent studies show that a similar tax holiday in 2004 did little to create jobs. In fact, it mostly went to boost stock prices and CEO pay, and enable companies to buy back stock. Some companies oppose this short term tax holiday and want to create a permanent tax holiday by instituting a “territorial tax system” that would accelerate the use of accounting gymnastics and permanently reward overseas tax dodgers. We oppose both short and long-term tax holidays for profits held off-shore.