The New York Times reports on a congressional investigation into the tax policies of technology giants, including Apple.
The Senate Permanent Subcommittee on Investigations is nearly finished with a year-long investigation into the methods that large technology companies use to avoid paying U.S. corporate income tax. Apple, for its part, allocates some 70 percent of its income to overseas affiliates where tax rates are much lower.
It appears that all of Apple's techniques are legal by U.S. law, though some politicians have said that corporations going to extraordinary lengths to avoid paying income tax and that they are violating the spirit of tax laws.
In its statement, Apple said it paid “an enormous amount of taxes” to local, state and federal governments. "In fiscal 2012 we paid $6 billion in federal corporate income taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government," it said.
Apple was one of the first companies to use the accounting scheme called a "Double Irish With a Dutch Sandwich", where profits are routed through Irish and Dutch subsidiaries before finally landing in the Caribbean. Now, hundreds of companies use those methods.
Apple, for its part, allocates some 70 percent of its income to overseas affiliates where tax rates are much lower.
which is why a lower corporate tax rate would (should) actually increase tax revenue