The CEO of tech giant Apple Inc. is likely to face an explosive hearing Tuesday, as a Senate report released Monday night indicates the company has used offshore tax havens to avoid billions in taxes while the company itself claims to pay one-sixth of the government's corporate taxes.
Tim Cook will appear before the Senate Homeland Security Permanent Subcommittee on Investigations on Tuesday at 9:30 a.m. But in the statements released in the lead-up to the session — forced out early by a pre-emptive report from Apple — Chairman Carl Levin, D-Mich., and top Republican John McCain of Arizona made it clear they believe Apple avoided paying a significant amount in taxes.
Levin called Apple's corporate structure, which his panel's report says includes three subsidiaries in Ireland, as the "holy grail of tax avoidance." And the Michigan Democrat is no shrinking violet in confrontations with some of the country's most powerful businessmen. In 2010 on this same panel, Levin drew serious attention by repeatedly reading profanity-laced emails exchanged between top brass at Goldman Sachs.
Our colleague over at CQ.com, Alan K. Ota, has more details on the lead-in to Tuesday's main event:
Apple sought the holy grail of tax avoidance,” said Carl Levin of Michigan, chairman of the Permanent Subcommittee on Investigations. “It has created offshore entities holding tens of billions of dollars while claiming to be a tax resident nowhere. Apple claims to be the largest U.S. corporate taxpayer, but by sheer size and scale it is also among America’s largest tax avoiders.
The report released late Monday on Apple’s dense corporate structure reaching across numerous borders threw a spotlight on the iconic company’s finances just as Cook was set to appear Tuesday before the panel, a subcommittee of the Homeland Security and Governmental Affairs Committee. Cook is to testify on his proposals for an overhaul of the corporate tax code to address taxation of multinationals.
But Levin and John McCain of Arizona, the panel’s ranking Republican, said investigation’s findings showed the company that has become a symbol of U.S. innovation and invention has applied its creativity to constructing complex corporate structures aimed at avoiding taxes.