Apple Ruling Highlights Need for Corporate Tax Reform

Author: Steve Winn
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A European Commission decision that Apple owes Ireland more than $14.5 billion in back taxes highlights the need for corporate tax reform in Washington — something that elected officials in both parties have been talking about for years.

The commission said last week that Ireland had granted “illegal tax benefits” to Apple, a ruling that both Ireland and Apple said they would appeal in European courts. Lawmakers and administration officials in Washington blasted the European decision, arguing that it would reduce taxes that might theoretically be paid to the United States in the future.

But lawmakers in both parties have previously urged the Treasury to raise stronger objections to European tax benefits for U.S. companies.

Many of those companies hold much of their profits abroad to avoid U.S. taxation at what they argue are excessively high rates. Tax reform advocates have suggested that these rates could be lowered in return for the elimination of special tax breaks.

The controversy over the European Commission’s decision is a strong reminder of the need for Washington to finally start moving forward on corporate tax reform.

External links:
Yesterday, Outraged by Apple’s Tax Dodge. Today, by Its Tax Bill (N.Y. Times)
White House Worries Apple Deal to Cost Taxpayers (AP)
Statement on European Commission Ruling (Speaker Ryan)

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