The European Commission ruled that Apple owes Ireland over $14 billion in taxes the company avoided through a sweetheart deal with the country. Apple’s Tim Cook called the ruling “maddening,” vowing to appeal. Ironically, the Irish government announced that it would also challenge the judgment.
Thomas Piketty, author of Capital in the 21st Century, advocates for a “global wealth” tax to reduce or eliminate country-hopping by international corporations bent on reducing their tax liabilities. Perhaps the EC’s ruling can serve as a first step in accomplishing Piketty’s proposal.
Now comes Senator Elizabeth Warren in a New York Times op-ed. She writes:
For years, corporate tax dodgers have taken full advantage of all the benefits of being American companies, while searching out every possible way to avoid paying American taxes. Now that other leading countries are starting to get tough on tax enforcement, these tax dodgers suddenly want to move their money back to the United States. When they do, they should pay their fair share, just as working families and small businesses have been all along.
Countries, especially the United States, need a lot more money to repair and build public infrastructure and “promote the general welfare.” Over the years, corporations have used their considerable financial muscle to whittle down their tax rates. For their part, various countries have, in effect, bid against each other to attract and retain businesses. Ireland is certainly one of those countries. (Washington state, of course, enacted the largest public subsidy of all with its extremely generous tax-avoidance package that benefits Boeing, as keen a political player as any. And guess what? The state is in dire need of additional revenues to pay for public schools, among other obligations.)