More than any other American company, Apple holds $181.1 billion in offshore accounts, according to a
Tuesday report released by Citizens for Tax Justice, an advocacy group.
Other major American tech firms—including Cisco, Google, Hewlett-Packard, and Oracle—are among the largest companies that are using legal but questionable tax tricks to keep money overseas and effectively pay little to no American federal corporate taxes.
Citizens for Tax Justice concluded: "Multinational corporations’ use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year."
One tax law professor told Ars that this untapped revenue source could stand to significantly benefit the United States.
"Losing $90 billion of potential tax revenues every year is a very big deal,"
Neil Buchanan, a professor at George Washington University, said by e-mail. "That money could be used to reverse recent cuts in Head Start, and/or assistance to state governments to fund education at all levels, or increase the Earned Income Tax Credit, and on and on. Politicians who respond to proposals to fund these programs by saying that ‘we can't afford it’ are simply saying, ‘I'd rather cut Apple's tax bill than educate our children.’"
As the organization wrote in its findings:
[Apple] would owe $59.2 billion in US taxes if these profits were not officially held offshore for tax purposes. This means that Apple has paid a miniscule 2.3 percent tax rate on its offshore profits. That confirms that Apple has been getting away with paying almost nothing in taxes on the huge amount of profits it has booked in Ireland.
