The following editorial appeared recently in the Dallas Morning News:
Democrat Carl Levin doesn't need directions to navigate the Capitol. He has served Michigan in the U.S. Senate since 1979, and by now he knows where all the bodies are buried. You can't slip anything past this old bull.
Today, he chairs the powerful Permanent Subcommittee on Investigations, an arm of the Homeland Security and Governmental Affairs Committee. He used that post recently to focus the nation's attention on the problem of major U.S.-based, multinational corporations effectively not paying enough in federal taxes.
To illustrate his point, Levin called Apple CEO Tim Cook into a hearing and charged that the tech giant has used "alchemy" and "ghost companies" to avoid paying taxes on $74 billion in earnings over four years.
Levin might have used his iPhone browser to confirm that Apple, in fact, had paid all taxes required by the U.S. and Irish governments — and not a penny more. That Apple had followed every law and regulation amid thousands upon thousands of pages to reduce its tax burden to the legal minimum, as its shareholders might expect.
That's not unlike what every tax-paying American individual and company might do. Or do you know someone who voluntarily sends more money to the government than the law requires?
As Levin must know, 34 years in the Senate have given him a few opportunities to vote on changes to the U.S. tax code. If he was unsure, he could have asked 26-year colleague John McCain, the ranking Republican on the subcommittee, whose main contribution to last week's hearing was wondering why he needed to update his iPhone apps so often.
Sen. Rand Paul, the Kentucky Republican, understood the nonsense before him: "Instead of harassing Apple executives, members of the Senate should have brought in a giant mirror if they wanted to see who is responsible."
Apple, of course, does sell products that earn billions of dollars and can afford to hire a fleet of accountants and lawyers to negotiate tax codes. Microsoft, Exxon Mobil, Hewlett-Packard, General Electric, Google and other multinationals do the same. You may be stuck with H&R Block, but the idea is the same: Pay what you owe and only that.
If Levin, McCain and the other old bulls really want to help, they could throw their weight behind an overhaul of the tax code. We have backed ideas from the mostly forgotten Simpson-Bowles commission, which suggested lowering the corporate rate from 35 percent to 22 to 27 percent.
As Levin knows, because of legal deductions and legal capital offshoring, few big corporations pay the 35 percent, Apple included. Even with all its success and influence, you can't blame Apple for that; only Congress can write loopholes into tax laws.
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