Like all arguments involving money and politics, the debate over American companies’ foreign-held cash and how it should be taxed – or not – when brought back to the U.S. quickly gets overheated and oversimplified.
Tuesday’s Congressional hearings, at which Apple Inc. (AAPL) chief executive Tim Cook is due to testify, will no doubt prove this.
Cook will argue, as leaders of big technology companies frequently do, that high official U.S. tax rates on foreign-sourced profits reduce the amount companies invest domestically in hiring and manufacturing.
Members of Sen. Carl Levin’s (D-Mich.) Permanent Subcommittee on Investigations are poised to pepper Cook with accusations that multinationals use accounting schemes to channel the maximum possible amount of profit through low-tax offshore jurisdictions as a massive tax-avoidance effort. (A 40-page memo released by the Subcommittee ahead of the testimony said as much.)
A reality in the middle
The reality, no surprise, is probably somewhere
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