Senator Carl Levin and Tim Cook clash in tax haven hearing
Chairman of the Permanent Subcommittee on Investigations U.S. Senator Carl Levin (D) questions Apple Chief Executive Officer Tim Cook (front) about 'offshore profit shifting and the U.S. tax code' at a hearing on Capitol Hill in Washington, D.C., May 21, 2013.
Apple CEO Tim Cook was in Washington today, testifying before the Senate Permanent Subcommittee on Investigations.
The topic? Taxes. Specifically, how much Apple is paying on the $100 billion or so in cash that's held by its overseas subsidiaries. Cook says Apple isn't doing anything wrong.
"We pay all the taxes we owe -- every single dollar," Cook says. "We not only comply with the laws, but we comply with the spirit of the laws.”
The chairman of the committee, Sen. Carl Levin from Michigan, disagrees. He says Apple has moved money overseas and "as a result of that shift...they don't owe the taxes, but they avoid paying more taxes than they [should] pay."
Levin wants the public to know more about how large companies like Apple, Microsoft and Hewlett Packard avoid paying more in taxes. He says the purpose of the committee was to "shine a light on the tax code and how it functions with real people, real businesses. And what we learned is the real world situation is just totally unacceptable."
He's betting the attention on the tax loopholes will help stir his fellow Congress members to action.
"We've got 30 of our largest corporations in the world that earn $160 billion in profits that pay no taxes. And unless the public is upset about that [and] understands how companies are able to avoid paying taxes, then Congress isn't going to be put under the kind of pressure that Congress needs to be put under, in order to reform this system."
Levin won't seek re-election in 2014. The tax reform he is pushing for? He's not sure if it could happen before he retires.
"There are certain unjustifiable loopholes which should be closed and that revenue ought to go to deficit reduction or protecting our kids or protecting our health or protecting our skies," he says. "There's a lot of things we need to do, that we've cut back on."
Correction: An earlier version of this story incorrectly labeled Carl Levin in a photo caption. The text has been corrected.