Apple noted that it employs tens of thousands of people in the United States and claimed that it is likely the country's largest corporate income tax payer. Apple paid nearly $6 billion to the U.S. Treasury last year and expects to pay $7 billion this year, in addition to state sales taxes.
“As a result of its international success, Apple has accumulated significant amounts of cash outside the U.S.,” the company said in the written testimony. “Apple carefully manages this foreign, post-tax income to support its foreign operations through a corporate structure that protects and promotes the interests of its shareholders. Current U.S. corporate income tax law severely discourages the use of these funds in the U.S. by imposing a 35 percent tax on repatriation.”
At a press conference on Monday, Sen. Carl Levin (D-Mich.), the subcommittee's chairman, said that Apple successfully "sought the Holy Grail of tax avoidance."
"It created offshore entities holding tens of billions of dollars, while claiming that it was a tax resident nowhere,” he said.
He acknowledged that there is no evidence that Apple violated the law, but he said he wanted to draw lawmakers' attention to the loopholes that Apple is exploiting.
Sen. John McCain (R-Ariz.), the subcommittee's ranking member, accused Apple of orchestrating an "egregious and really outrageous scheme."
The senators argued that Congress should not wait for comprehensive tax reform legislation to close the loopholes.
"No where when this tax code was written was it ever envisioned tax dodging in the fashion that Apple and other multinational corporations have been able to orchestrate," McCain said. "We intend to make sure the American people and our colleagues in Congress are aware of these egregious practices."
Tuesday’s hearing will be the first time that Cook has testified before Congress. He will be joined by Chief Financial Officer Peter Oppenheimer and Phillip Bullock, who heads the company's tax operations.
The other witnesses will be Harvard Professor Stephen Shay, Villanova Professor J. Richard Harvey, Assistant Treasury Secretary for Tax Policy Mark Mazur and Internal Revenue Service Director for Transfer Pricing Operations Samuel Maruca.
Coalition urges FCC to limit auction bidders: A coalition of companies and consumer advocates urged the Federal Communications Commission on Monday to limit the amount of spectrum that AT&T and Verizon can buy at the upcoming auction.
The letter was signed by Sprint, T-Mobile, Public Knowledge, Free Press, C Spire Wireless, US Cellular, the Competitive Carriers Association and others.
The letter echoes the advice of the Justice Department's Antitrust Division, which warned that allowing the two largest wireless carriers to buy up the most valuable spectrum could stifle competition and lead to higher prices for consumers.
AT&T has warned that the Justice Department's advice would rig the auction in favor of smaller carriers and would limit government revenue.
"A robust and competitive auction structure that promotes broad bidder participation is likely to enhance revenue for the U.S. Treasury while simultaneously furthering Congress' pro-competitive goals for the wireless industry and for American consumers," the coalition wrote in its letter.
Chinese hackers accessed sensitive Google database: A Google database that stored years of information about surveillance orders was breached by Chinese hackers a few years ago, according to a report from The Washington Post.
The hackers appear to have been trying uncover which Chinese intelligence operatives based in the U.S. may have been under surveillance by U.S. law enforcement, according to The Post, citing current and former government officials.
The Senate Judiciary Committee will resume marking up the Gang of Eight's immigration bill. Senate Judiciary Chairman Patrick Leahy (D-Vt.) wants the committee to finish marking up the bill this week.
The House Energy and Commerce Committee will hold a pair of back-to-back hearings on cybersecurity Tuesday. In the morning, the full committee will hold a hearing that looks at the steps the federal government and private sector are taking to protect the country's critical infrastructure from cyberattacks. Later in the day, an Energy and Commerce subcommittee will examine how the communications industry ensures the security of its supply chain.
The House Science, Space and Technology's subpanels on research and technology will examine current and future applications of biometric technologies at a Tuesday hearing.
IN CASE YOU MISSED IT
Sen. Hatch: No deal yet on tech-backed H-1B amendments: Sen. Orrin Hatch (R-Utah) said Monday afternoon that he still has not reached a compromise on a package of his amendments to the Gang of Eight immigration bill that covers H-1B visas for highly skilled workers with Sen. Charles Schumer (D-N.Y.).
"We have a good chance of maybe getting there by tomorrow, I don't know. We'll have to see. Right now, we're not there," Hatch said.
Senate report: Apple using shell companies to dodge taxes: Apple has funneled money through three offshore companies to dodge billions in taxes, according to a Senate report released on Monday.
The report from the Senate Permanent Subcommittee on Investigations found Apple's three subsidiaries had no official tax residence, meaning they paid little or no taxes to any government.
Moble app developers blanket Capitol Hill to press for immigration reform: The Association for Competitive Technology has flown 50 chief executives of mobile app development companies to Washington this week to press for immigration reform and improvements to the country's math and science education programs.
The chief executives of these small- and medium-sized mobile app companies will hold nearly 150 meetings with lawmakers, Hill staffers and the administration on Monday and Tuesday to discuss the Gang of Eight's immigration bill and forthcoming immigration reform legislation in the House. The executives hail from around the country.
Mignon Clyburn becomes first woman to lead FCC: Mignon Clyburn became the first woman to lead the Federal Communications Commission (FCC) on Monday.
But her tenure will be short-lived, as she is only serving as acting chairwoman until the Senate confirms the president's nominee, Tom Wheeler.
AFL-CIO picks fight with Google, Facebook over immigration bill: The nation's largest labor federation on Monday rallied opposition to changes in the Gang of Eight's immigration bill that are being pushed by the tech industry.
In an email alert to immigration activists, the AFL-CIO panned a series of tech industry-backed amendments from Sen. Orrin Hatch (R-Utah), arguing they would "undercut protections for both aspiring citizens and U.S. workers."