That question of tax fairness is of particular importance in today’s tight fiscal times, with lawmakers straining for ways to find new revenues in politically palatable ways or reduce spending without cutting into core government functions from military spending to the social safety net.
In the long run, the issue of how the nation should structure corporate taxation is a key piece of America’s global competitiveness, an issue often raised by tax reformers like Sen. Max Baucus (D) of Montana and Rep. Dave Camp (R) of Michigan, the chairs of the tax-writing committees in the Senate and House. They want to close tax deductions and lower tax rates for both individuals and corporations – and shift most corporate profits earned abroad into a lower tax threshold than the 35 percent rate that hits many private sector bottom lines today.
But Senators Levin and McCain are wary of focusing either on the comprehensive fix sought by Chairmen Baucus and Camp or the “grand bargain” pursued by President Obama and congressional leaders in years past, which they see as an excuse for delay.
“Every lobbyist in this town comes to my office and tells me, ‘We’re all for closing these loopholes, we know they are outrageous, but we must wait until we have a grand bargain ... because revenues have to be balanced by entitlement reform.’ It’s a cop out. It’s an absolute cop out,” McCain told reporters Monday.
“Why should we continue to allow an egregious practice like this to continue on and wait until we have a grand bargain which may never happen,” he continued. “When you see egregious activity like this, why wait?”
In its prepared testimony, Apple disputes that anything egregious is going on at all.