Apple isn’t alone in drawing the committee’s ire: Last year, fellow tech titans Microsoft and Hewlett-Packard were the focus of another hearing on tax avoidance strategies. Apple holds some $100 billion in cash overseas.
The inquiry cuts right to the heart of several brewing debates in Washington. First are questions of equity in the tax system, where lawmakers find it hard to explain why a US-based company like Apple can negotiate a special 2 percent tax rate with Ireland for a chunk of its foreign profits, for example.
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.