Tax avoidance has become a lightning rod as the presidential campaign has taken on a strong populist cast, and leading Republicans and Democrats in Congress have demanded that companies pay their fair share.
Both Hillary Clinton and Donald Trump have vowed to crack down on deals that allow companies to relocate their headquarters overseas to lower their tax bills, and the Treasury Department has made limiting international loopholes a priority.
“It’s remarkable to think that the administration has been flying over to Brussels on taxpayers’ dollars to lobby the European Union against collecting taxes owed in Europe when they’re not collecting the taxes owed here,” said Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency Coalition.
The Business Roundtable, a lobbying organization for America’s largest companies, called the move a “reckless and dramatic overreach” and an “act of aggression” against a company and a sovereign government.
In Congress, lawmakers in both parties have urged the Treasury Department to be tougher on European officials as they aggressively investigate what they call undue tax benefits given by member nations to leading U.S. companies.
Members of the Senate Finance Committee sent a letter in May to Jacob Lew, the Treasury secretary, urging him to consider retaliation that would include doubling taxes on companies and individuals in Europe.
The bipartisan “consensus” that the corporate tax rate should be cut in exchange for loophole closures emerged in President Obama’s first term, yet Congress has not drafted a bill, much less voted on one.
Reuven Avi-Yonah, who directs the international taxation program at the University of Michigan Law School, said that the European Union had a strong case for collecting the taxes from Apple and that if the situation were reversed, Americans would be clamoring to collect taxes from a foreign company.
Carl Levin, D-Mich., who was chairman of the Senate Permanent Subcommittee on Investigations when it examined Apple’s use of tax havens in 2013, said the European Commission should fill the vacuum left by lackadaisical tax enforcement in the United States.
