Top members of Congress from both parties did not hesitate to criticize the European Union’s move Tuesday morning to force Apple to pay $14.5 billion in taxes it found the company underpaid thanks to a sweetheart deal with Ireland.
Kevin Brady, the Texas Republican who is chairman of the House Ways and Means Committee, called the European Commission’s decision “a predatory and naked tax grab.”
While some liberal U.S. tax analysts have faulted the Obama administration for siding with Apple and resisting an EU determination that Ireland unfairly helped the company, top Democratic lawmakers voiced opposition to the decision.
“This is a cheap money grab by the European Commission, targeting U.S. businesses and the U.S. tax base,” said Sen. Charles Schumer of New York, who is expected to lead Senate Democrats next year.
“By forcing their member states to retroactively impose taxes on U.S. companies, the EU is unfairly undermining our ability to compete economically in Europe while grabbing tax revenues that should go toward investment here in the United States.”
Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee with oversight of taxation, warned that Tuesday’s “ruling could set a dangerous precedent that undermines our tax treaties and paints a target on American firms in the eyes of foreign governments.”
Wyden noted also that the ruling could mean trouble for U.S. taxpayers. The Treasury taxes companies for profits earned overseas, but allows a credit for taxes paid to foreign governments.
The lawmakers said that the ruling highlights the need for reform of U.S. taxation of international profits, which is an unusual setup among developed nations.
While both Republicans and Democrats have agreed that they need to remove the incentives for multinationals to move their headquarters out of the U.S., legislators failed to reach an agreement on an alternative system over the past few years.
