White House fears U.S. taxpayers will pay for Apple tax bill

EU ruling not fair to U.S. taxpayers, says Obama administration

The White House today said it was worried that American taxpayers would pay for the European Union's decision to force Apple to pay more than $14 billion in back taxes.

"It's also possible that the kinds of payments that are contemplated by the EU decision today, at the end of the day, are merely a transfer of revenue from U.S. taxpayers to the EU," said White House spokesman Josh Earnest in a Tuesday press briefing. "That's the crux of our concerns about this [unilateral] approach."

If Apple was required to pay billions in back taxes to Ireland, it could then deduct those payments from what it owes to the Internal Revenue Service (IRS), either retroactively or in future returns. Those deductions, in turn, would reduce Apple's tax bill to the U.S. government, lowering the amount collected by the IRS.

Theoretically, that would mean U.S. taxpayers would have to make up the difference, or the government would simply have to go without those monies.

"The consequences for that transfer [are] that it could be treated in the U.S. tax system as a current tax payment that would allow, essentially, Apple to deduct that EU tax payment from their U.S. taxes," Earnest added as he answered a reporter's question. "That wouldn't be fair to U.S. taxpayers."

According to European Commissioner Margrethe Vestager, Ireland -- an EU member -- must recover $14.5 billion (€13 billion) in back taxes for the years 2003 to 2014. Ireland, however, has indicated it will appeal the ruling.

Apple has also said it plans to appeal. In the meantime, however, it will almost certainly be required to place a large amount -- Ireland was told by the EU to determine that amount -- in an escrow account.

Although Apple CEO Tim Cook didn't voice the same concerns as did the White House, he came close. "At its root, the Commission's case is not about how much Apple pays in taxes," Cook wrote in an open letter published on the firm's website. "It is about which government collects the money."

Join the PC World newsletter!

Error: Please check your email address.

Tags Apple

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gregg Keizer

Computerworld (US)
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?