Apple's tax: America and Europe should work together to make it and other multinationals pay up

The US is threatening retaliation, claiming the EU is targetting US companies with its tax probes. But both sides should team up on behalf of their citizens rather than battling for corporations loyal only to shareholders

US Treasury Secretary Jack Lew has threatened retaliation if EU orders Apple to pay back tax (Retuers)

There’s a certain irony in the US criticising the EU for behaving as a “supranational” tax policeman given the way that banks and businessmen have both fallen afoul of the US behaving as a supranational fraud and sanctions cop.

I have no sympathy with the majority of those collared by the long arm of the US law as a result of this. Given the weakness that, say, the UK authorities can sometimes show in the face of white-collar crimes and misdemeanours, the aggressive stance of the US can sometimes be rather useful.

However, it does mean that the US is throwing stones from a glass house when it levels the same accusation at the EU over tax. And just as with the US fraud cops, if the EU is indeed behaving as a suprantional tax watchdog, then more power to it.

The background to this is the EU's probe into the Double Irish and the Dutch Sandwich and their various offshoots and derivatives, used by multinationals to shift profits from higher to lower tax jurisdictions within the EU.

The US is unhappy that most of the companies in the EU’s crosshairs are headquartered in America. Apple, Starbucks and Amazon being the most often mentioned, but the Italian headquartered Fiat has been under the cosh as well.

The Americans are worried that Apple, for example, could get stung with a $19bn (£14.4bn) bill for back taxes as a result of its alleged “sweetheart” deal with Ireland. Both parties deny it is anything of the sort, but the EU is unconvinced and you can see why when tax rates of 2 per cent have been bandied around.

Now if that $19bn figure – calculated by investment bank JPMorgan – is correct and is demanded, the Americans claim that Apple could potentially offset it against its US tax bill. They characterise this as a vast wealth transfer from Uncle Sam to bad old Brussels. They go on to speculate that others could then follow the EU’s lead and have threatened retaliation.

Is it worth worth noting at this point that presidential and congressional elections are fast approaching and that Democrat Hillary Clinton faces a bellicose nationalist in the form of Donald Trump?

Going into bat, or should that be stepping up the plate, for great US companies under attack from the whinging big government socialist milksops in Brussels could easily be seen as an attempt by the Democrat administration of President Obama to look every bit as tough as the Donald.

You don’t need to worry, Main Street, USA, the current Pres is battling for US interests and if the next one is Hillary she’ll do the same!

Meanwhile Apple has upwards of $200bn stashed offshore where the US authorities can’t get their hands on it. You see, the US is losing out from Apple’s aggressive approach to tax planning just as much as the EU is. Perhaps more so. Regardless, the citizens of both jurisdictions suffer when multinational companies avoid paying dues that could be used to build roads, bridges, schools, and so on.

The truly patriotic approach on the part of both sides would be for them to put their heads together with the aim of finding a way to make multinationals pay because, ultimately, Apple is no more American than Fiat is Italian. They and their peers are loyal not to any country or to any trading bloc but to their multinational shareholders and executives. They will put their interests before any supposed “national” interests every day of the week and twice on Thursday.

So you go ahead and wrap yourselves in your flags, Treasury Secretary Jack Lew and competition commissioner Margrethe Vestager, if that’s what you want to do.

But after you’ve done that, how about you go out and do the patriotic thing and work together to ensure that both your respective peoples benefit from the tax revenues that are rightfully theirs. You know it makes sense.