Updated from 12:00 p.m. to include comments from Cook's testimony in the fifth paragraph.
NEWPORT BEACH, CALIF. ( TheStreet) -- Apple (AAPL - Get Report) CEO Tim Cook is appearing before Congress Tuesday, as reports show the tech giant used Irish subsidiaries to avoid paying taxes on more than $70 billion in profits over the past three years.
Apple, which has set up Apple Operations International, and sub-affiliates known as Apple Operations Europe and Apple Sales International, is being accused of avoiding paying taxes on $74 billion in profits. The practice is a by-product of the U.S. tax law, though Apple admits no wrongdoing in these tax practices, and several companies, including many other tech companies, employ the same strategies.
As part of his testimony, Cook, said that Apple is directly or indirectly responsible for more than 600,000 jobs, with 50,000 employees directly under the company's umbrella. Apple has helped create the "app economy," paying out over $9 billion to developers, with more than half of that coming in the past year. He noted that the success of the iPhone and iPad have enriched people's lives to the point where they don't know what they would do without them.Cook said that the tax laws have not kept up with the digital economy, and made recommendations on how to improve U.S. tax policy, despite the fact they would raise Apple's taxes. He noted that Apple does not use tax gimmicks, and has kept design and development of its products in the U.S. Apple has kept its innovation taking place in a single U.S. zip code, 95014, Cupertino, Calif., and generates billions of dollars in economic activity within the U.S. borders. The hearing is going on live, courtesy of C-Span. Apple shares were lower in Tuesday trading, off 0.49% to $440.77. -- Written by Chris Ciaccia in Newport Beach, Calif. >Contact by Email. Follow @Chris_Ciaccia
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts