Professor Stephan E. Shay of Harvard Law School claimed during his testimony that changing the rules that Apple utilized to exploit the tax system would actually increase economic growth.
Shay claimed that the revenue lost makes the national debt worse and undermines public confidence in the tax systems. He claims that restoring the lost revenue would support job-creation through investment in the short term and reduction of the deficit in the long term.
Once again the point was made that even with the negotiated tax rate of 2% it still paid “well below 1%” of actual taxes on the income that it sent overseas through international arm length transactions. He made the point that this strategy is unavailable to domestic corporations, small business, and individuals, who must make up the shortfall due to the action of international corporations.
He went on to claim that the U.S. international tax rules are out of balance, too soft on international low-tax foreign income to the disadvantage of domestic business. He applauded the committee for bringing to light these complicated tax systems.