I would say that what we really need to do is apologize to Apple, compliment them for the job creation they are doing, and get about doing our job.

You are going to pay--Apple Inc. is going to pay the taxes on the income for all the parts of the world except for where two-thirds of the profits are created.

I do not consider deferral to be a sham or abuse in any kind of way.

As a practical matter, you would agree that it is functionally managed and controlled in the United States?

The question is whether we should continue to tolerate this state of affairs, which is doing tremendous harm to our Nation's fiscal health.

But there is no income--there is no tax paid on the money itself that has been sent to Apple.

This is the first time that we have ever come across entities that have no tax residence.

And if Apple can create companies with no tax residence and create profits in those companies, and if that is going to be tolerated, couldn't all U.S. multinationals in effect do the same thing--eliminate the corporate tax for our…

Is it fair to say that they were withdrawn because of pressure from the Hill, Capitol Hill, and business interests?

Well, from our perspective, from what we have seen, it is rare.

This Subcommittee is about investigating a Tax Code that is not working for the American people, is not working for businesses in this country.

What is the impact on U.S. tax revenue if U.S. multinationals can enter into cost-sharing agreements with offshore companies that they control and then direct most of the profits to those offshore companies?

Do we have or do you have an obligation to stop multinational corporations from shifting income to tax haven jurisdictions?

Avoiding paying taxes in this country to me is not right. The American people know it is not right.

Is that an arm's-length agreement?

Thank you very much, Senator McCaskill.

Is the purpose of your regulation that they meet arm's-length standards?

You have an agreement which shifts the economic rights, the most valuable thing you have, to three Irish companies that pay no taxes.

There is a huge drain as a result.

You shifted your intellectual property there. That is your choice.

I think we should take the President up on his offer to do corporate tax reform.

I think it is clear that Apple engages in tax gimmicks.

There is no effort to vilify anybody. We are trying to shine a spotlight on the practices of a big company.

We cannot continue a system where the company, a multinational company, as phenomenally successful as yours, and deservedly so, can make a decision, sitting down in 2008 and 2009, as to where the profits are going to flow.

I could not disagree with you more. Of course you shifted something, the most valuable thing you have.