Bob McIntyre is the Director of Citizens for Tax Justice, a liberal-leaning group that has produced a lot of very good studies on tax developments over the years. He appeared on CNBC to discuss the news story about Apple's ability to protect billions of dollars of profits from any country's taxes, using offshore tax haven subsidiaries. The video is available at this link.
By the way, the discussion includes a lawyer from Jean Pawlow from McDermott, Will & Emery who vigorously defends the rights of companies to minimize their taxes and says that Congress should fix it if they don't like it. McIntyre agrees, but notes that the problem is that companies like Apple and Dell and the other giant MNEs who make most of their money from their intellectual property have had too much power in being able to buy the laws they want from Congress. (Cook's testimony at the hearing is a perfect example--he wants Congress to pass a law making it even cheaper for Apple to achieve zero taxation).
The McDermott lawyer starts by quoting the famous Learned Hand 1935 statement to support the idea that it's just fine for big MNEs like Apple to minimize their taxes. What she's not telling you is that the quote comes in the case that was the progenitor of the notion of the economic substance doctrine--that what companies are supposed to do is run their businesses, and that they aren't supposed to use gimmicks WITH NO ECONOMIC SUBSTANCE just to avoid taxes. In essence, many of these MNE gimmicks for diverting profits from the US tax base should fail on economic substance grounds. After all, the MNEs usually have brought the profits back, they just don't get treated as bringing them back for tax purposes even though they invest them in US Treasuries and put them in US banks. Many of these "subsidiaires" have no non-tax business purpose: they exist only to avoid US taxes. Many are just shell companies that exist in mailboxes with no employees because they are run by the MNE's regular employees back at the US headquarters.
The CNBC interveiwers were spouting all the ideological lines of the Republican right--arguing that poor Apple wasn't repatriating its profits because of the "double taxation" on repatriation. McIntyre corrected that quickly (though they constantly interrupted him and never interrupted the McDermott lawyer): he noted that there is no such thing as double taxation in the sense they were using it because of the foreign tax credit that credits foreign taxes paid against the US tax that would otherwise be paid. Then there is the typical assertion that because Apple paid $6 billion in taxes, no one should ever question whether it is paying enough taxes or not. McIntyre didn't let that one by either. $6 billion sounds like a lot of money, but a number without a reference point is meaningless. What counts is what percentage of its profits Apple pays in taxes. And it is somewhere south of 13%, a very very minimal rate indeed when the statutory rate is 35%. Apple's gimmicks allowed it to escape any taxation whatsoever on about $74 billion of profits, so the $6 billion is a paltry amount.
Given the corporatist trend to court decisions, it is not surprising that so many lawyers think establishing a corporation that has no job other than to help its parent avoid paying taxes is just fine. Like anti-trust, tax law has reached a stage where the multinationals and their lobbyists call most of the shots. The Bush tax cuts were the icing on the cake, when corporate lobbyists got items that had been on their wish list for two decades with little or no hope of ever seeing the light. So we allow corporate consolidations (especially in finance) to reach the "too big to fail" stage and we allow global monsters to act as quasi-sovereigns who have no allegiance to any country and pay de minimis taxes in relation to their global profits. So yes. Tax lawyers have been setting up Dutch, Irish and Cayman companies in "double sandwich" and other structures for these purposes at least since the 1980s. But our system SHOULD view those as violations of the fundamental principle that a corporate entity must have a functional purpose with economic substance related to its business and not related to mere tax avoidance.