04/17/2012 10:37 am ET Updated Jun 17, 2012

The World's Richest Company Pays a Lower Tax Rate Than You Do

My job involves spending most of my time trying to figure out how those with the least can begin to build a bit of wealth and start to acquire a small piece of the American dream. That means trying to find ways to level the playing field, so that all families and communities have enough access to the assets and capital that they need in order to buy a home, start a small business, or send their kids to college.

But sometimes I get a jolting reminder of just how un-level the playing field really is. Just such a reminder arrived recently in the form of a new report from two of my Greenlining Institute colleagues, titled "TECH UNTAXED: Tax Avoidance in Silicon Valley, and How America's Richest Company Pays a Lower Tax Rate than You Do. "

That title is no exaggeration.

You've perhaps heard of a company called Apple that's been rather successful of late. You may well be reading this column on one of Apple's wildly popular electronic gadgets, which sell in breathtaking numbers in the U.S. and around the world.

Apple is up to its eyeballs in money, earning over $34 billion in profit last year. Its market capitalization -- the total value of the company's stock -- recently rocketed past half a trillion dollars and has hovered around the $600 billion mark. That's more than the gross domestic product of Saudi Arabia, the world's richest oil economy, not to mention a bunch of other countries.

And Apple paid a lower federal income tax rate last year than the average California schoolteacher.

That's right, a company worth more than many medium-sized countries pays a lower tax rate than most cops, teachers, nurses, etc. Apple's 2011 tax rate of 9.8 percent was lower than that of American households making an average of $42,500 per year. And the tax rate paid by America's wealthiest company has dropped like a rock lately, plunging from 24.8 percent in 2009 to 14.7 percent in 2010 and 9.8 percent last year.

Wouldn't you like to make your tax rate do that, even as your income skyrockets?

Sorry, you can't.

In fairness, I should say that Apple is hardly alone. My colleagues actually looked at 30 of America's top tech-focused companies listed in the Fortune 500, including most of the industry's heavy hitters: Google, Microsoft, Oracle, HP, etc. Most of them do something you can't: Taking advantage of the fact that U.S. law exempts foreign profits from taxation until those profits come "home" to the U.S., they use a variety of devices and gimmicks to shift profits to their offshore subsidiaries, outside the reach of the IRS.

Many of these subsidiaries are in notorious tax havens like the Cayman Islands. Some of them exist entirely on paper, with no physical office.

There's been much talk about the tax system of late -- some of it actually useful, such as discussion of the so-called "Buffett rule" to require individuals with million-dollar incomes to pay a reasonable tax rate. But efforts to curb abuse of offshore tax havens, such as the Stop Tax Haven Abuse Act introduced in Congress last year, have gone nowhere. And a high-powered corporate lobbying campaign, led by many of these same tech companies, is pushing legislation to let companies bring their offshore cash into the U.S. at a drastically reduced tax rate -- essentially a Christmas present to Apple and Google paid for by you and me.

No one begrudges companies like Google and Apple their success. They've created terrific products and deserve to make a healthy profit. But in an era when millions of families are struggling and the simple dream of owning one's own home or sending the kids to college is slipping out of reach of so many, it's not too much to ask them to pay their fair share.