The US treasury department saw it coming. In a White Paper published shortly before the European Commission's Apple decision, it warned that one impact of the commission forcing American companies to pay back taxes was that it could lead to these companies paying less tax in the US.
It continued: “ If so, US taxpayers could wind up eventually footing the bill for these state aid recoveries.”
Apple said in a filing with its latest results that if it did have to pay extra taxes as a result of the commission ruling – and it continues to argue that it is confident of winning its legal case against the commission – then it believes this is exactly what would happen. Higher European taxes would allow it to claim a credit against future US payments. More tax for Ireland, in other words, would mean less for Uncle Sam .
This is the real political pinch point of the tax row. The US treasury is upset about US companies being unfairly targeted. But it would be even more upset about the idea of the US exchequer losing money.
There is more than €2,000 billion of cash from big US companies sitting offshore. One issue in the presidential campaign is whether special tax incentives could be put in place to get this money home – with the tax dollars used to invest in infrastructure such as highways. What if this potential tax windfall was offset by tax credits claimed due to tax paid in European countries such as Ireland by companies such as Apple? If this happens in the Apple case , you could wonder what the welcome in the White House would be like for the Irish Taoiseach the next St Patrick's day.