US Tax Code May Allow Dramatic Retaliation in EU Apple Case

U.S. tax laws give the Obama administration power to double tax rates for European companies doing business in America should it choose to dramatically escalate a dispute with the European Union over Apple's $14.5 billion tax bill, Reuters reported.

Section 891 of the U.S. tax code, passed in 1934 but never used, allows the president to double tax rates for citizens and corporations of any country the administration considered was discriminating against U.S. companies.

Experts said the administration was unlikely to take such a drastic measure, and even if it did, courts might strike down that action because of treaties.

"This is an option that is viable only in the minds of a handful of analysts who seem willing to put the entire global trade order at risk," said Edward Kleinbard, a professor at the University of Southern California in Los Angeles.

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