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Thanks to a complex network of offshore accounts and cleverly named subsidiaries, Apple, the world's most valuable company, paid just $713 million on its $36.8 billion in foreign earnings last quarter. That amounts to a rate of just 1.9 percent, a figure that makes Mitt Romney's 14.1 percent effective tax rate look downright generous. And believe it or not, Apple actually reduced its foreign tax rate by nearly 25 percent as the company's market cap soared to new heights this year. According to the Associated Press, it was 2.5 percent at this time in 2011. Did Apple get a tax cut? Nah, it just got better at avoiding the IRS.

Apple is one of many major corporations that keeps its taxes low by stashing cash offshore. In reality, it's not as simple as just opening a bank account in the Caribbean and sending checks there every month. In order to get its rates down, Apple has actually set up subsidiaries and subsidiaries of subsidiaries in countries with low corporate taxes, and it shuttles funds between them in order to minimize its liabilities. The specific strategy that Apple uses is known as the "Double Irish with a Dutch Sandwich." This means that Apple directs its profits through two subsidiaries in Ireland -- Apple Operations International and Apple Sales International -- where corporate tax rates are about 12.5 percent compared to the 35 percent rate in the U.S. Some of the money goes through the Netherlands, due to some of Ireland's treaties with other European nations, to tax havens in the Caribbean.