Apple's calls for repatriation tax holiday gain no traction with White House
With some two-thirds of its cash hoard housed overseas, Apple would like a tax holiday to allow it to move that money back to the U.S., but its pleas have fallen on deaf ears at the White House.
With $64 billion in cash remaining offshore, Apple executives said during a conference call on Monday that they have no plans to bring that money back to the U.S. because of taxes. For some time now, Apple has lobbied the U.S. government for a tax holiday that would give the company an incentive to bring that money stateside.
"Repatriating the cash would result in significant tax penalties," Apple Chief Financial Officer Peter Oppenheimer said. "The tax laws currently allow for a significant disincentive. We've expressed our views to Congress and the White House."
But despite Apple's pleas, both behind the scenes and public, White House officials are not interested in offering a "repatriation holiday" for corporations to bring overseas funds stateside, according to Talking Points Memo.
"A White House official told TPN that the Obama Administration specifically chose not to propose a repatriation holiday — a temporary tax break on overseas cash brought back to the U.S., which Apple and other tech companies have sought for years," Carl Franzen reported.
"Instead, the official told TPM that the White house in late February put forth 'a comprehensive corporate tax reform plan that simplifies the code, levels the playing field for American businesses and encourages investment here at home.'"
While Apple's interest in a tax holiday hasn't gained traction at the White House, the iPhone maker has found some support in Congress. Specifically, Democratic Senator Kay Hagan of North Carolina has been a key proponent of the Foreign Earnings Reinvestment Act.
"(This week's) announcement by Apple only highlights the need to pass common-sense legislation that would allow American companies to put $1 trillion of foreign earnings back to work in the U.S. economy," Hagan reportedly said. "our stagnant economy demands practical, creative and bipartisan solutions right now."
Hagan's plan, which has gained support from Republican Senator John McCain, would allow companies to return their profits to the U.S. at a temporarily reduced tax rate. Hagan believes it would trigger the flow of $1 trillion back into the U.S. economy.
[ View article on AppleInsider ]
Comments
Two choices:
$0 of the $60,000,000,000 with current tax rate or
$x of the $60,000,000,000 with a lower tax rate
That $x multiplies when it's injected in this nation's economy.
.
Apple made a LOT of money exporting jobs and manufacturing overseas. It seems fair that some of that money should be taxed on its way back to the U.S.
These types of holidays make no sense. In fact they make things considerably worse. If companies know that congress will grab their ankles and grant a tax "holiday" every few years, the companies will *never* bring any cash home during the off years. All revenue would be lost from global corporations forever.
Very true. The real solution is to have a more competitive (lower) corporate tax rate in the first place so they keep their money here (and pay taxes here) instead of overseas. You get more money into the economy, and you even get higher revenue despite the lower tax rate. (A smaller percentage of a much bigger pie.)
Apple made a LOT of money exporting jobs and manufacturing overseas. It seems fair that some of that money should be taxed on its way back to the U.S.
I tell my kids all the time, that life isn't fair.
So, while it may not seem "fair" to you for Apple to move their legally earned money to the U.S. without paying taxes, the fact is that having the money in the U.S. would be beneficial to the economy. They would spend it, they would save it, they would do something with it that would generate employment and taxes.
And, since there is nothing to prevent them from leaving it right where it is, I'd rather they were able to move it here without the "penalty" of taxes.
(pulls up chair, makes some popcorn)
-kpluck
Nothing is stopping Apple from investing it's money in the US. How about starting by, I don't know, investing money in the US? One great way to invest money in the US is to bring that money back to the US and paying rightful taxes on it. It's not like they couldn't afford it and it's not money lost either. The states is trillions of dollars in debt in part because companies keep sending jobs overseas due to greed.
And the other part is because they're spending wildly beyond their tax revenue...
Apple made a LOT of money exporting jobs and manufacturing overseas. It seems fair that some of that money should be taxed on its way back to the U.S.
What jobs were exported? What US company could do what Foxconn does? Where in the US can you get the Sony camera component made? Or the Qualcomm baseband? Of the Toshiba NAND flash? Or any number of components that are designed and made by companies outside the US?
Is it really fair to have all parts of a product shipped to the US to be taxed just to have it shipped back out? Is it really fair that a company has paid taxes in the country for products sold then be required to pay more taxes to a country in which those products were not sold?
There is no law requiring Apple to bring overseas profits back to the US just as there is not law requiring the US government to allow overseas profits to come back to the US untaxed. If the US government doesn't see a benefit from having a $1 trillion influx brought back into the US and getting some taxes instead of no taxes then that is their prerogative, too. I don't think the latter makes sense but it's not my call.
http://online.wsj.com/article/SB1000...022129888.html
One term president- so said Steve Jobs.
Apple made a LOT of money exporting jobs and manufacturing overseas. It seems fair that some of that money should be taxed on its way back to the U.S.
Most industrialized countries do not tax foreign sourced corporate income that has already been taxed in the foreign country. Only the US does that.
This US practice actually discourages job creation at home because it is an incentive for corporations to use foreign incomes to invest in foreign countries rather than in the US.
Unless you are prepared to make it mandatory that US corporations bring home all foreign earnings (and I don't know if that's administratively and politically realistic), then you have to lure these earnings to the US if you want them to be brought here.
you get the idea. If you really think it's about corporate greed for everyone you'd be wrong. Some companies will apsolutely exploit a holiday for corporate greed. But honestly, I don't think that's apple's and some other companies intentions at all. I bet they'd love to bring some money back here and get some more US side stuff fired up.
These sales come from non-US consumers. That's part of the global economy. They can go the Microsoft route and purchase a non-US entity like Skype. That means the money still won't go into the US. I'd rather have them get the money into the US and have them use it in the US rather than having it just accumulate outside of it.
Apple made a LOT of money exporting jobs and manufacturing overseas. It seems fair that some of that money should be taxed on its way back to the U.S.
Apple has made a lot of money by selling their products overseas and has been taxed on those earnings. Bringing it back to the US of A would result in additional taxation.
Apple made a LOT of money exporting jobs and manufacturing overseas. It seems fair that some of that money should be taxed on its way back to the U.S.
+1 (except for the "exporting" bit...).
I love Apple, but I have as much sympathy for them on this issue as I do for millionaires complaining about their income taxes. I'll take that dilemma over the alternative, any day...
Two choices:
$0 of the $60,000,000,000 with current tax rate or
$x of the $60,000,000,000 with a lower tax rate
In other circumstances this might be considered blackmail.
But, if they did pay taxes already (be it in another country), then why on earth should they be penalized if they wish to repatriate it? Again, I am no expert.
I tell my kids all the time, that life isn't fair.
So, while it may not seem "fair" to you for Apple to move their legally earned money to the U.S. without paying taxes, the fact is that having the money in the U.S. would be beneficial to the economy. They would spend it, they would save it, they would do something with it that would generate employment and taxes.
And, since there is nothing to prevent them from leaving it right where it is, I'd rather they were able to move it here without the "penalty" of taxes.
Your argument cuts both ways. Apple (like any "person") benefits from our society - rule of law, infrastructure, etc. So it's "fair" that they repatriate cash and pay taxes on it, not park it offshore where it benefits no one except a few already-wealthy money managers.
The current issue here is the HIGH tax rate. Lowing the tax rate on foreign money will encourage domestic investments once companies like Apple bring back profits from overseas.
Two choices:
$0 of the $60,000,000,000 with current tax rate or
$x of the $60,000,000,000 with a lower tax rate
That $x multiplies when it's injected in this nation's economy.
.
Or it will encourage shipping more jobs overseas because it turns out you can both jack up profit margins and pay lower taxes to boot.