Quote:
Originally Posted by
rtdunham 
This is clearly a complex situation. But don't those profits exist overseas because Apple and other companies exported the jobs, and paid for work that yielded no benefits to the US in terms of materials sourcing, jobs, the multiplier effect of wages, or the income taxes that would have been paid by US workers? Like I say--it's complex--but it doesn't seem like good policy to embrace corporate behavior that costs the US in all those ways on the front end, and then lower taxes for the same corporations on the back end. I'll try to keep an open mind.
Apple may make higher profits for having moved manufacturing offshore, but that doesn't generate income and thus taxes.
Here's what built that big hoard of cash oversees. A guy in England buys an iPad from a store in England. It ships from China, maybe spent some time in a warehouse in Germany. Apple UK, a division of Apple, Inc., reports the sale to the tax people in the UK, pays VAT taxes, payroll taxes for the UK employees, and then UK income tax based on the profit left over. Combine a lot of people in England, France, Germany, Japan, South Korea, now China, etc. etc. and you get a big pile of cash sitting offshore, all earned outside of the United States.
That money may move from banks to different countries in the EU, spent in developing countries, etc. For all those other countries, taxmen say "Hey, that money, how much of it was earned in our country, and did you pay taxes" and being told it is so, is satisfied.
Unless they want to move those to the United States, for investment here, or a major acquisition, or just to distribute to the stockholders. Here, the IRS says "Hey, you owe us tax on that. We don't care that none of it was earned here, you want to spend it here, you must pay tax."
So Apple has two choices for the money. They can leave it in Europe, investing it or getting interest or using it to do things like build a factory or a server farm, and they can use all the money that way. Or they can bring it to the US, take a big tax hit, and only invest the remainder here.
What is the moral claim that the American government has on profit from sales in the UK? It doesn't really matter, the American government has the guns and based on the comments here and elsewhere, it's clear that enough of the citizenry doesn't care about a moral claim so long as "we" get the money. This taxation on economic activity taking place outside of the U.S. is going to happen, whether it's right or wrong. So we're down to arguing the pragmatic view, what's the best way for America to benefit from that guy who bought an iPad in the UK.
