Apple encouraged to borrow against its $94B in overseas cash for greater flexibility - Page 2

 

 

You are equating legality with morality. I never claimed Apple didn't pay the taxes it was legally required to pay. My point is that Apple might operate in the world, but it is a United States company. A US company that benefits from lobbying efforts that create loop holes in the tax law to give companies tax benefits regular citizens do not have. Further, these same tax laws encourage US companies to do business overseas at the expense of having it conducted in the US. The US government should not reward companies with tax breaks when they relocate operations overseas. Moreover, in the height of the economic boom in the eighties US companies lobbied Congress to do away with import taxes designed to keep industry and technological superiority in the US and with its democratic partners. This import taxes stood in place since the founding of this Country and was fully embraced by the people who created this Country. The economy has not recovered since. Now companies like Apple on top of all the other tax breaks and legal loop holes allowing for tax havens US companies get, want a tax holiday to repatriate their earnings that US tax payers helped provide in terms of the tax breaks they get? It is greed at its best. 

 

 

Further, the US spends billions every year to implement international laws that primarily benefit US companies. It spends millions sending out the US Trade representative to strong arm countries like Canada to enhance and enforce US IP interests at the expense of the wishes of people in those Countries. We fight wars so US companies like Apple have expanded markets to operate in. All this stuff is expensive, and US companies want more tax breaks? Bank of America, the largest Bank in the world doesn't pay any federal income taxes. 

 

I think it was Oliver Wendell Holmes who wrote, "Taxes are what we pay for civilized society." US politicians should shut down the tax loop holes companies like Apple enjoy. The IRS and State taxing entities spend little time policing big companies because of their lawyers. For instance, Apple has had several feuds with taxing entities. Apple tied both the IRS and the State of California up for over ten years on various tax matters. Here is an interesting article discussing how Apple operates to avoid taxes.  Essentially when you buy an iPhone, no matter where you live, the profit goes to Nevada where there is a zero percent corporate tax rate. It also routes money through several different countries to avoid taxes. Smart for sure, but not fair to the rest of us. 

 

 

Your view ignores the fact that 1) tax laws favor US corporations over regular folks, and 2) the US spends significant US tax payer money to protect and expand US companies interests abroad. 

What If Apple won't do it? Drop again ? If u expect sth happen , plz make it rise first . I hate aapl drops and drops coz of many made-up stories again and again .

Many complain about what Apple pays in taxes but I am sure that these same people including you take advantage of every deduction when filing tax returns, only an idiot would not. Apple does the same thing. If you and the politicians/government don't like it then change the tax codes/laws.

Excellent point! You simply 'use what you got', take what is rightfully yours.

Besides, here in Apple's case, they need the overseas money to pay for foreign investments, like their stores. And what good would it do to bring the money back? To put it all in one single account and get their bank-statements printed in landscape orientation¿

You're ignoring that Apple paid 2.5% of TOTAL US corporate income tax last year. They're paying plenty when compared to what everyone else is paying.

And Apple is not doing that lobbying - Apple's lobbying efforts are tiny - and mostly dedicated to social issues.

That's exactly the point I've made. It makes absolutely no sense to bring that money back until you need it. Let's say you have $10 B in England. You bring that money back to the US and pay $3 B in taxes, so you're left with $7 B. Now, you decide to make a $10 B acquisition in the UK. Oops - you have to send the $7 B back - plus $3 B from other sources. If you had left the money in the UK, you'd have the full $10 B - and be $3 B ahead.

It makes no sense at all to be moving money around until you need it or have a plan that requires it to be in a different country. If Apple decides to increase the dividend significantly, they might have to do that. With a stock buyback, I'm not sure how it works, but I think they also have to bring the money back. That is, I don't believe that Apple UK can legally own shares in Apple Inc, so the money would have to come back to the US and buy shares here. At least I think that's how it works.


Actually, as many columns as you wish (or, typically, one for each year you've been around). Balance sheets are typically set up with the periods (often quarters or years) in columns and the data in rows (Assets, liabilities, etc, etc). And the number of rows can vary quite a bit - depending on the business and how much detail they want to submit to the SEC.

If you're buying something, it's not an issue. In essence, you send $1,000 overseas and get $1,000 in product in return. The situation being discussed here is quite different. You're actually transferring earnings back to the US - which can trigger tax consequences.

Erm ... Apple is 9th out of 25 in taxes paid by Corporations.

http://www.forbes.com/sites/christopherhelman/2012/04/16/which-megacorps-pay-megataxes/

 

 

9. Apple

Income taxes paid: $4 billion

Total revenue: $128 billion
Net income: $33 billion
Effective tax rate: 24.6% 
Data: Thomson Reuters Fundamentals via FactSet Research Systems.

 

And what in your post are you pretending proves him wrong?

 

No, that isn't an excellent point! He was simply changing the subject to benefit his and, apparently, you view. The guy said we need to close the loopholes so that certain companies can't gain advantage over others. Of course everyone takes advantage of what's given to them, but when there's an obvious flaw in the tax code, it needs to be fixed.

 

And comparing the types of deductions and write-offs the average person making $50,000/yr gets to the types of deductions, money-funneling allowances, and tax incentives a multi-billion dollar industry gets is an exercise in senselessness.

You forget that almost all public corporations are "owned" by shareholders, many of those shareholders are "average" people.

 

Many compare companies/corporations to individual people, but they forget that a corporation is an entity that by definition has different legal status than a person.

 

Are you saying that people and companies should be subject to exactly the same laws & codes?...or would you like to cherry pick just specific ones, like the international tax laws?

Putting the hyperbole aside for a moment, I think all that was suggested in the OP was that Apple *could* repatriate some portion of its cash by using "borrowed" money, rather than using the money as it's currently held. And by doing it that way, other than the transaction costs, minimal interest costs and currency conversion fees and risk, Apple (and its shareholders) would be better off than if it simply repatriated the overseas cash and paid the taxes to the U.S. Treasury. Again, that's assuming that Apple would want to increase the dividend or buy back shares and tap this overseas cash. No need for all of the drama.

 

Even for us regular folks, you'll find that the source of funds often dictates how tax laws apply. Let's say I have all of the money necessary to buy a new car. I can buy a car and pay cash for it, and generally, I won't be able to deduct anything on my taxes. Or I can borrow from the bank or dealership, using the car as collateral, and again, I generally can't take a deduction. Or... I can deposit my money into the bank, borrow the money for the car from that bank and use my house as collateral. By making the loan a mortgage or home equity loan, I will be able to deduct some portion of the interest costs on that loan.

 

I really don't know exactly what Apple would need to do to accomplish this though. I'd be curious to know if Apple could borrow whatever money its deems necessary from a U.S. bank, use (any or all of) the overseas accounts as collateral (not that Apple would need collateral, have to submit to a TransUnion credit check or get a co-signer before getting a loan approved), distribute the cash and then pay the loan off the next day??? Or would Apple incur a tax hit for repaying the loan to a U.S. bank using the overseas cash? Would they need to borrow the money from each bank in each country where the money is held? I'm truly curious how these tax laws work with respect to these sorts of international transactions.

You sure are good at knowing what someone else thinks. Nowhere did your boyfriend clearly state what you say he meant. All of us non clairvoyants are going off what he wrote. Happy you can mind meld so well. Please, continue to defend one loudmouth against the rest of the Internet. Do you owe him money or something?