Originally Posted by nollam
There seems to be a lot of misunderstanding (or just misrepresentation) on this topic. Apple *has* paid tax on its overseas earnings, it pays tax in each of the jurisdictions in which it operates. What AAPL is wisely trying to avoid, is a double-taxation situation where it will have to pay *again* on revenues it returns to the US.
You may be of the opinion that AAPL should pay tax multiple times on its profits, but that will put APPL in an unfair position when competing in the global market.
Actually, that whole portion of your post shows a big misunderstanding of how offshoring works. Apple sold over 40% of its products in the US. They did not claim anywhere near 40% of their profits in the US.
Apple makes things on the cheap in China. They sell them for a hefty price in the US. They should be taxed on that profit in the US.
A simplistic version of what they do is this.
1) Figure out what country and tax breaks are the most beneficial possible. (Ireland->Netherlands->Ireland->Bahamas currently has a 'winning' combo)
2) Set up essentially dummy subsidiaries in all those countries
3) Claim those subsidiaries are where you are making all your profits
So Apple Ireland essentially 'buys' the cheap phones from China on 'paper'
Apple Ireland than sells itself those same phones for a much higher price
Apple Ireland than sells those 'expensive' phones to Apple America for a high price
Apple America then sells the majority of the product in America at a high price, but for little profit on paper.
All the profit on paper was made in Ireland and the Netherlands and stored in the Bahamas.
If you combine the entire sales of phones in the Netherlands, Ireland, and the Bahamas it is diddly squat compared to the rest of the world. Yet those are the countries Apple records the majority of its profits and where it keeps most of the money.
It is smart and it is legal. Our laws need to not be dumb. There are a lot of companies paying our leaders a lot of money to keep our laws dumb. They pay the media a lot of money to make it seem like the government is the problem.
'A lower corporate tax rate!' is a common slogan. Apple paid about 2% in taxes on its US earning using its offshore method. So we'd have to beat that....