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As Apple holds $138B overseas, US Senate considers one-time tax break for repatriating cash - Page 3

post #81 of 102
Quote:
Originally Posted by sog35 View Post

Individuals are taxed on Corporate dividends and capital gains. 

With corporate tax you are taxing DOUBLE.  Once for the Corp and second for the individuals who own the corp. 

There's nothing against double taxation. In fact many things you purchase have been taxed quite a few times.
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post #82 of 102
Quote:
Originally Posted by Tallest Skil View Post

Define "nothing".

Nada, zip, zilch, nil, zero, devoid of anything. 1wink.gif
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post #83 of 102
Quote:
Originally Posted by ksec View Post

Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.

 

Well giving your don't follow American politics, that's not saying much is it?

post #84 of 102
Quote:
Originally Posted by ksec View Post

Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.

I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?

 

You really don't understand American politics do you :) 

 

It is about tax and spend. The corporations (and the rich) are evil and the poor need to be handed money by Big Brother. 

post #85 of 102
Quote:
Originally Posted by dasanman69 View Post


There's nothing against double taxation. In fact many things you purchase have been taxed quite a few times.

 

But not by the same entity on the same money. Your income is taxed by the Fed and State (and sometimes Local). But that's not double taxation. That's a money grab by 2 (or more) different entities.

 

If you give over $15,000 of money that you already paid tax on to a friend, that friend will have to paid tax on it (a gift tax). That's not double taxation because 2 different people are paying the tax on the same money. It would be double taxation if you also had to pay the gift tax for giving away your already taxed money.

 

Double taxation is when the same person if taxed twice by the same entity for the same money. Which is the case when the Fed taxed the money when it was corporate profit and then again as a dividend to the shareholders. It can be argue that the shareholders owns the corporation and thus paid the corporate tax on the money that they later received as a dividend, that they also had to pay tax on. Which is a valid argument as to why dividend should not be taxed as regular income but at lower rate, even if it's not long term capital gains. Either that, or make it so that the corporation do not have to pay tax on the money they give to the shareholders in the form of a dividend.  

 

The only other thing I can think of that comes remotely close to a double taxation is when the State tax my income when I receive it and then again when I spend it in the State and pay a sales tax. But it can be argue that the sales tax is a tax on the value of the goods and not the money itself.

post #86 of 102
http://www.forbes.com/sites/robertwood/2014/04/07/incredibly-48-nations-embrace-fatca-to-reveal-u-s-depositors/

Read the above link. Apple has to get their money into the U.S. before July 1, 2014
to avoid paying 30% tax penalty for having U.S money in foreign banks!

The U.S. is cracking down on anyone who has more than 50k on an offshore account.

use your mind and think what will happen to our economy in the U.S.???
post #87 of 102
Quote:
Originally Posted by ksec View Post

Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.

I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?

 

 

Quote:
Originally Posted by SpamSandwich View Post


Agree on all points.

I disagree with them on one point, which many people in this thread also continue to mistakenly say.  "why should companies be taxed again when they move those money back?". They are in no way moving the money "back" as it was never in the US to begin with. If a foreign company like Toyota wanted to invest $100 billion in their US operations; do you think the US Government is going to tax them just to bring that money to our shores? Nope, in fact they may even be given incentives to do so by reducing or deferring some of the taxes on assets, such as plants and equipment. The whole notion that because Apple (or any company) is headquartered in the US, that bringing foreign profits into the US is considered bringing the money back to the US is ignorant.

 

Quote:
Originally Posted by Richard Getz View Post
 

 

You really don't understand American politics do you :) 

 

It is about tax and spend. The corporations (and the rich) are evil and the poor need to be handed money by Big Brother. 

 

I can't tell if you are being serious, or sarcastic considering you quoted him twice in a row with what may seem like bi-polar sentiments.

 

-PopinFRESH

post #88 of 102
Quote:
Originally Posted by PopinFRESH View Post
 

 

I can't tell if you are being serious, or sarcastic considering you quoted him twice in a row with what may seem like bi-polar sentiments.

 

-PopinFRESH

 

First post was serious. Saying the only person you know in American politics is the only sane person you know in American politics, implying that person is the only sane one, is, well, stupid!  You can't evaluate an only statement without knowing the any or all. 

 

Second was humorous (noted by the smile). Then (s)he goes on by noting (s)he does understand why the high tax rate. Our politics (if (s)he knew anything about our politics) on taxes is never what is fair, but what they can get to tax and spend.  Again, if you don't know any politicians, why would you think to understand our politics? 

post #89 of 102
Quote:
Originally Posted by tjwal View Post


I would like a tax holiday too. Since that is unlikely there is no reason why corps should get one. Simple solution levy the tax regardless of whether they repatriate the earnings. That is about the only way we can unilaterally eliminate the incentive to leave earnings overseas.

As a result, every major US corporation will pack up and move their headquarters overseas.

post #90 of 102
Quote:
Originally Posted by taxslave View Post

Read the above link. Apple has to get their money into the U.S. before July 1, 2014 to avoid paying 30% tax penalty for having U.S money in foreign banks!

Did you read the link? It says there's a 30% tax on future transfers if institutions don't comply with the rulings for transparency of account ownership. It has nothing to do with forcing money into a different place. They just want to know where money is going and who's putting it there. Also, it was reported that Apple's foreign cash is held in US financial institutions, not the other way round:

http://qz.com/86740/the-seven-craziest-findings-in-the-us-investigation-of-apples-tax-avoidance-practices/

75-100% of Apple's $102b off-shore cash is held in US financial institutions and managed by Braeburn Capital in Nevada. The notion of repatriating digital cash is just semantic. They just wouldn't be allowed to use the cash in the US before paying the tax on it. The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.
post #91 of 102
Quote:
Originally Posted by Marvin View Post


75-100% of Apple's $102b off-shore cash is held in US financial institutions and managed by Braeburn Capital in Nevada. The notion of repatriating digital cash is just semantic. They just wouldn't be allowed to use the cash in the US before paying the tax on it. The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.

They can basically claim anything that they genuinely owed by foreign tax credit. If they didn't file a return in that country and thus "overpaid", that could be scrutinized, although I don't think it happens much in practice. As you point out it's also a credit rather than a general write-off in the sense of operating costs, so it is applied directly against their actual liability.

post #92 of 102
Quote:
Originally Posted by Marvin View Post

The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.

 

But why does the U.S. government care whether Apple has paid the full tax rates of a different country?

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post #93 of 102
Quote:
Originally Posted by Frank777 View Post
 

 

But why does the U.S. government care whether Apple has paid the full tax rates of a different country?


They don't necessarily care in the way you seem to be suggesting(?). As I mentioned there's a tax credit that ensures they don't pay anything over the tax rate of the US by allowing credits directly against what they would otherwise owe. I worded it that way to distinguish it from write offs such as operating expenses.

post #94 of 102
Quote:
Originally Posted by Frank777 View Post
 

 

But why does the U.S. government care whether Apple has paid the full tax rates of a different country?

Because that's how the tax system works? 

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post #95 of 102
Quote:
Originally Posted by hmm View Post
 


They don't necessarily care in the way you seem to be suggesting(?). As I mentioned there's a tax credit that ensures they don't pay anything over the tax rate of the US by allowing credits directly against what they would otherwise owe. I worded it that way to distinguish it from write offs such as operating expenses.

 

I understood what you meant.

 

Quote:
Originally Posted by Crowley View Post
 

Because that's how the tax system works? 

 

Which is the problem with the tax system.

 

We authorized income taxes out of desperation to pay for a world war, and it created a never-ending government monster that now believes it's entitled to a cut of every single transaction on the planet simply because.

 

Forget about the fact that even if Apple brought this money back into the country where it wasn't earned, they'd be spending it domestically and paying taxes on those transactions. Or just holding it in the bank, where it would generate funds for thousands of bank loans to homeowners and businesses. Or worst case scenario, giving it back to the shareholders, who would then pay taxes on it and then pay sales taxes again when they spend it. Whatever way, the government stands to get its cut many times over.

 

So why are they taxing success abroad? The same federal administration is going to spend millions of dollars on other initiatives to encourage Americans to do business abroad and increase the country's exports.

 

Maybe China is winning because they're not conflicted about whether success abroad is a good thing.

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post #96 of 102
Quote:
Originally Posted by Tallest Skil View Post

Quote:
Basically Apple is telling the government that we have cheated you out of taxes and now want amnesty.Letting Apple bring home this 138B will not create a single job that they where not already planning on creating. Its great for Apple but whats in it for America?

You don’t have the first clue what you’re talking about. Stop spewing FUD.

And start chewing the cud. 😃
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post #97 of 102
Quote:
Originally Posted by Tallest Skil View Post

Quote:
A TAX HOLIDAY WAS GIVEN IN 2004 TO AMERICAN CORPORATIONS, NOTHING CAME OF IT THEN AND NOTHING WILL THIS TIME AROUND EITHER JUST ONE MORE SHAM.

Define "nothing".

No thing.
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post #98 of 102
Quote:
Originally Posted by Frank777 View Post
 

 

I understood what you meant.

Ah okay.

 

Quote:

 

Which is the problem with the tax system.

 

We authorized income taxes out of desperation to pay for a world war, and it created a never-ending government monster that now believes it's entitled to a cut of every single transaction on the planet simply because.

Quite a bit of it continued to go to fund the military after that into the Cold War. You are probably old enough to remember the economic downturn in areas that indirectly relied on military funding after the defense budget was cut post Cold War. Even today consider how many bases we maintain worldwide.

 

Quote:

Forget about the fact that even if Apple brought this money back into the country where it wasn't earned, they'd be spending it domestically and paying taxes on those transactions. Or just holding it in the bank, where it would generate funds for thousands of bank loans to homeowners and businesses. Or worst case scenario, giving it back to the shareholders, who would then pay taxes on it and then pay sales taxes again when they spend it. Whatever way, the government stands to get its cut many times over.

While it's different in many countries, that isn't assessed at the national level in the US. Sales tax can be assessed at the state and municipality levels. There is however a certain amount of redundancy.

 

I'm not sure what to say here. There are liabilities that must be funded. The really unfortunate thing is the amount consumed by interest payments once a government finds itself in any kind of major debt. I'll add that as Marvin pointed out, a lot of it is invested within the US, even though it belongs to foreign subsidiaries.

Quote:
Maybe China is winning because they're not conflicted about whether success abroad is a good thing.

That is a strange anecdote, and it ignores a lot of actual problems. It's not always a matter finances. Regulations vary immensely between states and there are sometimes conflicts between different levels of bureaucracy. It's not always about cost, but I still find the comparison kind of strange given the aspects of it that you would probably not want to see in the US.


Edited by hmm - 6/12/14 at 6:45pm
post #99 of 102
Quote:
Originally Posted by Frank777 View Post

So why are they taxing success abroad?

Local US businesses are expected to pay corporation tax at 35%. If a US company is equally profitable outside the US but manages to circumvent taxation, they do better than the local company, which is an incentive to operate more outside the US than inside and they get an advantage in profit growth. Taxation is often seen as big business vs government but the rates have to be level to make it fair for small businesses. If Amazon pays 5% tax on half their earnings outside the US and 25% on the other half inside, their effective tax rate would be 15%. A small, exclusively local US company selling books might pay 30-35%.

It's only coming out of their profits so it's not going to affect their product markup but it makes it easier for big businesses to grow faster than small ones as they can invest more profit in growth and the rates compound over the years. If you get to keep 85% of your profits and your competitor only gets to keep 65%, you have 30% more (85/65 = 1.3) investible profit every year. That 30% might mean one business can afford a more prominent store with more foot traffic or open more stores, hire more staff, buy more inventory at a better discount.

It's anti-competitive to have larger companies paying lower rates of taxation. The advantage should always be to the small businesses to allow them to grow because the economy thrives on competition. It is ironic how some of the same people who promote competition and free markets as the ideal also promote monopolization of business and low tax rates for the wealthiest people and companies and prefer measures that keep poor people poor. Upwards mobility is a key element of competition and it requires fast asset growth for people at the bottom with slow asset growth for people at the top.

Having a credit system for repatriation means that if a small local US business pays 35% tax, an international company paying 5% outside has to pay 30% repatriation tax and it levels the taxation between the two businesses.
post #100 of 102

Doesn't that just give the small business an incentive to stay small and not export products?

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post #101 of 102
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Originally Posted by Frank777 View Post

Doesn't that just give the small business an incentive to stay small and not export products?
Not at all. Businesses are motivated by profit. 65% retained is still profit worth chasing.

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post #102 of 102
Quote:
Originally Posted by Frank777 View Post

Doesn't that just give the small business an incentive to stay small and not export products?

You mean equalizing the tax rate via a repatriation tax would encourage a business to simply avoid operating internationally because they'd pay the same tax rate? They'd still make more profit. Apple makes more than half their revenue outside the US so even paying 35% tax on it, they are more than doubling their profits by operating internationally.

That particular rate can make them less competitive in the countries they operate in that have lower corporation tax rates for companies local to that country. Many EU countries have mid-20% corporation tax rates so making US companies pay 35% collectively isn't ideal. However, the low single digit percent they actually pay is too far the other way. Nobody is even expecting Apple to pay the full rates, they don't pay near the full US rate but under 5% is clearly too little.

If the US lowered their corporation tax rate to 25% for everyone (the biggest companies aren't paying more than this anyway) and Apple managed 15-20% outside the US, they'd have a 5-10% repatriation fee.
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