Apple's $74B overseas cash hoard leads all U.S. tech companies

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Comments

  • Reply 21 of 51
    sflocalsflocal Posts: 6,016member

    Quote:



    Apple's international business recently came under fire for avoiding U.K. taxes by operating out of its headquarters in Cork, Ireland as well as an offshoot in the Virgin Islands.


    Apple is doing NOTHING illegal, nor it is breaking any laws.  As a shareholder, I expect Apple to do whatever it can to maximize my shareholder value.  As a tax-paying citizen, I will pay the absolute minimal amount of taxes that my government, or the government where my money was earned, has LEGALLY authorized me to do so.



    Don't like the rules, petition your government to change them.  Apple is no different than the gazillion other companies doing the EXACT same thing.

  • Reply 22 of 51


    Individual citizens of the USA who work overseas must pay income tax on any money they earn while abroad. It isn't fair at all.


     


    Any technique to avoid paying taxes that is legal should be utilized by individuals and corporations. Some regulations are just stupid and unfair and should be repealed.


     


    My preferences for a tax system are the FairTax.org approach, which doesn't tax any income of businesses or individuals. Sales taxes are the sole way to gather revenue within the nation. The better one, supported by the Libertarian Party, incorporates the no taxation on citizens and corporations and only gathers money from tariffs on imported goods. Both of these methods would encourage manufacturing jobs within the USA.


     


    I still think it is funny that Apple has more cash than the US government and is worth more than some nations.

     

  • Reply 23 of 51
    iansilv wrote: »
    I honestly believe that these companies should be allowed to bring the money in to the United States, tax free, if it is for capital expenditures- like factories, buildings, stuff like that. Can someone tell me why this would be bad? I'm not asking in a challenging or a baiting way- I'm dead serious- I want to hear a well-reasoned argument as to why that would be bad. I haven't given too much thought to it- my reaction was more of a knee-jerk one.

    Why should U.S. headquartered corporations be permitted to hold the profits from their, wholly-owned, foreign subsidiaries in offshore accounts? I'd point out that the U.S. gave these companies the infrastructure, educated workforce, and the legal framework necessary for these companies to have achieved the successes that they have, and (obviously, from the subject of this thread) continue to enjoy. If some other nation would serve the needs of the Microsofts, Ciscos, and Apples at a lower cost of doing business then the business would relocate. Clearly, these American corporations elect to keep their HQs in the U.S. after due consideration (no doubt, they exercise appropriate due diligence review of this and other business judgment rule decisions as required by their corporate fiduciary duty to their shareholders). The foreign-held profits of the parent company belong to the parent company. The taxes owed on these profits are due and oweing. Absent the advantages of operating from within the U.S. these profits simply would not exist.

    Just because the funds can be held outside the parent corporation's domicilary nation does not eliminate the tax debt owed that sovereign nation. But for the business advantages provided by the U.S. these companies could not exist as they do today - and - now that time to pay a fair measure of tax on these profits has arrived the blasted Free Rider doctrine raises its ugly head.

    Either leave the U.S. and keep the funds overseas or else admit that the benefits of doing business from the U.S. are well worth the taxes due, and pay up. Any other result is just another free rider on the back of the U.S.

    In this day and age and facing the dire financial straits that the U.S. has - it is a criminal act to hold the nation hostage for tax concessions.

    Ultimately it is just this simple: when they started out to earn these profits the companies' executives and legal counsel knew that paying taxes on profits was part of the deal.
  • Reply 24 of 51
    slang4artslang4art Posts: 376member

    Quote:

    Originally Posted by [email protected] View Post





    Why should U.S. headquartered corporations be permitted to hold the profits from their, wholly-owned, foreign subsidiaries in offshore accounts? I'd point out that the U.S. gave these companies the infrastructure, educated workforce, and the legal framework necessary for these companies to have achieved the successes that they have, and (obviously, from the subject of this thread) continue to enjoy. If some other nation would serve the needs of the Microsofts, Ciscos, and Apples at a lower cost of doing business then the business would relocate. Clearly, these American corporations elect to keep their HQs in the U.S. after due consideration (no doubt, they exercise appropriate due diligence review of this and other business judgment rule decisions as required by their corporate fiduciary duty to their shareholders). The foreign-held profits of the parent company belong to the parent company. The taxes owed on these profits are due and oweing. Absent the advantages of operating from within the U.S. these profits simply would not exist.

    Just because the funds can be held outside the parent corporation's domicilary nation does not eliminate the tax debt owed that sovereign nation. But for the business advantages provided by the U.S. these companies could not exist as they do today - and - now that time to pay a fair measure of tax on these profits has arrived the blasted Free Rider doctrine raises its ugly head.

    Either leave the U.S. and keep the funds overseas or else admit that the benefits of doing business from the U.S. are well worth the taxes due, and pay up. Any other result is just another free rider on the back of the U.S.

    In this day and age and facing the dire financial straits that the U.S. has - it is a criminal act to hold the nation hostage for tax concessions.

    Ultimately it is just this simple: when they started out to earn these profits the companies' executives and legal counsel knew that paying taxes on profits was part of the deal.


    Funny how much you managed to type without a direct response to his/her query.

  • Reply 25 of 51
    robin hoodrobin hood Posts: 513member

    Quote:

    Originally Posted by Tallest Skil View Post





    And to top it all off, the sign still uses Garamond (though the image may be dated).


     


    They changed all the signs I think during 2008, so that photo must be pretty dated.

  • Reply 26 of 51


    haha - this would be hilarious if there weren't so much at stake.


     


    the story is about apple exploiting tax loopholes in order to avoid paying the tax that they would otherwise be required to pay in order to help the local economies (and the people) who live in the areas that service their facillities, and instead people would rather talk about the font that there signage is painted in.


     


    not everyone who works for apple is a designer or top exec. apple need people to clean their offices, to take away their trash, maintain their transport links, roads, and so on. all these things come out of funds raised by public taxation. in choosing to hoard their money off-shore, apple is simply trying to do everything they can to avoid giving back to the local communities on which they rely.


     


    and of *course* they are not doing anything illegal. and of *course* there will be people on this forum who have vested interests in apple making as much profit as possible. but let's not try and paint this as anything other than apple taking the decision to straightforwardly put profits over the wellbeing of the people who help them do business. some on here are going to think 'go for it'. but, i hope, not many are that selfish or unwilling to look beyond their own situation to put themselves in the shoes of people who have less, and rely on industries like apple to pay their fair share.


     


    and let's not have anyone use the 'well, if they don't like working for apple they can quit and get another job' argument. this is a hoax, and an insulting one. many people simply cannot upstages and leave their local community. not because they're lazy, but because it's too much upheaval: they might have family that can't move with them, they might have kids that they can't take out of school, or any one of countless other things. people do what they can in, quite often, difficult circumstances and in off-shoring its financial resources in order to avoid paying tax apple is making it harder for people, not easier.

  • Reply 27 of 51
    gtrgtr Posts: 3,231member


    arrow_up_1.png


    Single post troll.


     


    Who wants to take the bait?

  • Reply 28 of 51


    hi - yes, i joined appleinsider today. does this mean i'm not allowed to express my opinion? everyone has to have a 'first post', don't they?


     


    also, by 'troll' here i assume you mean 'someone who i don't agree with'?  

  • Reply 29 of 51
    robin hoodrobin hood Posts: 513member

    Quote:

    Originally Posted by philster1919 View Post


    hi - yes, i joined appleinsider today. does this mean i'm not allowed to express my opinion? everyone has to have a 'first post', don't they?


     


    also, by 'troll' here i assume you mean 'someone who i don't agree with'?  



     


    I also run a company in Ireland. Does that mean I am also exploiting a tax loophole by paying Irish tax? Or is it ok for me to do so, but not ok for Apple?

  • Reply 30 of 51


    do you hold as much of your cash reserves in offshore accounts so as to pay as little as possible to the irish government? do you, like apple, also hold as many cash reserves in offshore accounts based in the Virgin islands so as to circumvent local tax regulations? if so, then yes you are.

  • Reply 31 of 51
    MacProMacPro Posts: 19,523member
    solipsismx wrote: »
    They aren't keeping all their cash overseas. Cash in other countries was earned in other countries. They're also paying taxes as those countries require. The only thing they aren't doing is bringing that cash back earned outside the US back to the US when they don't need to.

    Exactly. So many reporters frame this as if Apple were somehow moving money off shore in some sneaky tax avoidance scheme. The US might want to consider this money, as you point out, has already been taxed locally. Allowing Apple to bring it home would be a benefit to the USA as Apple is investing heavily in jobs and infrastructure here. Why insist on double taxation?
  • Reply 32 of 51
    MacProMacPro Posts: 19,523member
    robin hood wrote: »
    I also run a company in Ireland. Does that mean I am also exploiting a tax loophole by paying Irish tax? Or is it ok for me to do so, but not ok for Apple?

    It is ironic that a country so proud of its stance against unfair tea taxes by Great Britain wants to impose double taxation on one of its own.

    I assume you don't give the Sherrif of Notingham any either ... /wink
  • Reply 33 of 51
    robin hoodrobin hood Posts: 513member


    digitalclips has hit the nail on the head. This money has already been taxed overseas, why does the US want to tax it again? That would effectively create double taxation, where you earn money, pay your taxes, and than pay taxes on what's left over after you've already paid taxes again. Forcing US businesses to transfer all their income they generate internationally back to the US and pay taxes on it twice would cripple US businesses and put them at a disadvantage.


     


    For what it's worth, Apple runs a significant operation here in Ireland with thousands of employees, and pays a lot of taxes here. This isn't some fly by night operation: Apple have had a significant presence in Cork, Ireland since 1980. Ireland may have lower taxes than some countries, but it is by no means a tax haven. In fact, lots of people here complain that if anything, our taxes should be lower.

  • Reply 34 of 51
    fredaroonyfredaroony Posts: 619member

    Quote:

    Originally Posted by Smallwheels View Post


    Individual citizens of the USA who work overseas must pay income tax on any money they earn while abroad. It isn't fair at all.


     


     


     



    As a US citizen living overseas they have a hope in hell of getting a cent out of me! Mind you I don't plan on living in the US again so it doesn't really matter anyway.

  • Reply 35 of 51
    jragostajragosta Posts: 10,473member
    lamewing wrote: »
    I wish I could keep all my cash overseas and avoid paying taxes...all the while doing business here in the U.S.

    You can. If you move overseas and earn cash at your new location, the US government has no claim on it.

    Individual citizens of the USA who work overseas must pay income tax on any money they earn while abroad. It isn't fair at all.

    Not true. As a US citizen, if your residence is in Ireland (or anywhere else), you do not pay tax on income earned outside the US.

    If your residence is the US, that might be a different matter, but it's moot - since Apple Ireland is not a US company.
    haha - this would be hilarious if there weren't so much at stake.

    the story is about apple exploiting tax loopholes in order to avoid paying the tax that they would otherwise be required to pay in order to help the local economies (and the people) who live in the areas that service their facillities, and instead people would rather talk about the font that there signage is painted in.

    OK, let's do a reality check. Before you criticize Apple for 'exploiting tax loopholes', let's see what that means.

    You are probably entitled to a single deduction for yourself on your tax return. That is a tax loophole. Do you use it?
    You are entitled to a standard deduction or itemized deductions. That is a tax loophole. Do you use it?
    Items shipped between states may be exempt from local sales tax (although a use tax would apply in many cases). That is a tax loophole. Do you use it?
    If you live in a state with sales tax and you buy something in a state without sales tax, that is a tax loophole. Do you use it or do you pay the sales tax, anyway?

    Now, if you forego all of those tax loopholes, you might be able to complain that Apple is being unfair, but even then, I would argue that you're wrong. Apple's job is to maximize return for its shareholders. That means taking advantage of local tax laws wherever possible. It's up to the government to write tax policies and up to Apple to follow them. Apple should not be expected to pay taxes that the law does not require.
  • Reply 36 of 51
    reefoidreefoid Posts: 158member

    Quote:

    Originally Posted by jragosta View Post



    OK, let's do a reality check. Before you criticize Apple for 'exploiting tax loopholes', let's see what that means.

    You are probably entitled to a single deduction for yourself on your tax return. That is a tax loophole. Do you use it?

    You are entitled to a standard deduction or itemized deductions. That is a tax loophole. Do you use it?

    Items shipped between states may be exempt from local sales tax (although a use tax would apply in many cases). That is a tax loophole. Do you use it?

    If you live in a state with sales tax and you buy something in a state without sales tax, that is a tax loophole. Do you use it or do you pay the sales tax, anyway?

    Now, if you forego all of those tax loopholes, you might be able to complain that Apple is being unfair, but even then, I would argue that you're wrong. Apple's job is to maximize return for its shareholders. That means taking advantage of local tax laws wherever possible. It's up to the government to write tax policies and up to Apple to follow them. Apple should not be expected to pay taxes that the law does not require.


    TBH, I have no view on Apple's tax affairs, but your definition of a loophole is incorrect.


     


    The situations you cite are just normal tax rules, not loopholes.  A tax loophole is where someone finds a way to circumvent certain tax rules without breaking the law.  One is adhering to the rules, the other is adhering to none (whilst not breaking any either).

  • Reply 37 of 51
    robin hoodrobin hood Posts: 513member


    reefoid, I don't understand how incorporating in Ireland is a tax loophole. I've incorporated my company here as well, and I pay my taxes. Am I exploiting a loophole? Or is it ok because I'm not an American citizen? Should companies founded by Americans be forced to transfer all their international profits back to the US and made to pay taxes twice? Wouldn't that result in American innovation being disadvantaged rather than being put on an equal footing? 

  • Reply 38 of 51
    reefoidreefoid Posts: 158member

    Quote:

    Originally Posted by Robin Hood View Post


    reefoid, I don't understand how incorporating in Ireland is a tax loophole. I've incorporated my company here as well, and I pay my taxes. Am I exploiting a loophole? Or is it ok because I'm not an American citizen? Should companies founded by Americans be forced to transfer all their international profits back to the US and made to pay taxes twice? Wouldn't that result in American innovation being disadvantaged rather than being put on an equal footing? 



    As I said I don't have a view on Apple's tax affairs as I'm not a tax expert so I can't say whether its a loophole or not.  I was just pointing out there is a difference between tax rules (which governments define) and loopholes (which are, generally, side-effects of changing tax rules).  I'm sure Apple is exploiting loopholes to reduce their taxes across the globe, but then any multi-national company is doing the same.  Its down to government to identify and close them if they believe companies are abusing them.  You can't blame the corporations, they answer to their shareholders.

  • Reply 39 of 51
    robin hoodrobin hood Posts: 513member


    I understand that. Many so-called tax loopholes are deliberate decisions by Governments. For example, the Irish Government deliberately set corporation tax at 12.5%. It isn't a loophole that was created accidentally. As a business owner, I actually think it's still too high and would prefer it to be lower.


     


    They also recently made a decision that new companies benefit from 0% corporation tax for the first 3 years. Again, that was a deliberate decision designed to encourage new businesses and therefore revitalise the economy, which will result in more tax revenue in the long run.

  • Reply 40 of 51
    jragostajragosta Posts: 10,473member
    reefoid wrote: »
    TBH, I have no view on Apple's tax affairs, but your definition of a loophole is incorrect.

    The situations you cite are just normal tax rules, not loopholes.  A tax loophole is where someone finds a way to circumvent certain tax rules without breaking the law.  One is adhering to the rules, the other is adhering to none (whilst not breaking any either).

    Nonsense. That's a silly, arbitrary definition. Using the tax laws in a legal manner is simply following tax rules. Only people who want to mindlessly attack someone call it a loophole.

    But even if you were correct, where's your evidence that Apple has circumvented the tax rules? The argument seems to be that the 'loophole' they are using is in earning money overseas and leaving it there. Just how is that circumventing the rules? Aren't the rules set up specifically to cover that situation?

    Now, personally, the tax code in the US is a disaster and I doubt that it's any different anywhere else. I would favor massive simplification - throwing out just about everything but a simple formula:

    First X dollars are not taxed.
    Next Y dollars are taxed at rate a%.
    Everything above X+Y taxed at rate b%.

    Use GAP to define income.

    Problem solved. However, even that would not stop the whining on this topic. You have to add in the principle of national autonomy. The United States does not have any jurisdiction over Ireland or Singapore or China or anywhere else. Money earned in those countries is under the jurisdiction of those countries and they can tax it however they wish. Only if the money is transferred to the US would the US have any jurisdiction.
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