Apple's bond offering will allow it to avoid $9.2B in US taxes

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  • Reply 81 of 105
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by RichL View Post



    Apple could just pay the tax and help pay for the education of the next generation of Apple engineers.


     


    That or for another two days of the Afghan occupation.

  • Reply 82 of 105
    trumptmantrumptman Posts: 16,464member

    Quote:

    Originally Posted by mstone View Post




    Quote:

    Originally Posted by trumptman View Post




    His point about taxation stands. Apple pays taxes when they make their products. They pay taxes when they pay their employees. They pay taxes when they earn a profit. They pay taxes again when they pay a dividend and finally they are told they should pay taxes when they move the monies that would make those profits and dividends from one country to another.


     


    The problem isn't that they don't pay enough taxes.



    Except that wasn't his point as far as I can tell, at least not the point I was responding to. Changing the policy on taxing foreign earned profit is not in any appreciable way going to fix the US economy or the world economy because that aspect of world trade has almost nothing to do with the root causes of the  financial mess that the entire world is facing.



     


    It could make a large difference. Perhaps it might not make a large difference is your criteria is how much the government will get and then be allowed to spend on top of what they borrow and spend now. However those dollars being put to economic use in the United States would be a benefit as well as the dollars of many other companies that could come back into the U.S. Is the $9 billion a small bit compared to what the U.S. government is doing? Yes but the hundreds of billions waiting to return would have an economic effect OUTSIDE of the government. They would be put to use and seeking a return WITHIN our economy instead of outside of it.


     


    Quote:

    Originally Posted by anantksundaram View Post




    Quote:

    Originally Posted by trumptman View Post




    Spending comes from Congress. The Democrats controlled Congress during most Republican presidential terms. Even during the latest Republican president, George W. Bush, the Senate was controlled by Democrats during 4 of the 8 years. To compare spending by party, you have to look at control of Congress, not just the presidency.



    1) Presidents have the right to veto. At no time was the Democratic control of Congress sufficient to overcome a veto.


     


    2) Why don't you compare spending in Congresses under the two parties, compare, and come back and tell us what you find empirically. (Hint: You might be surprised).



     


    Hint, I haven't been surprised. Reagan had 23% of his veto's overridden and W. Bush had 36% of his veto's overridden. To say that veto power was enough is wrong.


     


    Quote:

    Originally Posted by anantksundaram View Post




    Quote:

    Originally Posted by digitalclips View Post



    As a Brit who moved to the US I did just that and was surprised. When first moving from UK I was pretty clueless about the system here and was keen to take a balanced, long look at everything and that particular point was unexpected based on the rhetoric from much of the media not to mention 'conventional wisdom', your inferred answer in 'hint' is entirely true. (This is me not being political). image


    I wasn't being political either (I hate politics with a passion! image).


     


    Here's a nice academic -- non-political -- study on Democratic v. Republican spending: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1740767



     


    That paper barely touches on spending and only goes back to 1967. It comes after the changes that made up the entire War on Poverty and every change tha makes up the Great Society. Even then it only deals with what it claims as social spending instead of total spending. 


     


    Quote:

    Originally Posted by dysamoria View Post




    Quote:

    Originally Posted by jungmark View Post



    Speeding is illegal. Keeping $$$ offshore isn't.

    So I guess you don't take any deductions or tax credits when you did your taxes.




    I'm poor. My taxes are a non-issue. I essentially have nothing to file. I don't count. What I'm complaining about is how imbalanced the system is and how slanted it is toward the benefit of big corporations. These entities should be contributing more to the country they exist in. Instead, they steal from it by exporting as much employment as possible, so that they're essentially getting all the benefits of conducting business in the USA without actually contributing to the economic infrastructure, taking advantage of the country where they're getting the industrial labor, and getting endless tax loopholes that regular people don't have access to. Why is it still a problem for people to grasp the idea that a larger income should mean greater tax contribution?


     


    The reality is that if one claims to be an advanced economy, one should have employees who have advanced education and advanced skill to do those jobs. You cann't create value from nothing. The value of putting a couple screws into a phone in an assembly line isn't enough to keep the job here because they couldn't pay the employee what the value of the job adds to the product. They would have to steal from some other area of the product.

  • Reply 83 of 105
    jragostajragosta Posts: 10,473member
    trumptman wrote: »
    It could make a large difference. Perhaps it might not make a large difference is your criteria is how much the government will get and then be allowed to spend on top of what they borrow and spend now. However those dollars being put to economic use in the United States would be a benefit as well as the dollars of many other companies that could come back into the U.S. Is the $9 billion a small bit compared to what the U.S. government is doing? Yes but the hundreds of billions waiting to return would have an economic effect OUTSIDE of the government. They would be put to use and seeking a return WITHIN our economy instead of outside of it.

    So Apple should voluntarily pay more than they are required to? Why not Exxon? Why not GE? Why not you and all the other trolls on AI?

    If you want to donate your money to the government, feel free. But don't expect Apple to be giving someone else's (the shareholders) money away.
  • Reply 84 of 105
    jragostajragosta Posts: 10,473member
    igriv wrote: »
    You don't know what you are talking about, and Frood does. See:

    http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=0

    "Double irish with a dutch sandwich".

    Nice misdirection. Do you really think everyone else's reading comprehension is as bad as yours?

    The original statement was that Apple pays only 2% of US profits in tax.

    I provided figures that they paid something like $6 B on $25 B in US profits.

    You come back with an article that says that they only pay 2% of their NON-US income in taxes.

    See how wrong you were?
  • Reply 85 of 105
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by jragosta View Post





    Nice misdirection. Do you really think everyone else's reading comprehension is as bad as yours?



    The original statement was that Apple pays only 2% of US profits in tax.



    I provided figures that they paid something like $6 B on $25 B in US profits.



    You come back with an article that says that they only pay 2% of their NON-US income in taxes.



    See how wrong you were?


     


     


    Quote:

    Originally Posted by jragosta View Post





    Nice misdirection. Do you really think everyone else's reading comprehension is as bad as yours?



    The original statement was that Apple pays only 2% of US profits in tax.



    I provided figures that they paid something like $6 B on $25 B in US profits.



    You come back with an article that says that they only pay 2% of their NON-US income in taxes.



    See how wrong you were?


     


     


    Whatever. Apparently you just can't admit you don't know what you are talking about (since your post denied the possibility of the very scheme described in the NYT article).

  • Reply 86 of 105
    gdavidgdavid Posts: 2member


    Apple is not being allowed to avoid the tax. It is postponing paying the tax. US tax law is simple: bring money earned and taxed overseas into the US and you will be required to pay a 35% penalty to the IRS. Leave it overseas and pay nothing.


     


    What would you do? If you say you would "bring it back" then tell us about the most recent gift check you wrote to the IRS. Not a check for taxes due, but a simple gift to the IRS. The IRS does accept gifts, the same thing the commenters here expect Apple to do.


     


    Last quarter alone, Apple paid 26% of its net income to the IRS. As Apple mentioned, it paid one in every 40 dollars paid by corporate taxpayers. Not exactly tax evasion.


     


    Every blogger who perpetuates this myth, that Apple is avoiding taxes, is as dishonest as the commenters who believe it, are ignorant.

  • Reply 87 of 105
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by gdavid View Post


    Apple is not being allowed to avoid the tax. It is postponing paying the tax. US tax law is simple: bring money earned and taxed overseas into the US and you will be required to pay a 35% penalty to the IRS. Leave it overseas and pay nothing.


     


    What would you do? If you say you would "bring it back" then tell us about the most recent gift check you wrote to the IRS. Not a check for taxes due, but a simple gift to the IRS. The IRS does accept gifts, the same thing the commenters here expect Apple to do.


     


    Last quarter alone, Apple paid 26% of its net income to the IRS. As Apple mentioned, it paid one in every 40 dollars paid by corporate taxpayers. Not exactly tax evasion.


     


    Every blogger who perpetuates this myth, that Apple is avoiding taxes, is as dishonest as the commenters who believe it, are ignorant.



     


    Apple is doing everything legally possible to, yes, avoid paying taxes. Is it wrong to do it? Hell, no! It is the management's responsibility to do this (and curiously, Google is better at that, having learned very well from Apple's pioneering work at creative accounting, see


     


    http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html


     


    ). The point is that the US tax code is a complete disaster. To me, it is not even clear why corporations SHOULD pay tax (after all, the shareholders pay the tax on any money that actually gets distributed, as well as the capital gains). I am sure there are many finance PhD theses on the subject, but I haven't read them (I assume that one of the points is that if a company (e.g. Apple) operates in a country (e.g. Albania), but all of its shareholders are in the US, then Albania wants a piece of the action, but that argument does not apply to an Albania company in Albania or a US company in the US (e.g. Apple).


     


    The reason why the tax code is a disaster is clear: every special interest gets its 2c in, and gets its $2BN out, but while this is an explanation, it is not an excuse.

  • Reply 88 of 105
    macgurumacguru Posts: 35member

    Quote:

    Originally Posted by dysamoria View Post





    I'm poor. My taxes are a non-issue. I essentially have nothing to file. I don't count. What I'm complaining about is how imbalanced the system is and how slanted it is toward the benefit of big corporations. These entities should be contributing more to the country they exist in. Instead, they steal from it by exporting as much employment as possible, so that they're essentially getting all the benefits of conducting business in the USA without actually contributing to the economic infrastructure, taking advantage of the country where they're getting the industrial labor, and getting endless tax loopholes that regular people don't have access to. Why is it still a problem for people to grasp the idea that a larger income should mean greater tax contribution?


    This reeks of entitlement mentality. You have "nothing to file" yourself, meaning you're getting your free ride. And yet you can't pass up the opportunity to drag corporations through the mud and complain about how greedy they are. Apple gives up 6B in taxes (in one year!) and you, of all people, want to make them look like a deadbeat corporation trying to wiggle out of its tax responsibility. Good grief. I'm a lifelong liberal, but your attitude makes me want to jump ship.


     


    You say you're "complaining about how imbalanced the system is and how slanted it is toward the benefit of big corporations." Of course, the elephant in the room is the fact that big corporations are nothing other than large groups of hard working people. They are not the Borg, although they are certainly self-interested entities, not unlike you and me.

  • Reply 89 of 105
    froodfrood Posts: 771member

    Quote:

    Originally Posted by Smallwheels View Post


    Someone please explain to me how offering bonds that must be repaid to the buyers will get the $100 billion in value that is parked overseas back to the USA without being taxed.



     


    Suppose you had $100billion in a bank in the Bahamas, but in order to get that money inside the US, it would be taxed.


     


    Now suppose you want $17billion inside the US for whatever reason.


     


    You could do this:


    Take $26.2 billion out of the bank in the Bahamas.  Bring it in the US.  Pay your $9.2 billion in taxes.  Voila- you have 17Billion inside the US and $73.7billion offshore


     


    OR:


    Issue a bond for $17billion. Pay 50ish million in underwriter fees and 350ish million in debt service over the life of the bond.


     


    Either way you get the same $17 billion.  The first way it cost you $9.2 billion, the second way it cost you about $400 million.  You choose.

  • Reply 90 of 105
    jragostajragosta Posts: 10,473member
    igriv wrote: »



    Whatever. Apparently you just can't admit you don't know what you are talking about (since your post denied the possibility of the very scheme described in the NYT article).

    No, I simply stated facts while you distorted everything with your bizarre interpretations.

    You claimed that Apple only paid 2% income tax on its US income. In reality, it paid more like 25-30%. As "evidence", you provided an article that says that Apple paid 2% on its NON-US income. Clearly, you're confused. The amount it pays on NON-US income has nothing to do with the amount it pays on US income.
  • Reply 91 of 105
    anantksundaramanantksundaram Posts: 20,407member

    Quote:

    Originally Posted by igriv View Post


     


    Quote:

    Originally Posted by jragosta View Post





    Nice misdirection. Do you really think everyone else's reading comprehension is as bad as yours?



    The original statement was that Apple pays only 2% of US profits in tax.



    I provided figures that they paid something like $6 B on $25 B in US profits.



    You come back with an article that says that they only pay 2% of their NON-US income in taxes.



    See how wrong you were?


     


     


    Whatever. Apparently you just can't admit you don't know what you are talking about (since your post denied the possibility of the very scheme described in the NYT article).



    Ah.... there you go again. Making a recurrent fool of yourself seems to be something you're condemned to repeat......


     


    Whatever......

  • Reply 92 of 105
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by jragosta View Post





    No, I simply stated facts while you distorted everything with your bizarre interpretations.



    You claimed that Apple only paid 2% income tax on its US income. In reality, it paid more like 25-30%. As "evidence", you provided an article that says that Apple paid 2% on its NON-US income. Clearly, you're confused. The amount it pays on NON-US income has nothing to do with the amount it pays on US income.


     

    #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }

    I did not make any numerical claims, because I simply don't care about the exact savings Apple derives from its Double Irish with Dutch sandwich (or whatever the currently optimal scheme is). My only point was to point out that the scheme described by Frood is not only plausible, but in fact used by Apple (and not only Apple), as described by the New York Times (which you probably think is another one of Samsung's stooges). Just as your greek chorus anantksundaram, you try to divert the discussion into peripheral technicalities to avoid facing the main point -- since you are not quite as rude as him (that is quite a high bar to clear), I am responding to your post, and not his.


    #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }

     

  • Reply 93 of 105
    adamcadamc Posts: 583member
    igriv wrote: »
    Ain't the US financial system grand!  Apple is not allowed to repatriate its cash, instead it:

    1. Still collects 1% a year on its offshore cash.

    2. Pays 2% on its debt.

    3. Pays underwriting fees to the investment banks.

    4. But wait, there is more! 2 and 3 are tax deductible items, resulting in a transfer of wealth from the tax payer to said investment banks (which, I am guessing, are holding most of the bonds also).

    Blame the system, if you are unhappy write to your congressman/men.

    Stand for election a a congressman and change the law.

    Oh, is only Apple to blame or some people just love to bitch when Apple is involved.
  • Reply 94 of 105
    cnocbuicnocbui Posts: 3,613member

    Quote:

    Originally Posted by jragosta View Post





    You obviously don't understand the difference.



    As an Irish citizen, you are subject to the laws of Ireland and the tax structure - even if you earn it elsewhere.



    A multinational corporation has no 'citizenship' and is not subject to US taxes outside the US.



    The proof is in the pudding. If the US government could legally grab a portion of the money stored by Apple and other multinationals overseas, why haven't they done it? Obviously, they can't.

    Technically, it doesn't get the $100 B overseas back to the US. It does, however, allow them to get essentially the same result as if they did - but without paying taxes.




    You are inventing stuff again.   If the overseas income can be taxed on it's remittance to the US, then the US govt clearly has dominion over it - n'es ce pas? 'Citizenship' is an irrelevant concept in this discussion.  The Irish govt can tax the foreign earnings of anyone - citizen or not - who is resident in the country for tax purposes. While US laws may currently be configured to prevent them taxing earnings prior to repatriation, I imagine the laws could be changed unless the constitution has an element that would preclude that.

  • Reply 95 of 105
    springerjspringerj Posts: 4member
    So I wonder... Can they use the foreign currency holdings to buy back stock held by foreign owners, and thereby repatriate the capital without paying any taxes? That is, can they use foreign currency to purchase stock held in foreign countries, and then return the stock to the treasury tax-free?
  • Reply 96 of 105
    jragostajragosta Posts: 10,473member
    cnocbui wrote: »

    You are inventing stuff again.   If the overseas income can be taxed on it's remittance to the US, then the US govt clearly has dominion over it - n'es ce pas?

    Wrong. Completely, absolutely, totally wrong.

    The US government has absolutely no dominion over money earned and kept overseas. They only gain dominion at the time that it's brought into the US.

    Once again, if you can't understand even that very simple concept, you have no business discussing the matter.

    igriv wrote: »
    I did not make any numerical claims, because I simply don't care about the exact savings Apple derives from its Double Irish with Dutch sandwich (or whatever the currently optimal scheme is). My only point was to point out that the scheme described by Frood is not only plausible, but in fact used by Apple (and not only Apple), as described by the New York Times (which you probably think is another one of Samsung's stooges). Just as your greek chorus anantksundaram, you try to divert the discussion into peripheral technicalities to avoid facing the main point -- since you are not quite as rude as him (that is quite a high bar to clear), I am responding to your post, and not his.

    Frood is the one who made the original fraudulent claim that Apple pays only 2% taxes on its US income.

    I pointed out that he was wrong (in that and many other things) and gave the correct figure - which is more like 25-30%.

    You then chimed in with an article that says Apple pays 2% on its NON-US income and told me that disproved my statement.

    Clearly, you're wrong. Paying 2% on non-US income does not mean that they paid 2% on US income.
  • Reply 97 of 105
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by cnocbui View Post




    You are inventing stuff again.   If the overseas income can be taxed on it's remittance to the US, then the US govt clearly has dominion over it - n'es ce pas? 'Citizenship' is an irrelevant concept in this discussion.  The Irish govt can tax the foreign earnings of anyone - citizen or not - who is resident in the country for tax purposes. While US laws may currently be configured to prevent them taxing earnings prior to repatriation, I imagine the laws could be changed unless the constitution has an element that would preclude that.



     


    There are thorny constitutional issues involved with taxation period (and especially corporate taxation, due to the ban on taxation without representation), but since the guardians of the constitution are nine political appointees, this has not really stopped the government from doing anything.

  • Reply 98 of 105
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by springerj View Post



    So I wonder... Can they use the foreign currency holdings to buy back stock held by foreign owners, and thereby repatriate the capital without paying any taxes? That is, can they use foreign currency to purchase stock held in foreign countries, and then return the stock to the treasury tax-free?


     


    Yes, I have wondered about that too. I conjecture that not enough Apple stock is held by foreign entities to make this worthwhile (especially since they might not be willing to sell).

  • Reply 99 of 105
    trumptmantrumptman Posts: 16,464member

    Quote:

    Originally Posted by jragosta View Post




    Quote:

    Originally Posted by trumptman View Post



    It could make a large difference. Perhaps it might not make a large difference is your criteria is how much the government will get and then be allowed to spend on top of what they borrow and spend now. However those dollars being put to economic use in the United States would be a benefit as well as the dollars of many other companies that could come back into the U.S. Is the $9 billion a small bit compared to what the U.S. government is doing? Yes but the hundreds of billions waiting to return would have an economic effect OUTSIDE of the government. They would be put to use and seeking a return WITHIN our economy instead of outside of it.




    So Apple should voluntarily pay more than they are required to? Why not Exxon? Why not GE? Why not you and all the other trolls on AI?



    If you want to donate your money to the government, feel free. But don't expect Apple to be giving someone else's (the shareholders) money away.


     


    Nope. You've read it wrong. I mentioned that people are thinking about the dollars returning and the difference they will make only in terms of what Apple will bring in terms of tax revenue. They are looking at the $9 billion and declaring that given the size of government spending and borrowing that more taxes taken wouldn't make a large difference. I am noting that if a person stops thinking about government as the solution, they will think about what Apple as a private company could do with the $100 billion being kept over seas in terms of investment and getting a return on it here within the United States. They are thinking of the economic benefit of $9 billion in taxes. I am thinking of another $100 billion in dollars seeking a return within the U.S. economy instead of being kept outside of it.


     


    This was in response to a claim that the government tax policy doesn't really cause a big difference in terms of economic activity. I'm saying it is keeping $100 billion out of the U.S. economy and if you did this for all the multinationals I'm sure it would be well over a trillion dollars kept out of our economy to avoid taxation.

  • Reply 100 of 105
    jungmarkjungmark Posts: 6,926member
    dysamoria wrote: »
    I'm poor. My taxes are a non-issue. I essentially have nothing to file. I don't count. What I'm complaining about is how imbalanced the system is and how slanted it is toward the benefit of big corporations. These entities should be contributing more to the country they exist in. Instead, they steal from it by exporting as much employment as possible, so that they're essentially getting all the benefits of conducting business in the USA without actually contributing to the economic infrastructure, taking advantage of the country where they're getting the industrial labor, and getting endless tax loopholes that regular people don't have access to. Why is it still a problem for people to grasp the idea that a larger income should mean greater tax contribution?

    We agree the tax system is complex and loophole heavy. People with large incomes already pay a higher tax rate. Close the loopholes.
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