Ireland has one of the lowest corporation tax rates in the world, so this is highly unconvincing.
Unless you're arguing for the total abolition of corporation tax, in which case I don't see why you're singling out the EU. Pretty much every country in the world has corporation tax.
Now you've come full circle to where this whole issue begins, totally missing the argument. I think your just mad I called Euros fags.
I certainly think that's a pretty disgusting thing to say.
and I can't work out what your argument is because it seems to be changing with every post.
Ireland has one of the lowest corporation tax rates in the world, so this is highly unconvincing.
Unless you're arguing for the total abolition of corporation tax, in which case I don't see why you're singling out the EU. Pretty much every country in the world has corporation tax.
If Apple was an Irish company and only had to pay taxes in Ireland your point would make sense. But Apple is not an Irish company and Ireland is not the only place it has to pay taxes.
There we go, a brand new argument and moving of the goalposts.
Ok, I'll bite. Where else is Apple paying any substantial corporation tax on profit earned in the EU?
If Apple was an Irish company and only had to pay taxes in Ireland your point would make sense. But Apple is not an Irish company and Ireland is not the only place it has to pay taxes.
There we go, a brand new argument and moving of the goalposts.
Ok, I'll bite. Where else is Apple paying any substantial corporation tax on profit earned in the EU?
Changing goal posts? It's a complex issue and multifaceted. I not meaning to change it, but there are many problems. If Apple pays the 12.5% then it will also need to repatriate that money to the U.S. at some point, then requiring them to pay the U.S. 35% corporate tax rate. Paying almost 50% in taxes is not feasible in the fiercely competitive global tech landscape. Samsung only pays 16% in Korea.
There we go, a brand new argument and moving of the goalposts.
Ok, I'll bite. Where else is Apple paying any substantial corporation tax on profit earned in the EU?
Changing goal posts? It's a complex issue and multifaceted. I not meaning to change it, but there are many problems. If Apple pays the 12.5% then it will also need to repatriate that money to the U.S. at some point, then requiring them to pay the U.S. 35% corporate tax rate. Paying almost 50% in taxes is not feasible in the fiercely competitive global tech landscape. Samsung only pays 16% in Korea.
False. They don't need to repatriate it, and if they do they will pay 35% - 12.5%, i.e. 22.5% in the US and a maximum of 35% overall, the domestic US rate, as per the international standard for international corporation taxation.
It is a complex, multifaceted issue, but you dont seem seem to grasp the basics of the tax law in play.
Changing goal posts? It's a complex issue and multifaceted. I not meaning to change it, but there are many problems. If Apple pays the 12.5% then it will also need to repatriate that money to the U.S. at some point, then requiring them to pay the U.S. 35% corporate tax rate. Paying almost 50% in taxes is not feasible in the fiercely competitive global tech landscape. Samsung only pays 16% in Korea.
False. They don't need to repatriate it, and if they do they will pay 35% - 12.5%, i.e. 22.5% in the US and a maximum of 35% overall, the domestic US rate, as per the international standard for international corporation taxation.
It is a complex, multifaceted issue, but you dont seem seem to grasp the basics of the tax law in play.
There is plenty of pressure here for Apple and all the other companies to repatriate. Not repatriating will not be an option in the future, either due to Congressional action or because Apple needs that capital here. We're moving into a global economy. Corporations are competing on a world-wide basis. Making every border a stumbling block hobbles companies. You're view is very euro-centric. Why do you want to hold back globalization with pre-historic tax practices?
Also, your math is not correct. If Apple makes $1 billion in the EU, they will have to pay $125 million in taxes to Ireland (or Euros actually, so more. I'll let you do your little Euro calculation). Then repatriation will consist of 35% of $875 million in corporate taxes to the U.S. which is $306,250,000. Add that together it equals $431,250,000. That is over 43% in taxes. If you account for Euro exchange that would end up being greater than 43% total in taxes. That is about 10% more than your guess, 5% less than mine. I'm closest, but if we were on the Price is Right you'd win since I went over (and in that case you might have we'll have guessed $1). Add EU's mandatory 2 year warranties on products (vs. 1 year in the U.S.) and you have quite onerous regulations that Apple could pay, if the Bernie Sanders wannabes over there force them, but I guarantee you that there will be no new up and coming Euro computer companies with these kind of regulations in place there. I'll bet money on it.
False. They don't need to repatriate it, and if they do they will pay 35% - 12.5%, i.e. 22.5% in the US and a maximum of 35% overall, the domestic US rate, as per the international standard for international corporation taxation.
It is a complex, multifaceted issue, but you dont seem seem to grasp the basics of the tax law in play.
There is plenty of pressure here for Apple and all the other companies to repatriate. Not repatriating will not be an option in the future, either due to Congressional action or because Apple needs that capital here. We're moving into a global economy. Corporations are competing on a world-wide basis. Making every border a stumbling block hobbles companies. You're view is very euro-centric. Why do you want to hold back globalization with pre-historic tax practices?
Also, your math is not correct. If Apple makes $1 billion in the EU, they will have to pay $125 million in taxes to Ireland (or Euros actually, so more. I'll let you do your little Euro calculation). Then repatriation will consist of 35% of $875 million in corporate taxes to the U.S. which is $306,250,000. Add that together it equals $431,250,000. That is over 43% in taxes. If you account for Euro exchange that would end up being greater than 43% total in taxes. That is about 10% more than your guess, 5% less than mine. I'm closest, but if we were on the Price is Right you'd win since I went over (and in that case you might have we'll have guessed $1). Add EU's mandatory 2 year warranties on products (vs. 1 year in the U.S.) and you have quite onerous regulations that Apple could pay, if the Bernie Sanders wannabes over there force them, but I guarantee you that there will be no new up and coming Euro computer companies with these kind of regulations in place there. I'll bet money on it.
Incorrect. The 12.5% paid in Ireland is deductible from the tax bill to the US. Apple would not pay more than the 35% rate as a global total. There is no compound of the taxes going on because of US repatriation tax policy, it accomodates tax already paid. I suggest you look it up, as you don't seem to understand how it works.
And there is no Congressional action being considered at any stage that would force repatriation that I am aware of. Nor are any major US politicians arguing for it particularly loudly. I wouldn't be arguing against such action, but there is none.
There is plenty of pressure here for Apple and all the other companies to repatriate. Not repatriating will not be an option in the future, either due to Congressional action or because Apple needs that capital here. We're moving into a global economy. Corporations are competing on a world-wide basis. Making every border a stumbling block hobbles companies. You're view is very euro-centric. Why do you want to hold back globalization with pre-historic tax practices?
Also, your math is not correct. If Apple makes $1 billion in the EU, they will have to pay $125 million in taxes to Ireland (or Euros actually, so more. I'll let you do your little Euro calculation). Then repatriation will consist of 35% of $875 million in corporate taxes to the U.S. which is $306,250,000. Add that together it equals $431,250,000. That is over 43% in taxes. If you account for Euro exchange that would end up being greater than 43% total in taxes. That is about 10% more than your guess, 5% less than mine. I'm closest, but if we were on the Price is Right you'd win since I went over (and in that case you might have we'll have guessed $1). Add EU's mandatory 2 year warranties on products (vs. 1 year in the U.S.) and you have quite onerous regulations that Apple could pay, if the Bernie Sanders wannabes over there force them, but I guarantee you that there will be no new up and coming Euro computer companies with these kind of regulations in place there. I'll bet money on it.
Incorrect. The 12.5% paid in Ireland is deductible from the tax bill to the US. Apple would not pay more than the 35% rate as a global total. There is no compound of the taxes going on because of US repatriation tax policy, it accomodates tax already paid. I suggest you look it up, as you don't seem to understand how it works.
And there is no Congressional action being considered at any stage that would force repatriation that I am aware of. Nor are any major US politicians arguing for it particularly loudly. I wouldn't be arguing against such action, but there is none.
It was a large part of Bernie Sander's platform. We're so far into globalization Apple should only pay corporate taxes in one place. The country the company is based in. Europe gets the benefit of Apple bringing it's products, providing jobs to your people, and investing heavy in your local economies. But that's not enough for you. You want more money from Apple just because they make a lot of money. You flamers over there can collect sales tax and whatever property taxes Apple owes due to establishing some of their operations there, but you entitled fairies shouldn't get to collect any significant corporate taxes from a U.S. company. I'd be more than happy for you all to not get Apple products, Google services, or even Microsoft's software and stuff. I'd love to see the Euros scramble to create a substitute platform to replace what Apple, Google, and Microsoft offer. Good fucking luck (as you've not established any such burgeoning company in Euro land there with remotely any ability to do such a thing). But fine, bring your anti-trust action against Apple despite no other company suffering any damages nor any European company having difficulty competing against Apple due to what is being alleged (as you have no companies competing at no fault of Apples in any way whatsoever).
Incorrect. The 12.5% paid in Ireland is deductible from the tax bill to the US. Apple would not pay more than the 35% rate as a global total. There is no compound of the taxes going on because of US repatriation tax policy, it accomodates tax already paid. I suggest you look it up, as you don't seem to understand how it works.
And there is no Congressional action being considered at any stage that would force repatriation that I am aware of. Nor are any major US politicians arguing for it particularly loudly. I wouldn't be arguing against such action, but there is none.
It was a large part of Bernie Sander's platform.
Ok, true enough. But he's no longer a presidential candidate, he's one senator, and he hasn't introduced a bill to do this. You implied it was a likelihood.
Ok, true enough. But he's no longer a presidential candidate, he's one senator, and he hasn't introduced a bill to do this. You implied it was a likelihood.
With Obama making proposals, and House Ways and Means committee chair making proposals, Elizabeth Warren talking about it, it being part of a very popular presidential candidates platform (after a contentious primary where Bernie would not drop out so as to ensure Hillary and the DNC recognize his platform), U.S. Treasury secretary Lew talking to your anti-trust last Vestegar, the anti-trust team taking almost 2 years without any decision on this, and Tim Cook hosting a fundraiser for Paul Ryan I think I'm working on more than just a hunch that this is impending. The U.S. wants that money back here so companies like Apple (who do make hefty investments of their capital in local economies wherever they set up) make investments here rather than over there. I'd think you'd want Apple to invest their capital there, but then again I guess you don't. Obviously you know your facts. You're a smart guy. I can't argue with that. You and I just disagree about who would handle that money better and in more conscientious a way. If we were talking about GE, I'd be on your side. They not only pay zero in taxes here, they get rebates from the government. At least Apple pays taxes. AND they make hefty investments into the local economies in which they operate, create jobs, have the most generous benefits for its employees compared to every U.S. company, and are the impetus for other spin off companies that are valued in the hundreds of millions. Apple does good wherever they are. I would agree there are U.S. companies that overreach and should be brought to bear with fair rules, I just don't think Apple is one of them. The value of what they bring, not only in products but also as a corporate culture that endeavors to work synergistically with the localities where they operate should be appreciated and embraced, not investigated and litigated against.
Ok, true enough. But he's no longer a presidential candidate, he's one senator, and he hasn't introduced a bill to do this. You implied it was a likelihood.
With Obama making proposals, and House Ways and Means committee chair making proposals, Elizabeth Warren talking about it, it being part of a very popular presidential candidates platform (after a contentious primary where Bernie would not drop out so as to ensure Hillary and the DNC recognize his platform), U.S. Treasury secretary Lew talking to your anti-trust last Vestegar, the anti-trust team taking almost 2 years without any decision on this, and Tim Cook hosting a fundraiser for Paul Ryan I think I'm working on more than just a hunch that this is impending. The U.S. wants that money back here so companies like Apple (who do make hefty investments of their capital in local economies wherever they set up) make investments here rather than over there. I'd think you'd want Apple to invest their capital there, but then again I guess you don't. Obviously you know your facts. You're a smart guy. I can't argue with that. You and I just disagree about who would handle that money better and in more conscientious a way. If we were talking about GE, I'd be on your side. They not only pay zero in taxes here, they get rebates from the government. At least Apple pays taxes. AND they make hefty investments into the local economies in which they operate, create jobs, have the most generous benefits for its employees compared to every U.S. company, and are the impetus for other spin off companies that are valued in the hundreds of millions. Apple does good wherever they are. I would agree there are U.S. companies that overreach and should be brought to bear with fair rules, I just don't think Apple is one of them. The value of what they bring, not only in products but also as a corporate culture that endeavors to work synergistically with the localities where they operate should be appreciated and embraced, not investigated and litigated against.
I wouldn't worry about investment so much. Most of that money is in the US anyway, being used for investing in the US. It's "offshore" in name only. The effect of repatriation wouldn't be more US investment, it might actually be less, though also a boost to the tax coffers and probably a shareholder reward.
With Obama making proposals, and House Ways and Means committee chair making proposals, Elizabeth Warren talking about it, it being part of a very popular presidential candidates platform (after a contentious primary where Bernie would not drop out so as to ensure Hillary and the DNC recognize his platform), U.S. Treasury secretary Lew talking to your anti-trust last Vestegar, the anti-trust team taking almost 2 years without any decision on this, and Tim Cook hosting a fundraiser for Paul Ryan I think I'm working on more than just a hunch that this is impending. The U.S. wants that money back here so companies like Apple (who do make hefty investments of their capital in local economies wherever they set up) make investments here rather than over there. I'd think you'd want Apple to invest their capital there, but then again I guess you don't. Obviously you know your facts. You're a smart guy. I can't argue with that. You and I just disagree about who would handle that money better and in more conscientious a way. If we were talking about GE, I'd be on your side. They not only pay zero in taxes here, they get rebates from the government. At least Apple pays taxes. AND they make hefty investments into the local economies in which they operate, create jobs, have the most generous benefits for its employees compared to every U.S. company, and are the impetus for other spin off companies that are valued in the hundreds of millions. Apple does good wherever they are. I would agree there are U.S. companies that overreach and should be brought to bear with fair rules, I just don't think Apple is one of them. The value of what they bring, not only in products but also as a corporate culture that endeavors to work synergistically with the localities where they operate should be appreciated and embraced, not investigated and litigated against.
I wouldn't worry about investment so much. Most of that money is in the US anyway, being used for investing in the US. It's "offshore" in name only. The effect of repatriation wouldn't be more US investment, it might actually be less, though also a boost to the tax coffers and probably a shareholder reward.
Isn't that just being played out currently in bonds, which benefit both the U.S. and Europe?
I wouldn't worry about investment so much. Most of that money is in the US anyway, being used for investing in the US. It's "offshore" in name only. The effect of repatriation wouldn't be more US investment, it might actually be less, though also a boost to the tax coffers and probably a shareholder reward.
Isn't that just being played out currently in bonds, which benefit both the U.S. and Europe?
A mixture of long and short term securities and direct investments. They aren't constrained by geography though, there's no reason that they can't invest in the US, they just can't spend that money as Apple Inc. Offshore is a technicality that exists pretty much solely to avoid tax.
Isn't that just being played out currently in bonds, which benefit both the U.S. and Europe?
A mixture of long and short term securities and direct investments. They aren't constrained by geography though, there's no reason that they can't invest in the US, they just can't spend that money as Apple Inc. Offshore is a technicality that exists pretty much solely to avoid tax.
I would question that conclusion. They are not diverting offshore as much as they are required to create shell companies in order to expand operations across borders. To operate in Europe they need to set up a shell corp and then by definition must pay corporate tax as well. The investment I'm talking about is building, for example. In the local communities they set up their data centers and that provides jobs to local workers. Good for the economy. Good for morale. Good for the US economy rather than building a bunch of stuff nobody appreciates over there.
A mixture of long and short term securities and direct investments. They aren't constrained by geography though, there's no reason that they can't invest in the US, they just can't spend that money as Apple Inc. Offshore is a technicality that exists pretty much solely to avoid tax.
I would question that conclusion. They are not diverting offshore as much as they are required to create shell companies in order to expand operations across borders. To operate in Europe they need to set up a shell corp and then by definition must pay corporate tax as well. The investment I'm talking about is building, for example. In the local communities they set up their data centers and that provides jobs to local workers. Good for the economy. Good for morale. Good for the US economy rather than building a bunch of stuff nobody appreciates over there.
Sure, but the point is that all of the money that a repatriation holiday would supposedly bring into the US is already there. It's not being spent in the exact same way as it would be if it was in Apple Inc coffers (where probably a large proportion would just be returned to shareholders as dividend or buyback), and there are limitations on what they can do with it without attracting regulatory attention, but it will be being put to investment use outside of the Apple-verse.
Since the money being "offshore" (whatever the reason it became offshore, it is Apples choice to keep it there) means it cannot be used to return money to shareholders, it is only being used for investments, loans etc, so it is possible that repatriation would actually reduce investment, both because of the chunk that the IRS would take, and also by the chunk that shareholders would likely receive. That leave substantially less to invest.
I would question that conclusion. They are not diverting offshore as much as they are required to create shell companies in order to expand operations across borders. To operate in Europe they need to set up a shell corp and then by definition must pay corporate tax as well. The investment I'm talking about is building, for example. In the local communities they set up their data centers and that provides jobs to local workers. Good for the economy. Good for morale. Good for the US economy rather than building a bunch of stuff nobody appreciates over there.
Sure, but the point is that all of the money that a repatriation holiday would supposedly bring into the US is already there. It's not being spent in the exact same way as it would be if it was in Apple Inc coffers (where probably a large proportion would just be returned to shareholders as dividend or buyback), and there are limitations on what they can do with it without attracting regulatory attention, but it will be being put to investment use outside of the Apple-verse.
Since the money being "offshore" (whatever the reason it became offshore, it is Apples choice to keep it there) means it cannot be used to return money to shareholders, it is only being used for investments, loans etc, so it is possible that repatriation would actually reduce investment, both because of the chunk that the IRS would take, and also by the chunk that shareholders would likely receive. That leave substantially less to invest.
I thought that's what Apple buys bonds for. They qualify for low percentage loans per their net worth, sell the bonds to raise the money to spend on buybacks and dividends. In this way they don't have to move the money. My understanding is that the reason, or the reason the money is initially offshore at least, is that they have to create whatever corporate entity (i.e.: Apple Operations Europe and do business in Europe under that name and entity, and conduct all business in that region under the appropriate entity, banking and credit processing included.
Sure, but the point is that all of the money that a repatriation holiday would supposedly bring into the US is already there. It's not being spent in the exact same way as it would be if it was in Apple Inc coffers (where probably a large proportion would just be returned to shareholders as dividend or buyback), and there are limitations on what they can do with it without attracting regulatory attention, but it will be being put to investment use outside of the Apple-verse.
Since the money being "offshore" (whatever the reason it became offshore, it is Apples choice to keep it there) means it cannot be used to return money to shareholders, it is only being used for investments, loans etc, so it is possible that repatriation would actually reduce investment, both because of the chunk that the IRS would take, and also by the chunk that shareholders would likely receive. That leave substantially less to invest.
I thought that's what Apple buys bonds for. They qualify for low percentage loans per their net worth, sell the bonds to raise the money to spend on buybacks and dividends. In this way they don't have to move the money. My understanding is that the reason, or the reason the money is initially offshore at least, is that they have to create whatever corporate entity (i.e.: Apple Operations Europe and do business in Europe under that name and entity, and conduct all business in that region under the appropriate entity, banking and credit processing included.
Not sure what you're on about with "buy bonds". While I'm sure Apple do buy bonds as part of their long term security investment, you seem to have that mixed in with the bond sales they hold to raise money for the buy backs. That's what they do at the moment, for sure.
If they were to repatriate money then they'd likely do a lot more of the dividends and buybacks, as they simply don't need the money for capital investment. They have little incentive to repatriate when their bond issue rate is significantly lower than the tax rate of the repatriation, so that money that's offshore has little to do except be used for investment.
A large portion of that investment will be in the US, since Apple Operations International are perfectly free to invest and spend money in the US, as long as it's not seen as transfer to Apple Inc to avoid tax.
I thought that's what Apple buys bonds for. They qualify for low percentage loans per their net worth, sell the bonds to raise the money to spend on buybacks and dividends. In this way they don't have to move the money. My understanding is that the reason, or the reason the money is initially offshore at least, is that they have to create whatever corporate entity (i.e.: Apple Operations Europe and do business in Europe under that name and entity, and conduct all business in that region under the appropriate entity, banking and credit processing included.
Not sure what you're on about with "buy bonds". While I'm sure Apple do buy bonds as part of their long term security investment, you seem to have that mixed in with the bond sales they hold to raise money for the buy backs. That's what they do at the moment, for sure.
If they were to repatriate money then they'd likely do a lot more of the dividends and buybacks, as they simply don't need the money for capital investment. They have little incentive to repatriate when their bond issue rate is significantly lower than the tax rate of the repatriation, so that money that's offshore has little to do except be used for investment.
A large portion of that investment will be in the US, since Apple Operations International are perfectly free to invest and spend money in the US, as long as it's not seen as transfer to Apple Inc to avoid tax.
I meant that Apple either buys or creates bonds to sell, however that whole bond thing works.
Not sure what you're on about with "buy bonds". While I'm sure Apple do buy bonds as part of their long term security investment, you seem to have that mixed in with the bond sales they hold to raise money for the buy backs. That's what they do at the moment, for sure.
If they were to repatriate money then they'd likely do a lot more of the dividends and buybacks, as they simply don't need the money for capital investment. They have little incentive to repatriate when their bond issue rate is significantly lower than the tax rate of the repatriation, so that money that's offshore has little to do except be used for investment.
A large portion of that investment will be in the US, since Apple Operations International are perfectly free to invest and spend money in the US, as long as it's not seen as transfer to Apple Inc to avoid tax.
I meant that Apple either buys or creates bonds to sell, however that whole bond thing works.
They don't buy them, they create them and sell them. They'll have to "buy" them back at some point to retire them (I think some may have matured earlier this year), but they don't resell them, they retire them. A bond is effectively just a loan and agreement to pay back with interest after a maturation period.
I meant that Apple either buys or creates bonds to sell, however that whole bond thing works.
They don't buy them, they create them and sell them. They'll have to "buy" them back at some point to retire them (I think some may have matured earlier this year), but they don't resell them, they retire them. A bond is effectively just a loan and agreement to pay back with interest after a maturation period.
I had a roundabout idea of how bonds worked. Thanks for clarifying the details for me. And thank you for the interesting and heated discussion.
Comments
and I can't work out what your argument is because it seems to be changing with every post.
Ok, I'll bite. Where else is Apple paying any substantial corporation tax on profit earned in the EU?
It is a complex, multifaceted issue, but you dont seem seem to grasp the basics of the tax law in play.
Also, your math is not correct. If Apple makes $1 billion in the EU, they will have to pay $125 million in taxes to Ireland (or Euros actually, so more. I'll let you do your little Euro calculation). Then repatriation will consist of 35% of $875 million in corporate taxes to the U.S. which is $306,250,000. Add that together it equals $431,250,000. That is over 43% in taxes. If you account for Euro exchange that would end up being greater than 43% total in taxes. That is about 10% more than your guess, 5% less than mine. I'm closest, but if we were on the Price is Right you'd win since I went over (and in that case you might have we'll have guessed $1). Add EU's mandatory 2 year warranties on products (vs. 1 year in the U.S.) and you have quite onerous regulations that Apple could pay, if the Bernie Sanders wannabes over there force them, but I guarantee you that there will be no new up and coming Euro computer companies with these kind of regulations in place there. I'll bet money on it.
And there is no Congressional action being considered at any stage that would force repatriation that I am aware of. Nor are any major US politicians arguing for it particularly loudly. I wouldn't be arguing against such action, but there is none.
Since the money being "offshore" (whatever the reason it became offshore, it is Apples choice to keep it there) means it cannot be used to return money to shareholders, it is only being used for investments, loans etc, so it is possible that repatriation would actually reduce investment, both because of the chunk that the IRS would take, and also by the chunk that shareholders would likely receive. That leave substantially less to invest.
If they were to repatriate money then they'd likely do a lot more of the dividends and buybacks, as they simply don't need the money for capital investment. They have little incentive to repatriate when their bond issue rate is significantly lower than the tax rate of the repatriation, so that money that's offshore has little to do except be used for investment.
A large portion of that investment will be in the US, since Apple Operations International are perfectly free to invest and spend money in the US, as long as it's not seen as transfer to Apple Inc to avoid tax.