[QUOTE=SolipsismX;2021218]Sure, it's not a surprise, but that's not the issue. The issue is they have no reason nor legal obligation to bring move profits across countries so why would they at 35% interest rates.[/quote[
Exactly, that's why it's equally open for any of these companies *not* to repatriate the cash.
Quote:
Assuming you are an American, imagine if you were charged 35% for moving money from one state bank to another even though you had plenty in the states you travel. You simply wouldn't move the money because the cost of doing business would be too high.
This goes back to the point that it's no secret this arrangement is in place. You plan your business accordingly.
Sure, it's not a surprise, but that's not the issue. The issue is they have no reason nor legal obligation to bring move profits across countries so why would they at 35% interest rates.
Assuming you are an American, imagine if you were charged 35% for moving money from one state bank to another even though you had plenty in the states you travel. You simply wouldn't move the money because the cost of doing business would be too high.
And that's fair enough, but if Apple wants to move that money they should pay the taxes that entails. Their customers don't get a "tax holiday," why should they?
The primary job of any government is to maintain law and order in a given geographical area, and that is the main reason they receive taxes. Therefore taxes should go to the government in the area you earned the money. US companies operating overseas should pay taxes to the local government not the US government.
The main reason for taxes is that that there are people who want to rule our lives.
The BNP of most countries goes up 3% per year in average. That means that the politicians get 3% more taxes each year without doing anything. Somehow that play away with this money.
I live in the country that have the highest taxes in the world. The lowest tax rate for a worker is 75%. If schools/healthcare/care worked people would never accept these high taxes. This leads to the absurd thing that the government have a self interest that things does not work.
Each government sector get X amount of money. At years end: If a sector is good and haven't spent all money they are punished with lover budget money for the next year. The sectors that misbehave and spends to much money are rewarded and gets more money. The waste is enormous.
The US problem is not low taxes. The problem is unemployment. Even if the country create 100K new jobs/month the unemployment goes up because of that immigration is higher. As a non American I can also see the great white elephant in the US economy: the insane military spending.
Why should Apple buyers money outside US go to these insane spendings?
In Apples case/most companies: They want to have the better tax rules for overseas income and income in US. Apple pays 23% taxes in US. (google 21% and MSFT 7%). Money that are generated in US use US infrastructure that are payed by US taxes. Money that is generated outside US haven't used any US infrastructure. With todays 35% tax rule money generated outside US, for no cost of the US government, is taxed higher the money generated in US.
And last: In a country there are X amount of money. If you rise the taxes there will be less money in the private sector that leads to less jobs. Less jobs means less tax income. Many countries choose then to raise the taxes and they are in a vicious cycle.
Now that's government efficiency in action ... an issue from 1989 resolved in 2012.
And people want to give them control over healthcare too ... name me one entitlement program or agency the government runs in an efficient and/or in a sustainable fashion.
I am so sad for US. I live in a country with government health care.
After paying about 1 million dollar in tax I got a back problem. Had to wait 4 years for an operation. That lead to that I did my last work day before the age of 30.
I am now on medical benefit for the rest of my life.
Had I lived in US, I would have had the operation within 2 weeks and the quality of health care is on a totally different level.
All Obama care lovers should look at this hint: There are many Canadians that work in the US. Most of them choose to pay for health insurance in US even if they could get free care in their home country. Waiting years for treatment is not good.
And last: If the "government" pays for health care they will try to save money. Here in Sweden they refuse to give cancer patients medicine that could prolong their lives 6 month. The government have no incentive to spend 10000 dollar extra on there drugs.
Regardless, it's not like it is any surprise to Apple, or any other multinational company, that they have to pay tax when the money is repatriated. Surely they knew this when they were (are) making money hand over fist overseas?
EDIT: I a word.
Is it wrong that Apple makes money "hand over fist"?
Do you understand that its good that private companies makes money? Do you know this simple economic fact that ALL taxes are generated from private companies and their employees?
Isn't it good that Apple want to take the money "home" and that they are ok to pay the government their protection fee? They are just negotiating the "protection" fee.
Lol, $689,000 in interest. Serves the government right for being so slow.
The government doesn't care about the Interest. That issue was decided years ago that is was going to have to pay that. The government really cared about the other issue that Apple lost on. Had the government lost on that, many companies including Apple, would have had to pay significantly less taxes on foreign income. This was a win for the government.
Moreover, if Apple would pay it's taxes, maybe the government could afford to do things quicker. :O)
I would have never guessed this board was filled with so many libertarians!
Every few years businesses start lobbying for a tax holiday on their earnings. As other posters on this board have noted, they went into business knowing this repatriation tax existed, but want to weasel out of it when it comes time to actually bring the money home.
Repatriation money is taxed as income, and for Apple that would be at the 35% rate. This is not in addition to the taxes they already paid to the originating country, however.
Let's say Apple earned $100 in Australia, and their tax rate is 30%. Apple would have paid $30 in taxes, and held on to $70. Now, when they repatriate that money, their tax burden would be $35 (35% of $100), but they'd get a $30 deduction for taxes already paid. (Anyone here who pays state taxes gets the same federal deduction).
Add in the complex system of laws and dedication, write-offs, etc, and the average American company in the highest tax bracket pays an effective tax rate of around 25%, putting them right in the middle of the world's corporate tax rates.
The US is pretty much alone in repatriation taxes. You can agree or disagree that it's a good idea. What you can't disagree with is that Apple knows full well that the repatriation tax exists, yet, for some reason, maintains their headquarters in the US.
Is it wrong that Apple makes money "hand over fist"?
Do you understand that its good that private companies makes money? Do you know this simple economic fact that ALL taxes are generated from private companies and their employees?
Isn't it good that Apple want to take the money "home" and that they are ok to pay the government their protection fee? They are just negotiating the "protection" fee.
Todays government is worse then the mafia.
Really? Fact. Companies today pay lower taxes than any other point of time in our Countries histories. The largest bank in our Country, Bank of America paid zero federal taxes last year. The same was true with GE. This is odd, since companies are treated as individuals under the Constitution and reap more representation from the government than the living breathing people obtain.
Moreover, since the founding of this Country there was an import tax, which essentially made it so american industry didn't have to compete with slave labor. In the greatest economic times our Country has seen, many of these companies used their new found wealth to do away with these taxes in the guise of so called free trade agreements. As any idiot can figure out, since the passing of the free trade agreements american manufacturing shipped to all the countries our government has been for years claiming abuse people, and worst undermine our way of life. I didn't see the US rush our military into China after the Chinese murdered potentially thousands of students for protesting in Tiananmen Square. Instead, we gave China our entire manufacturing economy and all the taxes that go with it. If I recall, this was sold to us by claiming it would create more jobs right here in the US. I wonder when that will be happening.
Further, since the beginning of our Country our so called Founding Father's understood the value of the raw materials in our Country. We didn't want foreign Countries gobbling them all up, so we imposed an export tax. Currently, the same companies have lobbied away the export tax on things such as steel and oil. We claim there is an oil shortage in our Country, but a lot of the oil mined from public lands is actually sold overseas. We get to pay for the expensive stuff coming from overseas.
The loss of these taxes that have been around since the beginning of time in our Country is the reason you see government struggling to pay police, firefighters, and maintain roads. Ironically, the Chinese government is using its new found wealth to loan money to the US, which we the tax payers get to pay back. At some point last year, Apple had more cash on hand then the US government.
I love Apple, but the tax break on foreign earned income is ridiculous. Apple isn't going to use that money to patriotically benefit the rest of us back home. It is going to use the money to buy stock grants to give to its executives. Don't get me started on how companies lobbied to screw us over in the stock market.
"Taxes are what we pay for civilized society" Oliver Wendell Holmes, Jr.
However Apple, like many other companies including Google and Microsoft, use the Double Irish tax loophole that assures them they pay virtually no taxes on those overseas profits either. They can't have it both ways; you either pay taxes in the US or you pay them overseas.
I'm with California here. Either Apple agrees to pay the tax rates owed, or they keep the money overseas.
Besides, such a tax holidays was granted once before. Instead of "spurring the economy" here in the US, as proponents of the holiday will say, companies used the savings to buy back stock and give their CEO bonuses instead of hiring new people or investing in R&D. In fact after a $150 BILLION dollar tax break, the top 15 companies actually laid people off.
In an economy where everybody seems worried about where every penny is spent, how about we start looking at where the pennies are getting lost in the system instead of trying to give a $300 billion tax break to companies.
I am not 100% sure, but the case with Double Irish with Apple isn't exactly the same as Microsoft or Google. Which uses IP to dodge the Profits tax.
Governments has actually gaining Sales Tax from every Apple products sold if they have VAT, like UK, or Import Tax like China.
So, like what others have said, Why Should apple pay tax again? Even a 5% is pretty god damn good deal for the government.
The primary job of any government is to maintain law and order in a given geographical area, and that is the main reason they receive taxes. Therefore taxes should go to the government in the area you earned the money. US companies operating overseas should pay taxes to the local government not the US government.
The point you're missing is that Apple is already paying taxes in all the countries they do business in - according to the laws of that country. The US wants Apple to pay taxes in the foreign country PLUS an additional 35% if they bring the after-tax profits to the U.S. THAT is what is being discussed.
Quote:
Originally Posted by skittlebrau79
However Apple, like many other companies including Google and Microsoft, use the Double Irish tax loophole that assures them they pay virtually no taxes on those overseas profits either. They can't have it both ways; you either pay taxes in the US or you pay them overseas.
I'm with California here. Either Apple agrees to pay the tax rates owed, or they keep the money overseas.
Besides, such a tax holidays was granted once before. Instead of "spurring the economy" here in the US, as proponents of the holiday will say, companies used the savings to buy back stock and give their CEO bonuses instead of hiring new people or investing in R&D. In fact after a $150 BILLION dollar tax break, the top 15 companies actually laid people off.
In an economy where everybody seems worried about where every penny is spent, how about we start looking at where the pennies are getting lost in the system instead of trying to give a $300 billion tax break to companies.
The point you're missing is that Apple is forced to pay the legal taxes in each country. If Ireland wants pro-business tax rules in order to encourage investment, that's their right as a sovereign country. Apple pays what Ireland tells them to pay.
And then the U.S. wants 35% more for simply transferring cash.
Quote:
Originally Posted by TBell
The government doesn't care about the Interest. That issue was decided years ago that is was going to have to pay that. The government really cared about the other issue that Apple lost on. Had the government lost on that, many companies including Apple, would have had to pay significantly less taxes on foreign income. This was a win for the government.
Moreover, if Apple would pay it's taxes, maybe the government could afford to do things quicker. :O)
Apple has paid its taxes - in fact, Apple OVERpaid - which is why the government must refund their money.
As for the rest, you are misunderstanding the argument. It's a matter of timing, not whether Apple should pay taxes or not. To understand the issue, let's make up some numbers:
Let's say that Apple earned $10 B in global profits in 2010. For simplicity, we'll say that $5 B was in the U.S. and $5 B in Japan (obviously, the real situation was more complex, but it won't change the result). Now, since Apple Japan is a separate corporation, they issue dividends AFTER their fiscal year has ended. Let's say that Apple Japan pays $2 B in taxes, reinvests $2 B, and sends $1 B to Apple Inc as a dividend. But that dividend is actually paid in 2011.
Apple wants to pay 2010 taxes on its $5 B in U.S. income plus the $1 B in dividends, so it would pay U.S. taxes on $6 B for 2010. The argument is that since Apple Japan is a wholly owned subsidiary, the income is earned in 2010, even though the dividend isn't paid until later.
The government says "no, dividend income is taxed when it is paid". For example, let's say that you own 10,000 shares of company xyz stock. The company earns a record profit in 2010 and pays a dividend in 2011. That dividend is taxable to you for 2011, NOT 2010 even though the company paid tax on the record profits in 2010.
One could make arguments either way, but I think the government's argument is a little stronger, but can't claim to have done a detailed analysis of the tax laws.
Why does it matter? Because Apple's effective tax rate was higher in one year than in the other for various reasons. If the effective tax rate is higher in 2011 than in 2010 (or 1990 vs 1989 in this case), then you'd obviously prefer for the income to occur in the earlier year.
Total corporate taxes (as a percent of GNP) were lower than today in 2001-02 and 1982-87 and before 1913 when the corporate income tax was implemented (and probably also the periods between 1913 and 1932, although I don't have the data handy).
I'm under the impression Apple doesn't employ the double fisted Irish or Dutch oven like MS and Google.
If they aren't, they are doing a disservice to their shareholders by not working to minimize their tax obligations.
It is a shame only a few people on the thread understand the core issue. Even if all the repatriated funds go to the CEOs, it is still money in the US economy as long as they spend a reasonable percentage of it.
The alternative for US and California is more internationally-diversified operations so they can avoid expenditures here and use the cash elsewhere. That eliminates jobs in the most simplistic analysis.
All you can reasonably argue for the double-taxation is that it helps avoid concentration of wealth somewhat.
And that's fair enough, but if Apple wants to move that money they should pay the taxes that entails. Their customers don't get a "tax holiday," why should they?
totally different kind of taxes.
This would be more like if, for whatever reason, you had a bank account in the UK and the US and you wanted to move it all to your US bank. But the US was calling that 'income' and wanted to change you income tax on it, even though you would have paid the appropriate tax in the UK (which could be nothing). They are trying to do the same thing to companies and while we love to say "yeah still it to the big boys" it means that they won't move the money. And by not moving the money, which is sometimes the bigger part of their cash (such as with Apple) there goes the funds to do things like build factories here in the US which everyone is screaming Apple simply must do.
Now do I think it would be fair to have two rates of interest if they are going to insist on something, sure. How about 10% for a flat move but only 5% if you are actually using the money to benefit the country in some major way, like a factory.
Good, the richest corporation in the world should be ashamed of itself for trying to get out of paying taxes. I swear Apple are the biggest cheapskates in the world with their tax evading sweatshop working ways. I'm not surprised their loyal drones still support them though. Apple is all they have in their pathetic lives.
This would be more like if, for whatever reason, you had a bank account in the UK and the US and you wanted to move it all to your US bank. But the US was calling that 'income' and wanted to change you income tax on it, even though you would have paid the appropriate tax in the UK (which could be nothing).
Nope. It's more like if you have a job in UK and you pay a lower income tax in UK and then you've to pay the difference btw US and UK tax to the US also. Because, what Apple's earning is income.
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They are trying to do the same thing to companies and while we love to say "yeah still it to the big boys" it means that they won't move the money. And by not moving the money, which is sometimes the bigger part of their cash (such as with Apple) there goes the funds to do things like build factories here in the US which everyone is screaming Apple simply must do.
You're dreaming if you think Apple or other companies will 'build factories in US' if we give them a break on this tax. They just build factories in the lowest cost countries while getting protection from US military and refuse to pay tax to the US.
I don't understand why people think corporations (and individuals) are being taxed "again" when they make profit internationally. They get a tax CREDIT on foreign taxes they already paid!
For example, if Apple made a profit of $100 in a foreign country and that country's tax rate was 10%, Apple would pay that foreign country $10 on profit earned there. Apple then repatriates that profit back to the US that has a tax rate of 35%. Apple would only pay $35 MINUS a $10 tax credit it already paid in taxes to a foreign country. So Apple is being effectively taxed 35% just as if it was a domestic profit. They are just splitting the payment between two different collectors. They aren't being taxed twice, they are only making two payments on what they would otherwise have paid in one payment if that profit was generated locally.
Many people across the US seem to be under the impression that corporations like Apple get taxed 10% from the foreign country AND 35% from the US, effectively a 45% tax rate, which is completely incorrect.
And of course, this is all oversimplified because many corporations make profit in any number of countries where they can offset US taxes with excess tax credits from profits made in countries with higher taxation. Not to mention other loopholes.
This would be more like if, for whatever reason, you had a bank account in the UK and the US and you wanted to move it all to your US bank. But the US was calling that 'income' and wanted to change you income tax on it, even though you would have paid the appropriate tax in the UK (which could be nothing). They are trying to do the same thing to companies and while we love to say "yeah still it to the big boys" it means that they won't move the money. And by not moving the money, which is sometimes the bigger part of their cash (such as with Apple) there goes the funds to do things like build factories here in the US which everyone is screaming Apple simply must do.
Now do I think it would be fair to have two rates of interest if they are going to insist on something, sure. How about 10% for a flat move but only 5% if you are actually using the money to benefit the country in some major way, like a factory.
Except you neglect to mention you get a tax credit of whatever foreign tax you already paid on that money to the UK.
The point you're missing is that Apple is already paying taxes in all the countries they do business in - according to the laws of that country. The US wants Apple to pay taxes in the foreign country PLUS an additional 35% if they bring the after-tax profits to the U.S. THAT is what is being discussed.
The point you're missing is that Apple is forced to pay the legal taxes in each country. If Ireland wants pro-business tax rules in order to encourage investment, that's their right as a sovereign country. Apple pays what Ireland tells them to pay.
And then the U.S. wants 35% more for simply transferring cash.
But the point you're missing is that Apple gets a tax credit of whatever they already paid to that foreign government. So it's not like they pay 10% to one country and then 35% MORE to the US. When they have to pay the 35% they get a tax credit of the 10% they already paid to the other government. So Apple's tax rate is effectively 35% total paid to all parties, not 45% or something else absurdly astronomical.
Comments
Exactly, that's why it's equally open for any of these companies *not* to repatriate the cash.
Assuming you are an American, imagine if you were charged 35% for moving money from one state bank to another even though you had plenty in the states you travel. You simply wouldn't move the money because the cost of doing business would be too high.
This goes back to the point that it's no secret this arrangement is in place. You plan your business accordingly.
Sure, it's not a surprise, but that's not the issue. The issue is they have no reason nor legal obligation to bring move profits across countries so why would they at 35% interest rates.
Assuming you are an American, imagine if you were charged 35% for moving money from one state bank to another even though you had plenty in the states you travel. You simply wouldn't move the money because the cost of doing business would be too high.
And that's fair enough, but if Apple wants to move that money they should pay the taxes that entails. Their customers don't get a "tax holiday," why should they?
The primary job of any government is to maintain law and order in a given geographical area, and that is the main reason they receive taxes. Therefore taxes should go to the government in the area you earned the money. US companies operating overseas should pay taxes to the local government not the US government.
The main reason for taxes is that that there are people who want to rule our lives.
The BNP of most countries goes up 3% per year in average. That means that the politicians get 3% more taxes each year without doing anything. Somehow that play away with this money.
I live in the country that have the highest taxes in the world. The lowest tax rate for a worker is 75%. If schools/healthcare/care worked people would never accept these high taxes. This leads to the absurd thing that the government have a self interest that things does not work.
Each government sector get X amount of money. At years end: If a sector is good and haven't spent all money they are punished with lover budget money for the next year. The sectors that misbehave and spends to much money are rewarded and gets more money. The waste is enormous.
The US problem is not low taxes. The problem is unemployment. Even if the country create 100K new jobs/month the unemployment goes up because of that immigration is higher. As a non American I can also see the great white elephant in the US economy: the insane military spending.
Why should Apple buyers money outside US go to these insane spendings?
In Apples case/most companies: They want to have the better tax rules for overseas income and income in US. Apple pays 23% taxes in US. (google 21% and MSFT 7%). Money that are generated in US use US infrastructure that are payed by US taxes. Money that is generated outside US haven't used any US infrastructure. With todays 35% tax rule money generated outside US, for no cost of the US government, is taxed higher the money generated in US.
And last: In a country there are X amount of money. If you rise the taxes there will be less money in the private sector that leads to less jobs. Less jobs means less tax income. Many countries choose then to raise the taxes and they are in a vicious cycle.
Now that's government efficiency in action ... an issue from 1989 resolved in 2012.
And people want to give them control over healthcare too ... name me one entitlement program or agency the government runs in an efficient and/or in a sustainable fashion.
I am so sad for US. I live in a country with government health care.
After paying about 1 million dollar in tax I got a back problem. Had to wait 4 years for an operation. That lead to that I did my last work day before the age of 30.
I am now on medical benefit for the rest of my life.
Had I lived in US, I would have had the operation within 2 weeks and the quality of health care is on a totally different level.
All Obama care lovers should look at this hint: There are many Canadians that work in the US. Most of them choose to pay for health insurance in US even if they could get free care in their home country. Waiting years for treatment is not good.
And last: If the "government" pays for health care they will try to save money. Here in Sweden they refuse to give cancer patients medicine that could prolong their lives 6 month. The government have no incentive to spend 10000 dollar extra on there drugs.
Regardless, it's not like it is any surprise to Apple, or any other multinational company, that they have to pay tax when the money is repatriated. Surely they knew this when they were (are) making money hand over fist overseas?
EDIT: I a word.
Is it wrong that Apple makes money "hand over fist"?
Do you understand that its good that private companies makes money? Do you know this simple economic fact that ALL taxes are generated from private companies and their employees?
Isn't it good that Apple want to take the money "home" and that they are ok to pay the government their protection fee? They are just negotiating the "protection" fee.
Todays government is worse then the mafia.
Lol, $689,000 in interest. Serves the government right for being so slow.
The government doesn't care about the Interest. That issue was decided years ago that is was going to have to pay that. The government really cared about the other issue that Apple lost on. Had the government lost on that, many companies including Apple, would have had to pay significantly less taxes on foreign income. This was a win for the government.
Moreover, if Apple would pay it's taxes, maybe the government could afford to do things quicker. :O)
Every few years businesses start lobbying for a tax holiday on their earnings. As other posters on this board have noted, they went into business knowing this repatriation tax existed, but want to weasel out of it when it comes time to actually bring the money home.
Repatriation money is taxed as income, and for Apple that would be at the 35% rate. This is not in addition to the taxes they already paid to the originating country, however.
Let's say Apple earned $100 in Australia, and their tax rate is 30%. Apple would have paid $30 in taxes, and held on to $70. Now, when they repatriate that money, their tax burden would be $35 (35% of $100), but they'd get a $30 deduction for taxes already paid. (Anyone here who pays state taxes gets the same federal deduction).
Add in the complex system of laws and dedication, write-offs, etc, and the average American company in the highest tax bracket pays an effective tax rate of around 25%, putting them right in the middle of the world's corporate tax rates.
The US is pretty much alone in repatriation taxes. You can agree or disagree that it's a good idea. What you can't disagree with is that Apple knows full well that the repatriation tax exists, yet, for some reason, maintains their headquarters in the US.
Is it wrong that Apple makes money "hand over fist"?
Do you understand that its good that private companies makes money? Do you know this simple economic fact that ALL taxes are generated from private companies and their employees?
Isn't it good that Apple want to take the money "home" and that they are ok to pay the government their protection fee? They are just negotiating the "protection" fee.
Todays government is worse then the mafia.
Really? Fact. Companies today pay lower taxes than any other point of time in our Countries histories. The largest bank in our Country, Bank of America paid zero federal taxes last year. The same was true with GE. This is odd, since companies are treated as individuals under the Constitution and reap more representation from the government than the living breathing people obtain.
Moreover, since the founding of this Country there was an import tax, which essentially made it so american industry didn't have to compete with slave labor. In the greatest economic times our Country has seen, many of these companies used their new found wealth to do away with these taxes in the guise of so called free trade agreements. As any idiot can figure out, since the passing of the free trade agreements american manufacturing shipped to all the countries our government has been for years claiming abuse people, and worst undermine our way of life. I didn't see the US rush our military into China after the Chinese murdered potentially thousands of students for protesting in Tiananmen Square. Instead, we gave China our entire manufacturing economy and all the taxes that go with it. If I recall, this was sold to us by claiming it would create more jobs right here in the US. I wonder when that will be happening.
Further, since the beginning of our Country our so called Founding Father's understood the value of the raw materials in our Country. We didn't want foreign Countries gobbling them all up, so we imposed an export tax. Currently, the same companies have lobbied away the export tax on things such as steel and oil. We claim there is an oil shortage in our Country, but a lot of the oil mined from public lands is actually sold overseas. We get to pay for the expensive stuff coming from overseas.
The loss of these taxes that have been around since the beginning of time in our Country is the reason you see government struggling to pay police, firefighters, and maintain roads. Ironically, the Chinese government is using its new found wealth to loan money to the US, which we the tax payers get to pay back. At some point last year, Apple had more cash on hand then the US government.
I love Apple, but the tax break on foreign earned income is ridiculous. Apple isn't going to use that money to patriotically benefit the rest of us back home. It is going to use the money to buy stock grants to give to its executives. Don't get me started on how companies lobbied to screw us over in the stock market.
"Taxes are what we pay for civilized society" Oliver Wendell Holmes, Jr.
I would have never guessed this board was filled with so many libertarians!
This.
However Apple, like many other companies including Google and Microsoft, use the Double Irish tax loophole that assures them they pay virtually no taxes on those overseas profits either. They can't have it both ways; you either pay taxes in the US or you pay them overseas.
http://en.wikipedia.org/wiki/Double_Irish_Arrangement
http://news.cnet.com/8301-30684_3-20020329-265.html
I'm with California here. Either Apple agrees to pay the tax rates owed, or they keep the money overseas.
Besides, such a tax holidays was granted once before. Instead of "spurring the economy" here in the US, as proponents of the holiday will say, companies used the savings to buy back stock and give their CEO bonuses instead of hiring new people or investing in R&D. In fact after a $150 BILLION dollar tax break, the top 15 companies actually laid people off.
http://www.businessweek.com/news/201...et-repeat.html
In an economy where everybody seems worried about where every penny is spent, how about we start looking at where the pennies are getting lost in the system instead of trying to give a $300 billion tax break to companies.
I am not 100% sure, but the case with Double Irish with Apple isn't exactly the same as Microsoft or Google. Which uses IP to dodge the Profits tax.
Governments has actually gaining Sales Tax from every Apple products sold if they have VAT, like UK, or Import Tax like China.
So, like what others have said, Why Should apple pay tax again? Even a 5% is pretty god damn good deal for the government.
The primary job of any government is to maintain law and order in a given geographical area, and that is the main reason they receive taxes. Therefore taxes should go to the government in the area you earned the money. US companies operating overseas should pay taxes to the local government not the US government.
The point you're missing is that Apple is already paying taxes in all the countries they do business in - according to the laws of that country. The US wants Apple to pay taxes in the foreign country PLUS an additional 35% if they bring the after-tax profits to the U.S. THAT is what is being discussed.
However Apple, like many other companies including Google and Microsoft, use the Double Irish tax loophole that assures them they pay virtually no taxes on those overseas profits either. They can't have it both ways; you either pay taxes in the US or you pay them overseas.
http://en.wikipedia.org/wiki/Double_Irish_Arrangement
http://news.cnet.com/8301-30684_3-20020329-265.html
I'm with California here. Either Apple agrees to pay the tax rates owed, or they keep the money overseas.
Besides, such a tax holidays was granted once before. Instead of "spurring the economy" here in the US, as proponents of the holiday will say, companies used the savings to buy back stock and give their CEO bonuses instead of hiring new people or investing in R&D. In fact after a $150 BILLION dollar tax break, the top 15 companies actually laid people off.
http://www.businessweek.com/news/201...et-repeat.html
In an economy where everybody seems worried about where every penny is spent, how about we start looking at where the pennies are getting lost in the system instead of trying to give a $300 billion tax break to companies.
The point you're missing is that Apple is forced to pay the legal taxes in each country. If Ireland wants pro-business tax rules in order to encourage investment, that's their right as a sovereign country. Apple pays what Ireland tells them to pay.
And then the U.S. wants 35% more for simply transferring cash.
The government doesn't care about the Interest. That issue was decided years ago that is was going to have to pay that. The government really cared about the other issue that Apple lost on. Had the government lost on that, many companies including Apple, would have had to pay significantly less taxes on foreign income. This was a win for the government.
Moreover, if Apple would pay it's taxes, maybe the government could afford to do things quicker. :O)
Apple has paid its taxes - in fact, Apple OVERpaid - which is why the government must refund their money.
As for the rest, you are misunderstanding the argument. It's a matter of timing, not whether Apple should pay taxes or not. To understand the issue, let's make up some numbers:
Let's say that Apple earned $10 B in global profits in 2010. For simplicity, we'll say that $5 B was in the U.S. and $5 B in Japan (obviously, the real situation was more complex, but it won't change the result). Now, since Apple Japan is a separate corporation, they issue dividends AFTER their fiscal year has ended. Let's say that Apple Japan pays $2 B in taxes, reinvests $2 B, and sends $1 B to Apple Inc as a dividend. But that dividend is actually paid in 2011.
Apple wants to pay 2010 taxes on its $5 B in U.S. income plus the $1 B in dividends, so it would pay U.S. taxes on $6 B for 2010. The argument is that since Apple Japan is a wholly owned subsidiary, the income is earned in 2010, even though the dividend isn't paid until later.
The government says "no, dividend income is taxed when it is paid". For example, let's say that you own 10,000 shares of company xyz stock. The company earns a record profit in 2010 and pays a dividend in 2011. That dividend is taxable to you for 2011, NOT 2010 even though the company paid tax on the record profits in 2010.
One could make arguments either way, but I think the government's argument is a little stronger, but can't claim to have done a detailed analysis of the tax laws.
Why does it matter? Because Apple's effective tax rate was higher in one year than in the other for various reasons. If the effective tax rate is higher in 2011 than in 2010 (or 1990 vs 1989 in this case), then you'd obviously prefer for the income to occur in the earlier year.
Really? Fact. Companies today pay lower taxes than any other point of time in our Countries histories.
That is not correct.
http://www.taxpolicycenter.org/taxfa....cfm?Docid=213
Corporate income tax rates were lower than today up until 1932 and also for the period between 1988 and 1992.
That's based on highest tax RATE. If you look at actual corporate taxes paid, your statement is also incorrect:
http://www.nytimes.com/imagepages/20...ml?ref=economy
Total corporate taxes (as a percent of GNP) were lower than today in 2001-02 and 1982-87 and before 1913 when the corporate income tax was implemented (and probably also the periods between 1913 and 1932, although I don't have the data handy).
I'm under the impression Apple doesn't employ the double fisted Irish or Dutch oven like MS and Google.
If they aren't, they are doing a disservice to their shareholders by not working to minimize their tax obligations.
It is a shame only a few people on the thread understand the core issue. Even if all the repatriated funds go to the CEOs, it is still money in the US economy as long as they spend a reasonable percentage of it.
The alternative for US and California is more internationally-diversified operations so they can avoid expenditures here and use the cash elsewhere. That eliminates jobs in the most simplistic analysis.
All you can reasonably argue for the double-taxation is that it helps avoid concentration of wealth somewhat.
And that's fair enough, but if Apple wants to move that money they should pay the taxes that entails. Their customers don't get a "tax holiday," why should they?
totally different kind of taxes.
This would be more like if, for whatever reason, you had a bank account in the UK and the US and you wanted to move it all to your US bank. But the US was calling that 'income' and wanted to change you income tax on it, even though you would have paid the appropriate tax in the UK (which could be nothing). They are trying to do the same thing to companies and while we love to say "yeah still it to the big boys" it means that they won't move the money. And by not moving the money, which is sometimes the bigger part of their cash (such as with Apple) there goes the funds to do things like build factories here in the US which everyone is screaming Apple simply must do.
Now do I think it would be fair to have two rates of interest if they are going to insist on something, sure. How about 10% for a flat move but only 5% if you are actually using the money to benefit the country in some major way, like a factory.
totally different kind of taxes.
This would be more like if, for whatever reason, you had a bank account in the UK and the US and you wanted to move it all to your US bank. But the US was calling that 'income' and wanted to change you income tax on it, even though you would have paid the appropriate tax in the UK (which could be nothing).
Nope. It's more like if you have a job in UK and you pay a lower income tax in UK and then you've to pay the difference btw US and UK tax to the US also. Because, what Apple's earning is income.
They are trying to do the same thing to companies and while we love to say "yeah still it to the big boys" it means that they won't move the money. And by not moving the money, which is sometimes the bigger part of their cash (such as with Apple) there goes the funds to do things like build factories here in the US which everyone is screaming Apple simply must do.
You're dreaming if you think Apple or other companies will 'build factories in US' if we give them a break on this tax. They just build factories in the lowest cost countries while getting protection from US military and refuse to pay tax to the US.
For example, if Apple made a profit of $100 in a foreign country and that country's tax rate was 10%, Apple would pay that foreign country $10 on profit earned there. Apple then repatriates that profit back to the US that has a tax rate of 35%. Apple would only pay $35 MINUS a $10 tax credit it already paid in taxes to a foreign country. So Apple is being effectively taxed 35% just as if it was a domestic profit. They are just splitting the payment between two different collectors. They aren't being taxed twice, they are only making two payments on what they would otherwise have paid in one payment if that profit was generated locally.
Many people across the US seem to be under the impression that corporations like Apple get taxed 10% from the foreign country AND 35% from the US, effectively a 45% tax rate, which is completely incorrect.
And of course, this is all oversimplified because many corporations make profit in any number of countries where they can offset US taxes with excess tax credits from profits made in countries with higher taxation. Not to mention other loopholes.
So stop spewing this double-tax crap.
SOURCE: http://www.taxpolicycenter.org/brief...ional-work.cfm
totally different kind of taxes.
This would be more like if, for whatever reason, you had a bank account in the UK and the US and you wanted to move it all to your US bank. But the US was calling that 'income' and wanted to change you income tax on it, even though you would have paid the appropriate tax in the UK (which could be nothing). They are trying to do the same thing to companies and while we love to say "yeah still it to the big boys" it means that they won't move the money. And by not moving the money, which is sometimes the bigger part of their cash (such as with Apple) there goes the funds to do things like build factories here in the US which everyone is screaming Apple simply must do.
Now do I think it would be fair to have two rates of interest if they are going to insist on something, sure. How about 10% for a flat move but only 5% if you are actually using the money to benefit the country in some major way, like a factory.
Except you neglect to mention you get a tax credit of whatever foreign tax you already paid on that money to the UK.
The point you're missing is that Apple is already paying taxes in all the countries they do business in - according to the laws of that country. The US wants Apple to pay taxes in the foreign country PLUS an additional 35% if they bring the after-tax profits to the U.S. THAT is what is being discussed.
The point you're missing is that Apple is forced to pay the legal taxes in each country. If Ireland wants pro-business tax rules in order to encourage investment, that's their right as a sovereign country. Apple pays what Ireland tells them to pay.
And then the U.S. wants 35% more for simply transferring cash.
But the point you're missing is that Apple gets a tax credit of whatever they already paid to that foreign government. So it's not like they pay 10% to one country and then 35% MORE to the US. When they have to pay the 35% they get a tax credit of the 10% they already paid to the other government. So Apple's tax rate is effectively 35% total paid to all parties, not 45% or something else absurdly astronomical.