Apple encouraged to borrow against its $94B in overseas cash for greater flexibility

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Comments

  • Reply 21 of 51
    tbelltbell Posts: 3,146member
    No, let's not make this about the taxes they've already paid.

    BS. First Apple gets to write the taxes paid in bringing the money back here in the Country the money rests. Second, companies like Apple benefit heavily from US infrastructure and diplomacy overseas. Third, Apple gets to write off foreign expenses here.
  • Reply 22 of 51
    tallest skiltallest skil Posts: 43,388member


    Originally Posted by TBell View Post

    BS.


     


    Okay, do you have evidence that Apple has not paid taxes on the money they have earned both domestically and abroad? It can be even one country in which they operate; not all, of course.






    Second, companies like Apple benefit heavily from US infrastructure and diplomacy overseas.



     


    Okay. … So? I don't understand why this matters (or where it would be applicable, in this case).


     


    Say I go to Ireland, buy an EU-style license plate, and bring it back here. I paid tax there. Do I have to pay another tax in US-equivalent pricing just to bring it back? If so, why? 

  • Reply 23 of 51


    Paying taxes that can be "legally avoided" would leave Apple open to legal action by shareholders for unnecessarily incurring expenses (taxes).Has there ever been a business that paid taxes that were not require to be paid?

  • Reply 24 of 51
    maestro64maestro64 Posts: 5,043member

    Quote:

    Originally Posted by BlueDjinn View Post



    Or they could just, you know, pay their f*cking taxes.



    On top of it being the right thing to do, think of the PR/image boost of a huge global corporation actually acting like a patriotic American citizen should?



    My guess is that they'd see quite a sales spike that would counteract a chunk of the extra taxes that they'd be paying.


    You know that if you work outside the US and make money out side the US you are still required to pay taxes on that money, So you elected representative saw fit to make sure you pay your taxes no matter where you earn your money. They also saw fit to allow companies to not pay taxes on money earned elsewhere as long as they do not deposit the money into a US bank.


     


    So it is not Apple you should be upset with it is your elected official who created the double standard. Why not just remove the double standard,  either let us work elsewhere and not pay taxes if we leave the money off shore or tax companies on everything they make not matter where.


     


    Just so you know if you make money elsewhere an pay taxes there the US will not tax you if what you paid was more than what the US would have taken from you. if you paid a lot more, the US will not refund you the extra either.


     


    On a different note, go figure someone in banking is suggesting the Apple borrow money that is not a self serving suggestion. Why borrow when they can pay cash for anything they want. 

  • Reply 25 of 51

    Quote:

    Originally Posted by Tallest Skil View Post





    Originally Posted by BlueDjinn View Post

    Or they could just, you know, pay their f*cking taxes.



    On top of it being the right thing to do, think of the PR/image boost of a huge global corporation actually acting like a patriotic American citizen should?



    My guess is that they'd see quite a sales spike that would counteract a chunk of the extra taxes that they'd be paying.


     


    No, let's not make this about the taxes they've already paid.



     


    That's funny, I haven't read anywhere that Apple has repatriated their foreign holdings and paid US taxes on it. Where have you read that?


     


    BlueDjinn was obviously saying if Apple wants to bring its foreign money to the US, they should stop waiting/lobbying for some tax holiday from politicians and just bring it here and pay whatever they owe as required by law. Personally, I don't think Apple cares to nor needs to bring foreign money to the US. If they don't want to pay taxes on it, don't bring it to the US. Seems simple to me.


     


    Quote:

    Originally Posted by PhilBoogie View Post




    Quote:

    Originally Posted by BlueDjinn View Post



    Or they could just, you know, pay their f*cking taxes.



    On top of it being the right thing to do, think of the PR/image boost of a huge global corporation actually acting like a patriotic American citizen should?



    My guess is that they'd see quite a sales spike that would counteract a chunk of the extra taxes that they'd be paying.




    I think they pay their bills from oversees countries with the money that is in that specific country. Makes sense to me, otherwise they would need to pay taxes to bring all the money home and then spend it on foreign expenditures. What am I missing from your post? Patriotic, ok, but why state they should pay their taxes? They are paying their taxes.


     


    You're right. They are paying their taxes. I believe BlueDjinn was referring to if Apple decides to move the money to the US, they should just pay the taxes and move it.


     


    Quote:

    Originally Posted by robogobo View Post




    Quote:

    Originally Posted by BlueDjinn View Post



    Or they could just, you know, pay their f*cking taxes.



    On top of it being the right thing to do, think of the PR/image boost of a huge global corporation actually acting like a patriotic American citizen should?



    My guess is that they'd see quite a sales spike that would counteract a chunk of the extra taxes that they'd be paying.


    Or you could, you know, make sure you know what you're talking about before spouting tripe. They aren't evading taxes. It's not like they're hiding earnings in an offshore account. That money was foreign earned and taxes were paid where it was earned.


     


    Maybe you shouldn't read things into what someone is saying when they are obviously NOT saying what you think they are. BlueDjinn didn't say Apple was evading paying taxes. He was stating if they want to move the money to the US, they need to owe up and pay the taxes required to move it.


     


    Quote:

    Originally Posted by jragosta View Post




    Quote:

    Originally Posted by BlueDjinn View Post



    Or they could just, you know, pay their f*cking taxes.



    On top of it being the right thing to do, think of the PR/image boost of a huge global corporation actually acting like a patriotic American citizen should?



    My guess is that they'd see quite a sales spike that would counteract a chunk of the extra taxes that they'd be paying.




    My guess is that you don't have any idea what you're talking about. Oh, wait. It's not a guess - it's obvious.



    Apple paid their taxes. In fact, last year, Apple paid 2.5% of ALL US corporate income tax. There is no US tax owed on money that is earned overseas - according to the US tax code and essentially every country on the planet. If the US government started taxing income earned in other countries, it would trigger a massive global trade war-they have no right to do that.



    Now, if you have any evidence that Apple has not paid the taxes that they're required to pay, please feel free to present it. Otherwise, in the future, please learn about a topic before spouting off.


     


    My guess is you totally took his statement the wrong way. Apple paid their taxes. If Apple wants to move their foreign money to the US, they'll have to pay more taxes. Is that so hard to understand?


     


    Quote:

    Originally Posted by fahlman View Post




    Quote:

    Originally Posted by BlueDjinn View Post



    Or they could just, you know, pay their f*cking taxes.



    On top of it being the right thing to do, think of the PR/image boost of a huge global corporation actually acting like a patriotic American citizen should?



    My guess is that they'd see quite a sales spike that would counteract a chunk of the extra taxes that they'd be paying.


    Apple has paid their f*cking taxes in the country where that money was generated. It's not "the right thing to do". Apple, as you stated, is a global company. They are not obligated to bring money generated in a country outside of the United States back in to the United States. What don't you understand about that?



     


    BlueDjinn wasn't mandating that Apple bring that money to the US. He was commenting on all these analysts and their opinions on what Apple should do with their foreign-earned money. BlueDjinn was offering another option: bring the money to the US, pay the taxes required to do so.


     


    *


     


    Why is everyone on the crazy train today? Someone offers an opinion and everyone reads too much into it and jumps all over them. Could it have been stated more eloquently? Sure.

  • Reply 26 of 51
    gtbuzzgtbuzz Posts: 129member
    Why borrow against the family farm if you don't need to do so. I know this is a little different, but when I paid my house & cars off, I said never again. The lenders would make more, but we don't care about the investment banks. Apple knows what to do and will do it when the time is right.
  • Reply 27 of 51
    tallest skiltallest skil Posts: 43,388member


    Originally Posted by silverpraxis View Post

    Could it have been stated more eloquently? Sure.


     


    It could have also been stated accurately. Apple has paid the taxes required on that money.

  • Reply 28 of 51
    jragostajragosta Posts: 10,473member
    mstone wrote: »
    Isn't Apple already in debt? They have <span style="font-family:Arial, sans-serif;line-height:normal;text-align:right;white-space:nowrap;">402.32B in liabilities (market capitalization)</span>

    Not even close. Market cap is not debt, nor is it a liability.

    Apple had about $58 M in liabilities at the end of the last period. The largest buckets were accounts payable and deferred income taxes.
  • Reply 29 of 51
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by silverpraxis View Post




    If they don't want to pay taxes on it, don't bring it to the US. Seems simple to me.


     



    I'm not a finance guy but what would be the problem with just wire transferring to the US funds drawn on foreign banks?


     


    For example the contractor building the data center in the US could get paid from an account in a foreign country?


     


    I do that all the time, but in the reverse direction.

  • Reply 30 of 51
    tallest skiltallest skil Posts: 43,388member


    Originally Posted by jragosta View Post

    Market cap is not debt, nor is it a liability.


     


    The way the market (and some here) is (are) treating Apple, you'd think otherwise. image 


     


    Apparently these individuals believe they're personally entitled to a portion of the hundreds of billions in market cap Apple has lost recently.

  • Reply 31 of 51
    aaarrrggghaaarrrgggh Posts: 1,609member
    fahlman wrote: »
    Apple has paid their f*cking taxes in the country where that money was generated. It's not "the right thing to do". Apple, as you stated, is a global company. They are not obligated to bring money generated in a country outside of the United States back in to the United States. What don't you understand about that?

    Technically, they have paid the taxes they are legally required to pay. That doesn't necessarily mean they have paid the taxes in the country the profit was generated. (Double irish with a dutch sandwitch or something...)

    That said, paying more taxes than you are required is not keeping your owner's interests at hand. Have the US give a tax holiday, and then they can issue a special dividend. THEN, all their shareholders can choose to give the government extra money that they aren't otherwise obligated to do.
  • Reply 32 of 51
    bizzarebizzare Posts: 62member
    They borrow from themselves, they place their cash into an investment company they own, and from that same company they borrow the money.
    The rate they borrow at would probably be better than the one they are getting today from their cash holdings.

    I suggested this a few months ago.

    With that money they should buy over 20 percent of the shares outstanding.

    Hope it happens
  • Reply 33 of 51
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by jragosta View Post




    Quote:

    Originally Posted by mstone View Post



    Isn't Apple already in debt? They have 402.32B in liabilities (market capitalization)




    Not even close. Market cap is not debt, nor is it a liability.



    Apple had about $58 M in liabilities at the end of the last period. The largest buckets were accounts payable and deferred income taxes.


    How many columns are there in a balance sheet? Liabilities, assets and what else? 

  • Reply 34 of 51
    quinneyquinney Posts: 2,528member
    Apple should borrow money at low costs against its significant overseas cash position to avoid a tax hit when repatriating that cash, one analyst believes.

    Ben A. Reitzes with Barclays believe it's time Apple strongly consider "tapping the debt markets," which would allow it to borrow against the $94 billion in cash the company has overseas, $40.4 billion of which is untaxed.

    :lol: Anant must still be busy kicking that other guy's ass.
  • Reply 35 of 51

    Quote:

    Originally Posted by mstone View Post


    I'm not a finance guy but what would be the problem with just wire transferring to the US funds drawn on foreign banks?



    Sure, you can borrow abroad (even in US$), and have them send the funds to the US. (Sometimes, US$ borrowing costs for some companies can be cheaper abroad than in the US -- hence the existence of a "currency swaps" market).


     


    But if it's your (i.e., the company's) own cash that is wired back to the US, taxes will have to be paid on it at the US corporate tax rate.

  • Reply 36 of 51

    Quote:

    Originally Posted by bizzare View Post



    The rate they borrow at would probably be better than the one they are getting today from their cash holdings.


    I doubt it. Apple will have to pay a premium over treasury bonds (no company can borrow cheaper than the US government in US$). 10-year Tbonds are yielding over 2% currently, and Apple's earnings on cash are around 1% (as I vaguely recall).

  • Reply 37 of 51

    Quote:

    Originally Posted by mstone View Post


    How many columns are there in a balance sheet? Liabilities, assets and what else? 



    Two.


     


    Assets (stuff you 'own', carried mostly at historical cost) and Liabilities & Equity (stuff you 'owe').

  • Reply 38 of 51
    mechanicmechanic Posts: 805member


    Im with a lot of the comments here what a stupid suggestion, go into debt?  I read that apple already put aside the taxes for those overseas funds and if they did bring the money back to the US which I doubt  they could and not change there bottom line.   But being that 2/3rds of apples money is made outside the us I think it should stay there.


    They paid 6 billion in US taxes last year so they paid there share on the US portion of there money.

  • Reply 39 of 51
    mechanicmechanic Posts: 805member

    Quote:

    Originally Posted by mstone View Post


    How many columns are there in a balance sheet? Liabilities, assets and what else? 



    Apple publishes an abbreviated version of theres if anyone wants to look.


     


    I think you can get the full version at the SEC.


     


    Here is a link to the abbreviated version pdf for Q1 2013:  http://images.apple.com/pr/pdf/q1fy13datasum.pdf


     


    Sorry that first one is just the earnings  here is the full version with everything:  http://files.shareholder.com/downloads/AAPL/2362481347x0x630682/0629c90d-47c2-4ca6-8578-33ac095623cd/AAPL_Q1_10Q_01.24.13.pdf

  • Reply 40 of 51
    tbelltbell Posts: 3,146member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Okay, do you have evidence that Apple has not paid taxes on the money they have earned both domestically and abroad? It can be even one country in which they operate; not all, of course.



     


     


    You are equating legality with morality. I never claimed Apple didn't pay the taxes it was legally required to pay. My point is that Apple might operate in the world, but it is a United States company. A US company that benefits from lobbying efforts that create loop holes in the tax law to give companies tax benefits regular citizens do not have. Further, these same tax laws encourage US companies to do business overseas at the expense of having it conducted in the US. The US government should not reward companies with tax breaks when they relocate operations overseas. Moreover, in the height of the economic boom in the eighties US companies lobbied Congress to do away with import taxes designed to keep industry and technological superiority in the US and with its democratic partners. This import taxes stood in place since the founding of this Country and was fully embraced by the people who created this Country. The economy has not recovered since. Now companies like Apple on top of all the other tax breaks and legal loop holes allowing for tax havens US companies get, want a tax holiday to repatriate their earnings that US tax payers helped provide in terms of the tax breaks they get? It is greed at its best. 


     


     


    Further, the US spends billions every year to implement international laws that primarily benefit US companies. It spends millions sending out the US Trade representative to strong arm countries like Canada to enhance and enforce US IP interests at the expense of the wishes of people in those Countries. We fight wars so US companies like Apple have expanded markets to operate in. All this stuff is expensive, and US companies want more tax breaks? Bank of America, the largest Bank in the world doesn't pay any federal income taxes. 


     


    I think it was Oliver Wendell Holmes who wrote, "Taxes are what we pay for civilized society." US politicians should shut down the tax loop holes companies like Apple enjoy. The IRS and State taxing entities spend little time policing big companies because of their lawyers. For instance, Apple has had several feuds with taxing entities. Apple tied both the IRS and the State of California up for over ten years on various tax matters. Here is an interesting article discussing how Apple operates to avoid taxes.  Essentially when you buy an iPhone, no matter where you live, the profit goes to Nevada where there is a zero percent corporate tax rate. It also routes money through several different countries to avoid taxes. Smart for sure, but not fair to the rest of us. 

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