As Apple holds $138B overseas, US Senate considers one-time tax break for repatriating cash

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Comments

  • Reply 21 of 112
    jungmarkjungmark Posts: 6,926member
    Basically Apple is telling the government that we have cheated you out of taxes and now want amnesty.Letting Apple bring home this 138B will not create a single job that they where not already planning on creating. Its great for Apple but whats in it for America?

    Apple isn't cheating. The money was earned outside the US.
    quanster wrote: »
    Why kill the tax rate? Individuals are getting tax on their worldwide earning. It is bullshit that corporations get a tax holiday. When is the last time that individuals get a tax holiday? I am all for tax reform but it should happen to everybody - individuals and corporations alike. Simplify the tax code to a flat tax on all earnings.
    A few states have sales tax holidays for a day or so on certain items.
  • Reply 22 of 112
    rob53rob53 Posts: 3,241member
    Quote:

    Originally Posted by Farshad Foroudi View Post



    Basically Apple is telling the government that we have cheated you out of taxes and now want amnesty.Letting Apple bring home this 138B will not create a single job that they where not already planning on creating. Its great for Apple but whats in it for America?

    Apple, and others, are not cheating the US government out of anything. This money was earned outside the US so why should the US be able to tax it? I used to work for a company in California, moved to Washington state and telecommuted to the CA company. Since I always worked in WA I never had to pay CA state income tax even though my business was in CA. This is the same thing for Apple. They live in CA/USA but their "job" paid them money outside the US, therefore, why should they have to pay US taxes? Once this money is back in the US, Apple will be responsible for paying US taxes on the interest gained from this money but that should be it. Apple pays taxes in the countries that charge them taxes (per Tim Cook). Why should they be double-taxed?

  • Reply 23 of 112
    macvictamacvicta Posts: 346member
    Are you kidding? Look at the list of who's been leading the charge against this in the past few years: it's folks like Max Baucus, Kent Conrad, Barbara Boxer, and Carl Levin in the Senate.

    (I won't post on this specific issue anymore, since it runs the risk of turning the thread political).

    Max Baucus and Kent Conrad opposing the tax holiday? I find that hard to believe. Sounds like a bunch of baloney.

    The Democrats are always willing to make sacrifices to get the job done. It's Republican politicians deathly afraid of their lunatic base who pull legislation rightward until it becomes toxic and impossible. They don't want to end up like Eric Cantor.
  • Reply 24 of 112
    flaneurflaneur Posts: 4,526member
    Quit the political nonsense. It's largely the Democrats that are against the repatriation tax holiday.

    You just told him to quit the political nonsense. That's enough. No need to add some of your own.
  • Reply 25 of 112
    bugsnwbugsnw Posts: 717member

    I'd do a simplified two-tier flat tax. I would be carving into regulations with the aim of getting govt. out of the way of capitalism. No complicated VAT or weird mumbo-jumbo that no one understands. No need for accountants. And, bonus, very difficult to politicize. The labyrinth tax code gives rise to political favors and endless tinkering as one party or another shoves benefits to their base of voters (such as this suggested tax holiday).

     

    Get politicians out of it. Make it simple. Then, if it needs adjustment, it's a transparent process. Want to move it from 12 to 13%? Then we have that debate. There is no opaque tinkering with various deductions or special treatment.

     

    Simplify. Lower the rates. Broaden the tax base. Get out of the way and watch the economy thrive. A 25 T economy will throw about 5 T into the govt. coffers. Let's aim for growth.

  • Reply 26 of 112
    tallest skiltallest skil Posts: 43,388member
    Originally Posted by Farshad Foroudi View Post

    Basically Apple is telling the government that we have cheated you out of taxes and now want amnesty.Letting Apple bring home this 138B will not create a single job that they where not already planning on creating. Its great for Apple but whats in it for America?

     

    You don’t have the first clue what you’re talking about. Stop spewing FUD.

  • Reply 27 of 112
    zoetmbzoetmb Posts: 2,654member
    Quote:

    Originally Posted by Farshad Foroudi View Post



    Basically Apple is telling the government that we have cheated you out of taxes and now want amnesty.Letting Apple bring home this 138B will not create a single job that they where not already planning on creating. Its great for Apple but whats in it for America?

    While I'm in general opposed to a tax holiday, it is not accurate to say that Apple has cheated the U.S. Government out of taxes.   Apple is following the law as it is today.   The law may be unfair, as is much of U.S. tax regulations, but it is what it is.

     

    However, I do believe that the laws are out of date and need to be revised.   A large percentage of Fortune 500 companies do not pay any U.S. income taxes and that's one of the reasons the Government is starved and we don't have money to spend on infrastructure.   Also, it would be near impossible to reduce personal and small business income taxes unless large corporations start paying their fair share.

     

    But it's a complex problem.   Even if you lowered the corporate tax rates, if you tax U.S. companies on worldwide income, many would probably incorporate somewhere else (many already have).    Maybe what it really comes down to is that in the modern world, companies should pay taxes on where the money is earned, not where the company is incorporated, with a lower tax rate on capital that is moved from one jurisdiction to another to encourage such movement.   That would end the foolishness of incorporating in tax havens such as Ireland or the Bahamas.   

     

    Unfortunately, with our do-nothing Congress, no substantive changes are ever going to get made.   If Republicans win the Senate in November, you might see a reduction in corporate tax rates and a roll-back to the recent increase in the capital gains rates, but that will have the effect of increasing the deficit.   

  • Reply 28 of 112
    joelsaltjoelsalt Posts: 827member
    Quote:
    Originally Posted by sog35 View Post

     

     

    That makes no sense.

     

    Corps profits are transferred to shareholders.  Those shareholder then pay taxes on dividends and capital gains.  Basically the Corporations tax burden is paid by shareholders.  So why the hell does the Corp need to pay ADDITIONAL TAXES?


    Not to mention the products they make are taxed (at least where I'm from and in at least some states) AND the employees are all taxed on their income.  I'm not necessarily arguing for low corporate taxes per se, but corporations do get taxed at LEAST 3 ways, 4 if you count sales

  • Reply 29 of 112
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by richlo View Post



    As the world becomes global in economy the tax laws need reforming otherwise this same problem will present itself in another few years.

    Right. That is why they should not consider a tax holiday now. It sets a bad precedent. All the corporations will just wait for the next tax holiday.

     

    If the US wants a steady stream of tax revenue they can just lower the regular tax rate sufficiently to encourage corporations to bring their foreign profits back to the US. Not a once in a while tax holiday.

  • Reply 30 of 112
    Quote:

    Originally Posted by sog35 View Post

     

     

    Individuals are taxed on Corporate dividends and capital gains. 

     

    With corporate tax you are taxing DOUBLE.  Once for the Corp and second for the individuals who own the corp. 


    This is because corporations are considered a separate entity from the shareholders.  It's not just corporations that have to run into these double taxations.  Your income is tax and when you turn around and spend it, you have to pay sale tax.  And the person who have earned your money pays income tax on that money.  It goes on and on.  The supreme court reaffirmed that corporations are individuals so they have to pay taxes on their profits.  In turn, they have numerous benefits and one big one is political contribution.  So don't buy the bullshit how corporations have it tough.  

  • Reply 31 of 112
    crowleycrowley Posts: 10,453member

    Can't believe anyone would think this short-termism is a good idea.  Fix the code to be effective, don't grant "holidays" just to get a one-off spike in revenue.  Terrible state of administration if this is being welcomed.

  • Reply 32 of 112
    boltsfan17boltsfan17 Posts: 2,294member
    Quote:

    Originally Posted by MacVicta View Post





    Max Baucus and Kent Conrad opposing the tax holiday? I find that hard to believe. Sounds like a bunch of baloney.



    The Democrats are always willing to make sacrifices to get the job done. It's Republican politicians deathly afraid of their lunatic base who pull legislation rightward until it becomes toxic and impossible. They don't want to end up like Eric Cantor.

    Wow, you can't be serious. You need to take off your Obama blinders. 

  • Reply 33 of 112
    richlrichl Posts: 2,213member
    Quote:
    Originally Posted by sog35 View Post

     

    With corporate tax you are taxing DOUBLE.  Once for the Corp and second for the individuals who own the corp. 


     

    That depends on whether the corp is profitable, pays a dividend and whether the stock prices goes up or down. It's a better strategy to take a little out at each stage otherwise some creative accounting could result in zero tax being paid.

  • Reply 34 of 112
    tjwaltjwal Posts: 404member
    richlo wrote: »
    As the world becomes global in economy the tax laws need reforming otherwise this same problem will present itself in another few years.

    I would like a tax holiday too. Since that is unlikely there is no reason why corps should get one. Simple solution levy the tax regardless of whether they repatriate the earnings. That is about the only way we can unilaterally eliminate the incentive to leave earnings overseas.
  • Reply 35 of 112
    crowleycrowley Posts: 10,453member
    Quote:

    Originally Posted by sog35 View Post

     

     

    Individuals are taxed on Corporate dividends and capital gains. 

     

    With corporate tax you are taxing DOUBLE.  Once for the Corp and second for the individuals who own the corp. 


    That assumes the rather simplistic notion that all taxes are equal, so being taxed once is better than being taxed twice.  Taxes are not equal, I pay far more in income tax than I do in National Insurance (roughly akin to Social Security in the US).  I'd rather pay three lots of National Insurance than one of Income tax.  Likewise with capital gains, the rate on that is much, much lower than on regular employment income.

     

    So DOUBLE (caps yours) tax isn't a big deal, since SINGLE (caps mine) could be even greater, it's the specifics of the taxes that matter.  The government weights the taxes to achieve specific things, which is why there are multiple streams of taxation at different points.

  • Reply 36 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    quanster wrote: »
    Why kill the tax rate? Individuals are getting tax on their worldwide earning. It is bullshit that corporations get a tax holiday. When is the last time that individuals get a tax holiday? I am all for tax reform but it should happen to everybody - individuals and corporations alike. Simplify the tax code to a flat tax on all earnings.

    The income tax needs to go away. Look at www.FairTax.org
  • Reply 37 of 112
    zoetmbzoetmb Posts: 2,654member
    Quote:

    Originally Posted by bugsnw View Post

     

    I'd do a simplified two-tier flat tax. I would be carving into regulations with the aim of getting govt. out of the way of capitalism. No complicated VAT or weird mumbo-jumbo that no one understands. No need for accountants. And, bonus, very difficult to politicize. The labyrinth tax code gives rise to political favors and endless tinkering as one party or another shoves benefits to their base of voters (such as this suggested tax holiday).

     

    Get politicians out of it. Make it simple. Then, if it needs adjustment, it's a transparent process. Want to move it from 12 to 13%? Then we have that debate. There is no opaque tinkering with various deductions or special treatment.

     

    Simplify. Lower the rates. Broaden the tax base. Get out of the way and watch the economy thrive. A 25 T economy will throw about 5 T into the govt. coffers. Let's aim for growth.


    If you're talking about personal taxes, you can have a simplified tax system but still have progressive rates.   Those who propose a flat tax or two rates, as you have, usually have in mind having poorer people pay much higher taxes.   That's inherently unfair as poorer people spend much more of their income (frequently 98% of their income) on the basic necessities of life:  shelter, food, clothing, medical and transportation to school or work.  

     

    In ZoetWorld, you would have a one- or two-page tax form, eliminating all schedules.   You take your gross income from all sources (including dividends, capital gains, interest, pensions, etc.).   You eliminate all deductions except medical, education and pre-tax 401Ks.   Social Security income would only be taxed when it exceeds what you put in.   You still have five rates.    (In fact, with proper electronic reporting from the income sources as well as medical and education expenses, you wouldn't even need to file.   The IRS could collect this information, subtract how much you paid whether in payroll taxes or quarterlies, and either refund the overage or send you a bill.)  

     

    Small business taxes should be simplified as well, but since it could never be as simple as personal taxes, personal taxes should be tackled first.  

     

    But it will never happen.   Everyone is too hung up on the deductions that they take, even if their new tax bill would be the same or lower than it is today (and at the very least you'd save either accountant or software fees).   So homeowners would fight to keep the mortgage interest deduction.   Families would keep to fight dependent deductions.   Investors would fight to keep the lower rates on capital gains.   The accountants lobby would fight to kill any simplification at all as they have a vested interest in a very complex tax system.   Etc.  

  • Reply 38 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    mstone wrote: »
    Right. That is why they should not consider a tax holiday now. It sets a bad precedent. All the corporations will just wait for the next tax holiday.

    If the US wants a steady stream of tax revenue they can just lower the regular tax rate sufficiently to encourage corporations to bring their foreign profits back to the US. Not a once in a while tax holiday.

    That's right. Make it permanent and make it 5%. Businesses will return to the US and all Americans will end up benefitting.
  • Reply 39 of 112
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by sog35 View Post

     
    Once for the Corp and second for the individuals who own the corp. 


    Individuals do not own a publicly traded corporation. They own shares which is the same as corporate debt. Just like when you go to the bank to get financing for your business, the bank does not own your business unless your business goes bankrupt. Then the bank can force the liquidation of your assets to recoup some of their investment. Same thing is true of a company that has an IPO. The shares are sold to finance the corporation, but the shareholders do not own the company unless the corporation goes bankrupt. Then they are entitled to their 'share' of the liquidated assists, which rarely amounts to much after all the principle creditors are paid, such as payments due to suppliers, loans and pensions, etc.

     

    If a corporation repatriates some foreign profits, they may decide to use the cash to increase the dividend paid to the shareholders thus causing the share price to rise, but other than that, the shareholders do not directly benefit from the repatriated cash. It could, however, be good for the US economy if the corporation decides to use the cash to expand their business in the US as that might create new jobs.

  • Reply 40 of 112
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by SpamSandwich View Post

     
    That's right. Make it permanent and make it 5%. Businesses will return to the US and all Americans will end up benefitting.


    Lowering corporate income taxes alone will not significantly change the offshore manufacturing trend. As long as there is such a huge difference in cost of labor, pensions, social security, real estate, environmental regulations and other taxes, there will still be sufficient incentive for corporations to keep the manufacturing abroad.

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