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

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Comments

  • Reply 61 of 112
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by PopinFRESH View Post

     
    Quote:
    Originally Posted by LarryA View Post





    Fantasy. There's just no evidence to support that, but there have been plenty of instances where Republicans in congress opposed the legislation that they themselves sponsored because Obama was for it

    Wow, your facts are amazing. Also your source, LarryA, is the most vetted and reputable source I've ever seen. /s


    I believe these are the talking points he is referring to:

     

    http://www.politicsdaily.com/2010/07/11/things-republicans-were-for-and-now-are-against/    

     

    http://www.eclectablog.com/2013/08/10-ideas-republicans-loved-until-barack-obama-became-president.html

  • Reply 62 of 112
    ifij775ifij775 Posts: 470member
    This could lead to a massive one-time dividend.
  • Reply 63 of 112
    larryalarrya Posts: 592member
    popinfresh wrote: »
    Wow, your facts are amazing. Also your source, LarryA, is the most vetted and reputable source I've ever seen. /s

    Really?
    For the deaf and blind, then:

    Www.allgov.com/news/unusual-news/six-republicans-vote-against-deficit-bill-they-sponsored?news=840267

    "senate Republicans Hit an All Time Low Blocking Bill They Unanimously Supported"
    Www.politicususa.com/2014/05/17/senate-republicans-hit-time-blocking-bill-unanimously-supported.html

    Now, where's the example of the reverse?
  • Reply 64 of 112
    danoxdanox Posts: 1,494member
    A TAX HOLIDAY WAS GIVEN IN 2004 TO AMERICAN CORPORATIONS, NOTHING CAME OF IT THEN AND NOTHING WILL THIS TIME AROUND EITHER JUST ONE MORE SHAM.
  • Reply 65 of 112

    "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."

     

    Your sentiment is widely shared by those who are paying the taxes.  The problem is taxation is the power of the government.  The best you can hope for from Congress is a recognition that if they clean up the mess, they can get paid all over for messing it up.  Congress is as self-centered an organization as exists in America.  Many of the individuals in Congress paid huge amounts of their own money to get elected, and or sold their soul to get the money to get elected.  We do not have any honest politicians.  The best we can hope for is enlightened self interest keeps them from killing the goose that lays all the golden eggs.

  • Reply 66 of 112
    frank777frank777 Posts: 5,839member
    Quote:

    Originally Posted by quanster View Post



    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.

     

    I'm pro flat tax and tax reform in general, but your first point seems off.

     

    I'm not an expert on the U.S. tax system, but in general individuals are subject to tax treaties among industrialized nations (so for example, Canadians can work outside the country and not get double taxed.) In contrast, Apple has already paid taxes on its foreign earnings.

     

    Why should it be taxed again on the same money just because it is transferring it from one bank to another?

  • Reply 67 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    Quote:

    Originally Posted by Danox View Post



    A TAX HOLIDAY WAS GIVEN IN 2004 TO AMERICAN CORPORATIONS, NOTHING CAME OF IT THEN AND NOTHING WILL THIS TIME AROUND EITHER JUST ONE MORE SHAM.

     

    And THAT is why the rate must be permanently reduced.

  • Reply 68 of 112
    jungmarkjungmark Posts: 6,924member
    larrya wrote: »
    Really?
    For the deaf and blind, then:

    Www.allgov.com/news/unusual-news/six-republicans-vote-against-deficit-bill-they-sponsored?news=840267

    "senate Republicans Hit an All Time Low Blocking Bill They Unanimously Supported"
    Www.politicususa.com/2014/05/17/senate-republicans-hit-time-blocking-bill-unanimously-supported.html

    Now, where's the example of the reverse?

    POLITICS!!

    Btw, didn't John Kerry famously vote for and against the same bill.
  • Reply 69 of 112
    richard getzrichard getz Posts: 1,142member
    Quote:

    Originally Posted by PopinFRESH View Post

     

    Others have also mentioned a flat tax, two tier tax, etc. While some of these do have merits they also have several challenges that would need to be addressed as well. People have also mentioned a VAT, and continued on with how complex they are. However I believe a pure flat VAT on either side of the equation, and eliminating any other tax would result in the easiest method of taxation. For example applying this on the income side would result in the following:

     

    When apple buys the flash memory for the latest iPhone, they pay Samsung $100 for the component and as Apple has not yet added any value they would not pay any tax in the US. They would still end up paying whatever tax they owe in South Korea for that part. However they then buy the sapphire cover from GT Advanced for $100. Apple has still not added any value to that component and as such would not pay any tax on it. In this case though, GT Advanced would pay the tax on the value that was added by their production of the component. The materials and capital used to make the component cost GT Advanced $25 so they added $75 of value by producing the component. Using a flat 10% for simplicity, GT Advanced would then pay $7.50 in VAT on that component. We will move this along by saying the iPhone is made up of only those two components. So Apple has now spent $200 on producing the iPhone. Now they sell that iPhone directly to you for $650. Thus Apple has now added $450 of value by producing the iPhone that you bought. Just as Apple did not pay a tax on the sapphire component, you would not pay a tax on buying the iPhone. Apple however would then pay $45.00 in VAT. Your income, in this example would be just like the sapphire component, and you would pay the tax on the value you produced by working. You would be in this sense a raw resource.

     

    The other side of this would be a VAT on expenses. Which is in the end the same thing, it is simply changing who is paying the tax. Using the previous example, when Apple bought the sapphire component from GT Advanced, Apple would pay the $7.50. When you bought the iPhone, You would pay the $45.00 in VAT, however when Apple pays you for your labor, Apple would pay the 10% on the expense rather than you paying it on your income (which is the same number). On the income side you are paying the tax on the value you create, on the expense side you are paying the tax on the value the entity you're buying something from created.

     

    -PopinFRESH 


     

    As long as there is no other Federal taxes, I like the VAT on Expenses! There is less paperwork/oversight/bureaucracy as you are paying on receipt rather than having to show/calculate increase in value. 

     

    This will increase the tax burden on those working the system (GE), force those not paying income taxes (those working under the table) to pay into the system, and decrease the cost of doing business for all (no tax accountants, filings, tax attorneys, etc.). So the cost of goods will go down (in a competitive market). Thus the poor, having to pay %5 tax on bread, should be paying that tax on bread that cost less. This will not be realized right away, but as companies decrease their cost of business, they will lower prices (or increase quality) to gain marketshare. 

     

    This will also incentivize people to save money, companies to grow their business, and to hire more labor. Let's not forget a huge benefit of decreasing the size of the Federal government and removing a large stick .  

  • Reply 70 of 112
    Gee, I'm just a layman, but I don't know why Apple would transfer the money to the US even if there were zero taxes.
  • Reply 71 of 112
    h2ph2p Posts: 317member
    jungmark wrote: »
    No way. Corps should not pay less than the middle class tax payer. 10-15% is more appropriate.
    Apple is borrowing at between 2.5% and perhaps 5% to pay for dividends. They would have zero incentive to bring $ to the US for 10-15%. As it is, corps repatriate $ only if they need it to keep the company running or expanding. Apple makes enough in the US + inexpensive borrowing to do this. No need to bring in cash from non-US sales.
  • Reply 72 of 112
    larryalarrya Posts: 592member
    jungmark wrote: »
    POLITICS!!

    Btw, didn't John Kerry famously vote for and against the same bill.

    Eh, probably! The show Veep reminds me of his campaign for President. Seemingly no foundation to belief system due to being a slave to public opinion.
  • Reply 73 of 112
    tallest skiltallest skil Posts: 43,388member
    Originally Posted by Danox View Post

    A TAX HOLIDAY WAS GIVEN IN 2004 TO AMERICAN CORPORATIONS, NOTHING CAME OF IT THEN AND NOTHING WILL THIS TIME AROUND EITHER JUST ONE MORE SHAM.

     

    Define "nothing".

  • Reply 74 of 112
    bugsnwbugsnw Posts: 717member

    One can hope that since Rand and Reid are behind this, Obama won't turn this proposal into a class warfare opportunity. I wish he would have used the bully pulpit to champion companies and the economy and people working hard to become well off. Once the liberal press gets ahold of this, we are going to hear nonstop how poor people pay all the taxes and the rich don't pay their fair share.

  • Reply 75 of 112
    rd55127rd55127 Posts: 1member
    I believe Ireland has a Corporate Tax Rate of 12.5% (through 2025) which can be applied to offset any taxes due the US IRS in the case of repatriation. In the example of the US determining a 15% tax rate for corporations the already paid 12.5% to Ireland would be credited and the net tax to the US IRS would be 2.5% - so the revenue estimates cited may need to be tempered. The US has one of the highest Corporate Tax Rates in the world (approaching 40% with Federal and State) hence the tax advantaged strategies employed by US corporations. This level of taxation influences the US multi-nationals to export jobs outside of the US to increase after tax profits and share price as a multiple of earnings. Most countries have tax rates between 20-30% - lower the US rates and some of these companies will move operations back to the US since the offshore advantage will be diminished.
  • Reply 76 of 112
    jungmark wrote: »
    No way. Corps should not pay less than the middle class tax payer. 10-15% is more appropriate.

    See my post above. Corps don't pay taxes - they collect them from you.

    It's tempting to think of corporations as people, and for some people it's tempting to think of them as rich people who owe others something. When you understand that they're just vehicles for transacting business and that you paid a hidden 35% tax on that iPad you start not wanting to tax yourself as a consumer in such a non-transparent way.
  • Reply 77 of 112
    gatorguygatorguy Posts: 23,508member
    danox wrote: »
    A TAX HOLIDAY WAS GIVEN IN 2004 TO AMERICAN CORPORATIONS, NOTHING CAME OF IT THEN AND NOTHING WILL THIS TIME AROUND EITHER JUST ONE MORE SHAM.
    Define "nothing".
    http://www.nytimes.com/2009/06/05/business/05norris.html?_r=0
    "...the most detailed analysis of what actually happened — using confidential government data as well as corporate reports — has estimated what happened to the $299 billion companies brought back from foreign subsidiaries. About 92 percent of it went to shareholders, mostly in the form of increased share buybacks and the rest through increased dividends.

    There is no evidence that companies that took advantage of the tax break — which enabled them to bring home, or repatriate, overseas profits while paying a tax rate far below the normal rate — used the money as Congress expected.

    “Repatriations did not lead to an increase in domestic investment, employment or R.& D., even for the firms that lobbied for the tax holiday stating these intentions..."
  • Reply 78 of 112
    tallest skiltallest skil Posts: 43,388member
    Originally Posted by Gatorguy View Post

    There is no evidence that companies that took advantage of the tax break — which enabled them to bring home, or repatriate, overseas profits while paying a tax rate far below the normal rate — used the money as Congress expected.

     

    Thanks for that. It proves two things.

     

    1. “Not being used as expected” neither means nor implies “not used”.

    2. Congress doesn’t have the first clue about how business operates.

  • Reply 79 of 112
    ksecksec Posts: 1,568member
    Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.

    I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
    And if it was just a way to make more tax, shouldn't 5% be fair and enough?
  • Reply 80 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    ksec wrote: »
    Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.

    I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
    And if it was just a way to make more tax, shouldn't 5% be fair and enough?

    Agree on all points.
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