As Apple nears $200B in cash, U.S. Senators once again propose a repatriation tax break

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  • Reply 81 of 205
    misamisa Posts: 827member
    frankie wrote: »

    Good riddance, let them leave for good.  What we need to do is make it illegal to park your money overseas to begin with.

    The entire reason it happens is because people, not corporations, have been doing it forever. Where do you think the 1% parks their money? They shuffle it through shell corporations and "pay themselves" when they need the money. That way the 1% aren't "multibillionaires" on paper.

    Corporations started doing it, and realized they never have to pay their US HQ. Then other companies in the last few years realized they could buy a foreign company and get out of US taxes entirely.
  • Reply 82 of 205
    davidwdavidw Posts: 2,036member
    Quote:
    Originally Posted by Marvin View Post





    They didn't pay those rates abroad because they funnelled profits through Ireland, which is why they are being called out for tax avoidance, among others like Google, Starbucks and Amazon. They use transfer pricing to charge their own subsidiaries higher costs to lower their profits in countries with ~25% rates and they get taxed in Ireland but the setup in Ireland is such that it has no tax jurisdiction due to a legal loophole about tax jurisdiction depending on where the operation is managed from. Their effective rate abroad is in the low single digits, some reports said 2%, which isn't surprising when you don't have a tax jurisdiction.



    Customers pay sales tax on Apple's products, Apple employees have income tax taken out of their salary before they get it and what remains is corporate profits, which they are avoiding tax on abroad. They pay it in the US but don't want to pay it anywhere else and that blocks their repatriation of the profit.



    This is a political move to try and claim pre-election victories in contributing to a sustainable economy:



    https://cei.org/blog/invest-transportation-act-2015-violates-fiscally-conservative-transportation-principles



    'Hey see that last guy in office that had trouble paying for infrastructure; look what I did, I accepted a bribe (i.e do what I say and get something, otherwise you get nothing) from a wealthy corporation to bring in ill-gotten tax proceeds from other countries and now you have a new road'. That's government corruption, giving special treatment to the super-rich for their own political interests. Rand Paul who has proposed this bill was on the committee who asked Apple to account for tax avoidance and defended Apple for it. You could see he was scheming this sort of thing up and is going to time it so that he can claim it as a success just at the right time. It will contribute to private sector jobs growth which they will claim and it will only last in the short-term.

     

    That only pertains to the portion of overseas profits Apple made in certain EU countries. Because that's the way the EU sets it up. (and the EU is looking to changing that.) But are you telling me Apple was able to do this with profits made in China, Japan, Korea, India, Africa, Canada, South America and Australia? Countries whose corporate tax rate are most likely in the 20's. And I'm betting China will soon, account for half of Apple overseas profits. (I'm pretty sure Asia already accounts for over half of Apple overseas profit.) As a shareholder, I'd like to see them funnel those profits into Ireland and pay next to nothing to China.

  • Reply 83 of 205
    MarvinMarvin Posts: 15,310moderator
    LOL at the use of the word "scheming". WHAT ABOUT BARBARA BOXER? I posed the same question to Mel.

    What about the Democrats and the president who "schemed" and even changed the rules so they could ram through the ACA? Wow, Marvin. Come on.

    Look at the motive, Barbara Boxer is retiring:

    http://www.huffingtonpost.com/2015/01/08/barbara-boxer-retires_n_6436800.html

    She's not going to be able to claim any victory for her own political success. ACA has got nothing to do with political gain, it's to benefit people. If they hadn't bothered with it, they'd have been better off overall politically.

    This repatriation move would also help promote the false idea of trickle down economics i.e look how much better things can be if we give rich people a break. Whatever it is trickling down, it's yellow, warm and it looks nothing like jobs.
    davidw wrote:
    are you telling me Apple was able to do this with profits made in China, Japan, Korea, India, Africa, Canada, South America and Australia?

    Yes, through transfer pricing. It doesn't matter which country it is, you can funnel profits from any country by artificially increasing costs.
  • Reply 84 of 205
    davidwdavidw Posts: 2,036member
    Quote:
    Originally Posted by Misa View Post





    The entire reason it happens is because people, not corporations, have been doing it forever. Where do you think the 1% parks their money? They shuffle it through shell corporations and "pay themselves" when they need the money. That way the 1% aren't "multibillionaires" on paper.



    Corporations started doing it, and realized they never have to pay their US HQ. Then other companies in the last few years realized they could buy a foreign company and get out of US taxes entirely.

     

    False. No company can avoid paying US taxes on profits or income made in the US. That's tax evasion in the IRS books and they will get you for it. Even if it's a foreign company with a foreign HQ. Even if you're a multi billionaire. Corporations are only allowed to keep overseas profits overseas and not have to pay US taxes on it. But US  individuals are still liable for US tax on any foreign income. 

     

    And it doesn't matter if you re a billionaire on paper. You are taxed based on income, not wealth. If I have a million dollars of AAPL and unemployed, I will paid no taxes unless I sell some AAPL at a profit. Then I'm only taxed based on the profit I made selling AAPL, not based on the fact that I may still be a millionaire on paper. If taxes works the way you think it works, then all those people with lots of money in their IRA accounts would be taxed based on the money they have in their accounts and not based on their annual salaries (and other wages and incomes).  

  • Reply 85 of 205
    Marvin wrote: »
    Look at the motive, Barbara Boxer is retiring:

    http://www.huffingtonpost.com/2015/01/08/barbara-boxer-retires_n_6436800.html

    She's not going to be able to claim any victory for her own political success. ACA has got nothing to do with political gain, it's to benefit people. If they hadn't bothered with it, they'd have been better off overall politically.

    This repatriation move would also help promote the false idea of trickle down economics i.e look how much better things can be if we give rich people a break. Whatever it is trickling down, it's yellow, warm and it looks nothing like jobs.
    Yes, through transfer pricing. It doesn't matter which country it is, you can funnel profits from any country by artificially increasing costs.

    Strange, I'm "people" and I receive absolutely no benefit from the ACA. In fact, I'm materially harmed by it.
  • Reply 86 of 205
    leesmith wrote: »

    I'm not 
    Centrally planned economies don't work, they inevitably result in malinvestment and failure.


    I'm not talking about that at all. If Apple wants to repatriate, Apple would have to use the earnings for the creation of new manufacturing jobs - not the government.

    Why new manufacturing jobs ... why not new Engineering jobs ... why not new Programming jobs ... why not new R&D jobs ... or G&A jobs ...

    What about spending the money on P&E * ... Education grants ...

    Turns out, likely, Apple can do a better job of spending the money with as little government interference as possible ... for the benefit of all -- instead of politicians awarding funds to their pet projects for their their (and a few) benefit ...

    * Apple is spending $Millions building new headquarters that will eventually hold ~ 1,300 employees ... The construction will result in lots of construction jobs ... and lots of fanout jobs -- restaurants/food trucks, laundromats ... whatever! The end result will form a new tax base for the City, County, State and Federal governments. Previously, this land sat abandoned -- providing no direct jobs, no fanout support jobs and minimal tax revenue -- it was an eyesore and no good to anyone (silicon Valley's Detroit).



    Put another way, What is the government's fair share -- and who is best qualified to deliver it?


    "Cry 'Havoc!', and let slip the dogs of war".
     
  • Reply 87 of 205

    Is this really about taxes?  Or is it really about manufacturing and keeping jobs in the US?

     

    As someone already said.  All those other countries where Apple sells this stuff, get tax off the sales, which makes sense.  Isn't the problem that those sales don't generate manufacturing jobs and exports for the US?

     

    Oh, and by the way Apple does have a headquarters in Canada.  It's in Markham, Ontario.

  • Reply 88 of 205
    xixoxixo Posts: 449member
    I am totally opposed to this.

    So, forget the rule of law, forget democracy, if you make enough money and have your pet legislator pass a law, you can completely forego your fair share of taxes.

    Does anyone here have any doubt what would happen if you were to visit your pet legislator and say "I made a lot of money working overseas (for example) in Afghanistan as a military contractor last year, but I only want to pay 6.5% tax on it when I bring it back to the USA"?

    This country's infrastructure is falling apart because the right and left are squabbling while rome burns and corporations laugh all the way to the bank.

    I'm not laughing.
  • Reply 89 of 205
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by BeltsBear View Post



    Good idea but this part sucks:



    "None of the funds would be eligible for use in executive compensation, shareholder dividends, or stock buybacks for three years after the repatriation scheme ends." .....

    I'd be all for that, on one condition, that being,  if the government wants to control Apple spending....Apple should be allowed to control government spending. That's fair. It's not like the government is exercising any control or anything. /s  ;) 

  • Reply 90 of 205
    xixo wrote: »
    I am totally opposed to this.

    So, forget the rule of law, forget democracy, if you make enough money and have your pet legislator pass a law, you can completely forego your fair share of taxes.

    Does anyone here have any doubt what would happen if you were to visit your pet legislator and say "I made a lot of money working overseas (for example) in Afghanistan as a military contractor last year, but I only want to pay 6.5% tax on it when I bring it back to the USA"?

    This country's infrastructure is falling apart because the right and left are squabbling while rome burns and corporations laugh all the way to the bank.

    I'm not laughing.

    I'm not laughing, but I do disagree with everything you've stated as fact.
  • Reply 91 of 205
    xixoxixo Posts: 449member
    Quote:

    Originally Posted by DavidW View Post

     

     

    False. No company can avoid paying US taxes on profits or income made in the US. 


     

    General Electric reaped billions in profit using tax code manipulation to move US jobs overseas & pay no income tax.

     

    It's a rigged game and a sucker's bet.

     

    Today 1% of the world owns 50% of the wealth. What's enough? 60%? 70%?

  • Reply 92 of 205
    Quote:

    Originally Posted by Dick Applebaum View Post





    Why new manufacturing jobs ... why not new Engineering jobs ... why not new Programming jobs ... why not new R&D jobs ... or G&A jobs ...



    What about spending the money on P&E * ... Education grants ...



    Turns out, likely, Apple can do a better job of spending the money with as little government interference as possible ... for the benefit of all -- instead of politicians awarding funds to their pet projects for their their (and a few) benefit ...



    * Apple is spending $Millions building new headquarters that will eventually hold ~ 1,300 employees ... The construction will result in lots of construction jobs ... and lots of fanout jobs -- restaurants/food trucks, laundromats ... whatever! The end result will form a new tax base for the City, County, State and Federal governments. Previously, this land sat abandoned -- providing no direct jobs, no fanout support jobs and minimal tax revenue -- it was an eyesore and no good to anyone (silicon Valley's Detroit).







    Put another way, What is the government's fair share -- and who is best qualified to deliver it?





    "Cry 'Havoc!', and let slip the dogs of war".

     



    I have no problem with new any kind of jobs that are filled by American citizens.

  • Reply 93 of 205
    xixoxixo Posts: 449member

    so, your senator would pass a law letting you repatriate your personal income at 6.5%?

  • Reply 94 of 205
    xixo wrote: »
    so, your senator would pass a law letting you repatriate your personal income at 6.5%?

    Someone correct me if I'm wrong, but aren't Americans working overseas double-taxed as of now?
  • Reply 95 of 205
    xixoxixo Posts: 449member
    Quote:

    Originally Posted by leesmith View Post

     



    I have no problem with new any kind of jobs that are filled by American citizens.


     

    I have no problem with a tax code that favors employment of American citizens in America, versus moving jobs overseas, taking a business expense deduction for doing so, and importing a million STEM workers to depress USA wages.

     

    and then they have the nerve to ask for a tax break and portray it as some kind of benefit? the mind boggles...

  • Reply 96 of 205
    Quote:
    Originally Posted by xixo View Post



    I am totally opposed to this.



    So, forget the rule of law, forget democracy, if you make enough money and have your pet legislator pass a law, you can completely forego your fair share of taxes.



    Does anyone here have any doubt what would happen if you were to visit your pet legislator and say "I made a lot of money working overseas (for example) in Afghanistan as a military contractor last year, but I only want to pay 6.5% tax on it when I bring it back to the USA"?



    This country's infrastructure is falling apart because the right and left are squabbling while rome burns and corporations laugh all the way to the bank.



    I'm not laughing.



    Did you live in Afghanistan and pay tax to Afghanistan during this time?  This is what Apple is doing in your example.  Would you then want to pay tax to the US on top of paying tax to Afghanistan?

  • Reply 97 of 205
    xixoxixo Posts: 449member
    Quote:
    Originally Posted by SpamSandwich View Post





    Someone correct me if I'm wrong, but aren't Americans working overseas double-taxed as of now?

     

    No. Speaking as someone who has lived and worked overseas, you file your local taxes in the country where you're working, then you file a US tax return but deduct the overseas taxes you already paid.

     

    http://www.irs.gov/Individuals/International-Taxpayers/Taxpayers-Living-Abroad

     

    Double taxed - that's amusing. Apple put their European 'headquarters' in Ireland and gamed the system:

    http://www.nytimes.com/2014/10/01/business/international/european-commission-report-warns-ireland-over-tax-treatment-of-apple.html

     

    Now this practice is being disallowed, so Apple comes running home looking for a break...

  • Reply 98 of 205
    xixo wrote: »
    I have no problem with a tax code that favors employment of American citizens in America, versus moving jobs overseas, taking a business expense deduction for doing so, and importing a million STEM workers to depress USA wages.

    and then they have the nerve to ask for a tax break and portray it as some kind of benefit? the mind boggles...

    How do you feel about the unilateral "forgiveness" of illegal immigrants for political gain? In California, not only are federal immigration laws unenforced, people are issued driver licenses. The mind boggles. I know of no other country that would do something so insane. If you are narrowly focused on "jobs", this should be an issue.
  • Reply 99 of 205
    leonardleonard Posts: 528member
    Quote:
    Originally Posted by SpamSandwich View Post





    Someone correct me if I'm wrong, but aren't Americans working overseas double-taxed as of now?

     

    No.  It depends on the situation.  If you are working for a company that is overseas, like IBM and you live overseas, you are paying that country's tax.  The US should be exempting you from paying tax on what you've paid tax on in that other country.  But then I'm going by what I know of Canada tax and applying it.  In Canada it would depend on where you live and whether you are a resident or non-resident.  For example, if your a US NHL player and you work in Canada (play a game here) but live in the US (your official residence is in the US), Canada would exempt you.

     

    But in xixo's example I'm not sure the "company" he is working for is overseas.  If he's working for the US military, I would assume he would pay US tax.  If he's working for the Afghanistan military, he should probably be paying Afghanistan tax.

     

    But then individual tax is different than corporate tax...

  • Reply 100 of 205
    xixoxixo Posts: 449member

    Senator Carl Levin, who was chairman of the investigating Senate subcommittee, said the commission’s report validated his panel’s finding that Apple had negotiated a tax rate of less than 1 percent.

    “Apple developed its crown jewels — lucrative intellectual property — in the United States, used a tax loophole to shift the profits generated by that valuable property offshore to avoid paying U.S. taxes, then boosted its profits through a sweetheart deal with the Irish government,” Senator Levin said in a statement.

    Wall Street analysts assured investors there was no need for alarm about Apple’s obligations no matter what the commission ultimately rules. In a research note on Monday, Ben Reitzes, an analyst at Barclays Investment Bank, said any potential fine would have only a minor impact on Apple’s financial health. Even $6 billion — the amount Apple would have paid over three years based on Ireland’s full statutory tax rate — amounts to a cost of only $1 a share, he wrote.


    In other words, it's just "the cost of doing business"

     

    Overseas, I worked for my own company incorporated overseas.

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