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Apple Lobbying for International Tax Amnesty to Bring Home Profits

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Apr 12, 2001
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Over the past few years, much has been made of Apple's reserves of cash and securities, which are now up to approximately $60 billion and growing rapidly. Some observers have suggested the company initiate a stock buyback or issue dividends to reward investors with some of the profits, while others have preferred that the cash remain in Apple's hands to enable the company to reinvest it into the business at some point in the future for greater returns. Apple CEO Steve Jobs noted during the company's October 2010 earnings conference call that Apple is holding onto the cash in order to take advantage of "one or more unique strategic opportunities" that it believes may present itself.

But all of the money may not be available for immediate use, as Fortune reports that Apple is one of a number of U.S. companies with significant profits generated in international markets that continue to sit abroad as the companies prefer to not pay the 35% federal tax charged on such foreign earnings.

To address this situation, Apple and these other major players are reportedly stepping up lobbying efforts to try to get the federal government to offer a one-year "tax holiday" that would allow them to bring the profits back to the United States while only being subjected to 5% tax, with the rationale being that the money could be put to work in the U.S. to stimulate the economy rather than simply sitting in foreign bank accounts.
A group of tech, pharmaceutical and energy giants is readying a major lobbying blitz for a tax holiday that would allow them to bring home the estimated $1 trillion they've got parked overseas at a steeply discounted rate, Fortune has learned.

The campaign is still in its planning stages, but sources close to the effort say Oracle, Cisco, Apple, Duke Energy, and Pfizer are among the major players looking to bankroll a coordinated, sustained pitch to sell policymakers on the idea. Their aim is to win a one-year tax amnesty on their foreign earnings, allowing them to repatriate that money at a tax rate of about 5%, instead of the 35% they face now.
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International markets have become increasingly important to Apple as iOS devices have proliferated around the world. In fact, Apple reported that during its most recent quarter, 62% of its revenue came from international sales. Consequently, billions of dollars in profit are being generated overseas each quarter, and Apple has been loathe to turn over 35% of those sums to the U.S. government.

On a possibly related note, Apple recently hired high-profile lobbying firm Fierce, Isakowitz and Blalock to assist with government dealings, an unusual move for the company that has typically refrained from significant lobbying in Washington, DC.

Article Link: Apple Lobbying for International Tax Amnesty to Bring Home Profits
 
Article Link
https://www.macrumors.com/2011/02/16/apple-lobbying-for-international-tax-amnesty-to-bring-home-profits/
What utter rubbish. The money shouldn't be in those foreign bank accounts in the first place.
 
I can imagine this being fairly contentious. On the one hand - it would be great for the US economy to have that kind of cash injection. On the other - why should the 'rich' pay less tax; while the poor pay more?
 
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30% of $x BILLION seems like a good reason to keep things overseas.
 
whooleytoo said:
I can imagine this being fairly contentious. On the one hand - it would be great for the US economy to have that kind of cash injection. On the other - why should the 'rich' pay less tax; while the poor pay more?
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Because in broad and general terms, the poor don't pay any taxes at all. Your mileage may vary, but this is largely true.
 
I am not a fan of anyone or anything dodging their tax responsibilities.. but the reality is that money is not doing our economy any good sitting in overseas banks... So I think such an exemption to get the money back here would be worthwhile.

I am not sure how much they could caveat it, like I would say the money would be taxed at 5% if it is reinvested in the US or something. Create some kind of incentive to use the money here.. but that would be hard to structure, verify and follow up on.
 
Oh the irony.

So Apple does not want to pay 30 ish % tax on their money.

Funny, the figure seems strangely familiar :D
 
Makes sense to bring it back to the states, but how it's going to stimulate the economy after only 5% tax and going into the pockets of the rich is beyond me.
 
Piggie said:
Oh the irony.

So Apple does not want to pay 30 ish % tax on their money.

Funny, the figure seems strangely familiar :D
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I was thinking the exact same thing... Apple is thinking "35%? For what? Why should I cut someone else in on my cash flow when I earned it all myself?"
 
This is just an example of how relatively high taxes can lower revenues. The government isn't getting a penny of Apple's overseas money, whereas if they had these taxes at a more reasonable level they could be getting money directly in taxes, and indirectly through it's usage in the American economy. Having the taxes so high doesn't do the government or its people any good.
 
Piggie said:
Oh the irony.

So Apple does not want to pay 30 ish % tax on their money.

Funny, the figure seems strangely familiar :D
Click to expand...

I thought the same thing. Funny how when its your money, 30% seems a little steep.
 
ItsGavinC said:
Because in broad and general terms, the poor don't pay any taxes at all. Your mileage may vary, but this is largely true.
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We're talking about companies, here, not individuals. We are all "poor" relative to these companies, anyway.

Can I have an amnesty from paying MY taxes over the last decade?

I'm not poor, but I never have more than a couple thousand dollars in the bank at any point in time (if that), and I've paid nearly 100,000 in taxes in the last decade.

I would gladly take my 75,000 dollars back, please.

I'm sure the republicans will back this, and then say that those opposed are "hurting small business." As if any small businesses can afford to leave huge piles of cash in foreign banks...
 
So, if I layoff American workers and out-source their jobs overseas, and earn a lot of money doing this, I will get a discount on my taxes?

Wow. Sure looks like a win for the American Economy. *sigh*
:(
 
I remember Warren Buffett lambasting the US tax code a couple of years ago when he said that he only pays 17% tax on his income when his secretary paid 30%. He challenged all other US billionaires to write Congress about this. None
did....
We all know the US tax law and loopholes favor the well off.. both for corporations and individuals. If I were a betting man, I would bet Apple will get their way on this.....
 
Apple Should Pony Up

If all corporations, Apple included, paid their fair share of taxes, our country wouldn't have a financial crisis. Corporations should have to pay 35% on profits regardless of where they are derived. Additionally, corporations should be penalized for outsourcing and given incentives for bringing manufacturing back to the United States. This is exactly what President Obama proposed, only to have the legs cut out from under him by the Republicans in the Senate.
 
bobpm said:
If all corporations, Apple included, paid their fair share of taxes, our country wouldn't have a financial crisis. Corporations should have to pay 35% on profits regardless of where they are derived. Additionally, corporations should be penalized for outsourcing and given incentives for bringing manufacturing back to the United States, which is exactly what President Obama proposed, only to have the legs cutout from under him by the Republicans in the Senate.
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You have greatly generalised a huge issue, but I'll ignore that. Corporations not paying their taxes did not cause this financial crisis. The fact of the matter is that this money is not doing a thing to help the United States, or Apple. It's sitting in a bank overseas. By having such high taxes, the government is getting less than they otherwise would if the taxes were lowered to an acceptable level.
 
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So, if I layoff American workers and out-source their jobs overseas, and earn a lot of money doing this, I will get a discount on my taxes?
===========================

This. These companies, to be frank, are full of it. They will reinvest a tiny fraction of those profits in the US. The majority of it will go into the pockets of a select few, already rich shareholders. Apple (and every other major multinational) will continue to outsource as much as they possibly can, increasing their international profits still more and benefiting the few wealthy people who own significant stakes in AAPL. Meanwhile, everyone else loses out on the 30% that would have gone to schools, infrastructure, health care and social security.

They will get exactly what they want, I'm sure.
 
Interesting situation because with the tax code as it is, that money will likely hide in overseas bank accounts, legally or illegally, for the foreseeable future. So, while I see the benefit of this on the short term, I would hope that it would only be the beginning of some package to reform both corporate and personal taxes.
 
hobo- while the example might be wrong but the facts are still true.

A large percentage of cash is being funnelled, tax-free (or tax cheap) through foreign entities explicitly set up to avoid taxes.

This has an incredibly large effect on taxes.
 
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