Tim Cook "Not Religious" About Holding Cash; 66% of Apple's $81B in Cash is Held Overseas

[cvaldes]

Another option is to assess a more reasonable overseas tax rate, like 15% instead of 35%.

That would encourage some of the money to be brought back to the U.S., even if it's a portion, like a third of the $49B in international cash holdings.

One-third of $49B is $16.33B, which would generate $2.45B in taxes at a 15% rate.

Right now, basically none of overseas $49B is being brought back into the country. Zero dollars at a 35% rate is still zero dollars.

 

[macse30]

$4B a year if invested at 5%. Daaaaaammmmmn!

 

[Chupa Chupa]

So you would rather they not pay taxes on earnings?

Apple pays taxes on the earnings made overseas in the country those earnings originated, ex., sales in Germany = taxes paid to Germany. But for Apple to bring that money made in (by example) Germany back to the U.S. they would have to pay U.S. taxes too, i.e., double taxation. What Apple and other companies have been lobbying for is to at least have a reduced taxe rate to bring that money back to the U.S.

 

[hobo.hopkins]

Crap like this is why america is broke, among other reasons. Apple should really set a standard of investing here in USA. Kinda sad IMO.

I think most would be happy with $360 apple stock prices if apple brought cash back to USA.

If AAPL is down some $27 after-hours because of their earnings, imagine what their stock would be if they operated with the principle of "investing" in the USA. They would make significantly less money, and their stock would tank.

It's a great theory, but it's just that. What you're suggesting isn't feasible under current corporate tax policies in America.

 

[kevinfulton.ca]

I really, really......REEEAAAALLY wish they'd buy Adobe! I could really go for buying parts of their Creative Suite on the AppStore for $50-$100! I'm sure a cleaner UI a less bugs would go along with that as well

 

[jeff33702]

How about spending some of that money on creating factories here in the US?

 

[epicshredder]

This.

They already paid taxes once on the money they earned to the country in which it was earned. It's not unpatriotic to not want your earnings double dipped.

They are not paying taxes on any international earnings, yes maybe sales taxes paid by consumer at store, but that's about it. Deferral means NEVER

 

[jeff33702]

Apple pays taxes on the earnings made overseas in the country those earnings originated, ex., sales in Germany = taxes paid to Germany. But for Apple to bring that money made in (by example) Germany back to the U.S. they would have to pay U.S. taxes too, i.e., double taxation. What Apple and other companies have been lobbying for is to at least have a reduced taxe rate to bring that money back to the U.S.

SO they benefit from cheaper labor overseas, and want to bring the profits home for free? I can see why that's a problem. I wonder if manufacturing products in the US and paying higher initial taxes and labor would actually be less than the taxation they are facing now?

 

[epicshredder]

If AAPL is down some $27 after-hours because of their earnings, imagine what their stock would be if they operated with the principle of "investing" in the USA. They would make significantly less money, and their stock would tank.

It's a great theory, but it's just that. What you're suggesting isn't feasible under current corporate tax policies in America.

Fact is they have a superior product, when managed properly apple stock will always rise conservatively like most mega corporations. Keeping money in American banks will not hurt in long run at all.

 

[Chundles]

They could spend some of that on building an apple store closer to me.

Not even $81B is going to get through the time lock.

 

[Chupa Chupa]

How about spending some of that money on creating factories here in the US?

The environment to manufacture in the U.S. is worse now than when Apple shuttered its U.S. factory a decade ago. More regulation, unions requiring ever more benefits, higher property and equipment taxes, etc. Companies did not shutter factories in the U.S. because they wanted to but because they could not survive here if they left them open.

 

[KPOM]

Crap like this is why america is broke, among other reasons. Apple should really set a standard of investing here in USA. Kinda sad IMO.

I think most would be happy with $360 apple stock prices if apple brought cash back to USA.

Most countries don't tax worldwide income of individuals or corporations. I think it is only the US and Russia. Companies can get a tax credit for taxes they pay to the other country, but since the US corporate tax rate of 35% is higher than anywhere else (now that Japan has lowered its rate), they would still wind up paying additional tax by repatriating income.

It's a tax disincentive for bringing money back home, and an incentive to grow foreign operations. That $12 billion would plug the deficit for 3 days, but is a lot of money to Apple.

 

[macse30]

I don't think corporations should pay tax on money earned overseas. They should just pay for our Navy, Army, Marines, Air Force, and State Department overseas which makes international business less risky.

/Oh yeah, that's a big part of federal taxes...

 

[Bluestrike2]

Technically they should but since they are so "we love USA" they prefer to dodge it. Foreign banks, investments firms, lawyers make money on it yet USA only spends more so apple (NOT ONLY apple to make it clear so no idiot starts another stupid argument) can give others a chance of benefiting from it... Awesome how it all works

Foreign income isn't earned in the United States. It seems self-evident, and I feel like an idiot for even having to mention it, but people continue to miss the boat.

They're not dodging taxes; on the contrary, the taxes only come into being IF the money is repatriated. It's an idiotic policy, but that's what we get for opting to be one of the only industrialized nations that maintains such perversions in its tax codes.

Don't criticize Apple and other corporations for doing what they are, per the Supreme Court, permitted to do. If you want to complain to anyone, complain to Washington about a tax code that punishes repatriation of foreign funds, double taxation, and a myriad of other problems so numerous as to not even be worth diving into at the moment.

Rather than acknowledging that they come out ahead in the long-term if foreign profits are re-invested in the US without being nailed when repatriated, the IRS continues to prefer to get nothing as its short-term goal. The policy is idiotic and shortsighted, but it is what it is until people wise up.

 

[epicshredder]

They probably aren't getting taxed much at all in international countries just like we give tax breaks to say BMW for building cars in NC. This isnt double taxation, its actual taxation.
When they open plant in Indonesia, they receive tax exemption because of the jobs and income tax brought by new business.

 

[KPOM]

They are not paying taxes on any international earnings, yes maybe sales taxes paid by consumer at store, but that's about it. Deferral means NEVER

They pay corporate income taxes in the country where the money is earned. The US wants them to pay the difference between the local rate and the US rate of 35%. Most other countries don't do that. In other words, a UK company who has a subsidiary in China pays tax in China, but does not pay UK tax when bring that money back to the UK. That puts US companies at a disadvantage.

 

[twoodcc]

well you can't blame apple for keeping the money overseas. that's a lot of money, and i hope they put it to good use

 

[blumpy]

The money wasn't made in the US

They shouldn't have to pay US taxes for money they made else somewhere else and have already paid taxes on in the country of the sale.

Let them bring the money home, tax free, and let them spend it here!

 

[wovel]

Yup. Apple would have to pay about $12B in taxes if they brought that money into the U.S.

That is why they are one of the proponents of the tax-free revenue repatriation plan. Cisco is another one that would like to bring some money home. I am not sure this idea will pass again. There seem to be some doubt if there was really a positive economic impact last time.

 

[topomango]

give me a break!

I bought a camera in Hong Kong and had to pay import taxes at the US custom when I returned home. Why Apple should have a free run? Obama should tax them up to 50% for cash stored outside US, that's how you will convince them to move the money here. Apple ($$$) do not care about patriotism, they have slaves in china to produce the toys for you to enjoy. A lot of people died there regularly for it. It all about profits. Open your eyes, they are just like Exxon or Chase.

 

[lilo777]

Funny how the U.S. can tax revenue that never actually existed in the U.S. Gotta love "repatriation!"

Companies can easily solve this problem. Apple can move to Botswana, nobody is stopping them.

 

[doctor-don]

Crap like this is why america is broke, among other reasons. Apple should really set a standard of investing here in USA. Kinda sad IMO.

I think most would be happy with $360 apple stock prices if apple brought cash back to USA.

Apple and other companies who continue to get blasted by islanders just don't believe that these companies operate in a world market?

 

[Slurpy2k8]

I bought a camera in Hong Kong and had to pay import taxes at the US custom when I returned home. Why Apple should have a free run? Obama should tax them up to 50% for cash stored outside US, that's how you will convince them to move the money here. Apple ($$$) do not care about patriotism, they have slaves in china to produce the toys for you to enjoy. A lot of people died there regularly for it. It all about profits. Open your eyes, they are just like Exxon or Chase.

Wow, you've opened my eyes. I've never ever seen anyone post what you just did. You mean Apple cares about profits? You've just turned my world upside down. Now get off your ****ing high horse. What the hell is 'patriotism' to you? Just throwing your money away? Slaves? So I guess the majority of the worlds large companies employ 'slaves;. Try for some more originality next time, troll.

 

[chrmjenkins]

Did I say that? I just said that it's a shame that the tax system doesn't incentivise bringing back money from overseas. Incentives could be a temporary lower rate to provide instant benefits, for example. I didn't say they shouldn't pay any taxes; I believe that's creating a false dilemma.

The problem I have with your statement as it is worded is that you imply there is a way for it to be incentivized. If the current system allows it to be not taxed at all if it is kept overseas. What greater incentive could there be than 0 taxes on the money you have? The argument could be made that money brought here domestically could help create jobs/capital investment in America, but I doubt lack of capital would drive Apple to keep from doing anything domestically that it would do if it only had all of that foreign money brought here.

 

[acslater017]

It's too bad that the American tax system incentivises not bringing the money back into the United States.

1) Does anybody know what companies they're talking about when they say, "acquisitions made over the past few months"? I know Siri was last year...

2) I've heard at least one proposal that sounds fair. Allow corporations to bring the money back to the US tax-free, so long as the money is spent on hiring American workers, buying American goods, etc. The government needs revenue (doesn't it always), but more than anything right now the US needs jobs and sales!

3) Does anybody have thoughts where Apple might invest this money in the future? I'm not a businessman, but it seems like it might make sense to buy/create your own component suppliers, much as they did for P.A. Semi. I mean their mortal enemy of the day Samsung makes their flash, some stinky factor makes their unibody cases...Wouldn't it steady things to invest in a plant or two?