Apple Lobbying for International Tax Amnesty to Bring Home Profits

[jclardy]

Wow, 62%, about time to care a bit more about the rest of the world then only focusing themselves on North America, as in plenty of services which are only available to the USA

62% is a lot, but considering the USA as a single country brings in 38% of their revenue that is why they focus their business here.

Plus the fact that they have to pay 35% federal taxes on money they make in other territories.

 

[larrylaffer]

However, if you're pissed that you pay too much for french wine, japanese cameras or swiss cheese, then you apparently are siding with Apple. ;-)

Import taxes in the US are negligible at best. Ever been to China, or Korea, where a low-end MacBook Air is over $1200? In Australia, my 25,000USD Volvo goes for over 50k. THAT'S an import tax.

We've got it good the US. Domestic companies actually have to compete since we have the option of buying a foreign counterpart as an affordable price.

 

[callmemike20]

I don't think you all fully understand what is going on here...

There are 2 systems that countries use to tax multinational corporations:

1) Global System: In this system, a corporation is taxed on the income they make worldwide when the money enters the home country. In Apple's case, they are selling products in England, but they are leaving the money in England so they don't have to pay taxes in America. They are still paying the tax in England. In the end, its a tax on income that has already been taxed. The U.S. is currently the only major economy that uses this system.

2) Territorial System: In the territorial system, corporations are only taxed on income made within the home country. Japan and the U.K. have recently moved to this system because companies are more likely to send money back home that was made overseas. Timmy Geithner even said that America should adopt this system (LINK)

America is at a disadvantage here. Why would a multinational want to operate in America when they have to pay taxes made in other countries that is already taxed! It would be more beneficial to start a company in Japan and bring all the money you make overseas back home to reinvest in R&D and stuff, thus creating more jobs. Apple and other American multinationals have no incentive to bring their money back home. The money made in China should be reinvested in China because of the tax advantage.

It's not that multinationals aren't paying taxes overseas. They are simply being taxed on income that was already taxed. This topic is completely different from Google's 2% tax rate because they used tricks and moved money around through Ireland and such. A 100% honest company would do what Apple and others are doing.

Here is the report issued last year by the U.S. Economic Advisory Board. It lists all of the advantages and disadvantages of every option they created. Yet, congress had made no move on any of these proposals...

Back in the early 2000s (I think 2002), the tax rate for multinationals was lowered for 1 year to I believe 5%. I'm trying to find the details, and I will update this when I get out of class. During that time, the US government brought in more tax money than they did when the tax rate was much higher. Companies thought this would only happen once and they took advantage of it. This is what Steve Jobs and others are lobbying for...

 

[ericinboston]

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.

agreed. So even if Apple brought back 20billion which would equal a 1billion tax revenue for USA, who's to say the remaining 19billion just sits in some banks here...or pays for some outsourcing overseas...or Apple buys some non-USA company.

Of course nobody likes to pay taxes...but that's life...always were taxes, always will be taxes.

Unfortunately it's all a game...big business in America essentially controlling our government and strongholding them into these "deals"...makes the entire country suffer in 1 way or another.

 

[hotrock3]

No? I guess the US must be different then, because they certainly do here.

In the U.S. you officially pay taxes even if you are poor but when you go back through and apply for your tax return you end up getting most of it back. The only monies that don't come back are those that were paid into an entitlement program, which is a relatively small percentage when compared to a middle class tax percentage. Then subtract from that everything they get from the government for free and they end up paying very little.

 

[rdrr]

Don't you mean why should the rich pay more taxes than the poor?
Right now the poor in the US pay a lower% of their money earned to the GOVT.

All apple and these other companies are doing is trying to get the $ that they made on the foreign countries back into the US without being gouged for doing so. Could you imagine the outcry that would happen if the US Govt Taxed someone who made less than 20K at 35% They would torch the whitehouse, yet it's perfectly fine for them to tax the "rich" at 35%?

Let me ask you who can afford it more? Someone who pays 10% on $35000, leaving them with $32500 to live off of. Or someone who pays 20% on $350000, leaving them with $280000 to live of of?

It boggles the mind how a person/corporation with wealth can claim that its not fair. Oh and then want to cut services to help the person with little or no means. Its just plain greed.

 

[AidenShaw]

tax codes differ, but....

Corporations should have to pay 35% on profits regardless of where they are derived.

Agree.

As long as the tax is paid in the country in which it is earned then no more tax should be taken from it.

Disagree.

A long-standing provision in tax codes is that you get credit for "foreign" tax payments, but they don't remove your local tax obligation.

For example, if you pay a 20% in the foreign country and the US tax is 35%, then you'd be obligated to to pay the 15% difference to help the US.

I worked for many years in Europe, and each year I'd have to file both a local federal income tax and a US income tax return. If the local taxes were less than the US taxes, I'd have to pay the difference to the US. If the local taxes were higher than US taxes, too bad. (It was actually quite a bit more complicated, since I was working abroad for a US corporation. I'd hop the Atlantic regularly for meetings and conferences - and the days I spent in the US were counted as US income, not foreign income.)

I've had to do a similar calculation when I've had years where I've worked in states other than the one that was my official residence. You have to file in both states, and if your state of residence has higher taxes you need to pay in both.

 

[hotrock3]

Lol. I'm afraid you've swallowed a different kind of kool-aid. If you really think "trickle-down economics" works like that in a globalized economy, you're delusional.

Never said it would work, I was just explaining the idea behind bringing the money into the US at a low tax rate.

 

[patsfan83]

So we give them a tax holiday this one time. What prevents them from hoarding all of their profits for the next 10 years (or however long since the last tax holiday) until they complain about it again?

 

[scoobydoo99]

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.

THANK YOU for your voice of sanity! Isn't it interesting that this topic could generate _debate_ amongst the very people who would benefit from more corporate taxes contributing to US infrastructure? And I would wager that none of the advocates of the "tax holiday" in this forum will ever see the inside of the gate-guarded mansions in the Hamptons and Beverly Hills from which these requests are made.

 

[rdrr]

First of all, tax evading corporations is not what caused the financial crisis. It was initiated by two large banks hiding the fact that many of the people that owed them money were defaulting on their loans. People who should have never been qualified for the loan but couldn't be turned down because they were a first-time-home-buyer who happened to be buying a house which came with a payment that forced them to live paycheck to paycheck. I'm not blaming it all on the banks or all on the home buyers or the government rules. Each player had a hand in the collapse and any one of them could have changed the outcome.

If you want to talk about national debt, more could be done by eliminating entitlement programs than increasing taxes. Over half of the nations budget is spent on such programs.



First, its not going into the pocket of a rich individual but a large corp. Second, its called the trickle-down economics. You give the large corp a break on the money it already has so that it will spend it by buying a smaller company. The employees of the "small" company get paid more because they hold some form of vital knowledge. This is highly applicable in the tech world. The employees that are payed better spend more at stores. Which means they can afford to keep all of their employees. Which means their employees don't go broke. In the end the goal is to improve the economy as a whole.

anyways </rant>

Hotrock3

Trickle down economics? Do you remember Regan, and Bush and the economy after their reign? Trickle down economics caused the country to start talking about the national debt in the Trillions!

No thank you, I have seen that play before. Pay up Apple!

 

[notabadname]

Oh the irony.

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

Funny, the figure seems strangely familiar

Yeah, and if I make earnings on a business in Ohio, I don't want to pay any state tax to Indiana either. This isn't quite the same things as businesses selling products through Apple's portal of the iPad and therefore Apple taking a cut for providing a customer base.

 

[jarvis8484]

Hard to understand

I"m a teacher in Wisconsin . . . if you have been following the news, our new governor has declared war on state union workers . . . teachers, state employees, prison workers, bus drivers, etc. He will reduce wages by 8 to 12% or more and essentially make Wisconsin a right to work state by removing nearly all bargaining power. Of course, he has provided tax cuts for corporations. Apple has more cash on hand than nearly any other US corporation . . . we should cut them a break as they outsource most of their factory work. It's hard to accept talk of tax breaks for corporations that are making billions on the back of poor third world workers while US workers continue to struggle to find work or if fortunate enough to have a job, to have a living wage or any benefits.

 

[paduck]

[...] Second, its called the trickle-down economics. You give the large corp a break on the money it already has so that it will spend it by buying a smaller company. [...] </rant>

How's that trickle-down thing working out? Income inequity in America is the highest it has been in over a century. That's about how well making the better off has trickled down to help the not-better off.

Teddy Roosevelt said it best when he supported taxes on those who benefit the most from continuation of society's status quo should pay the most - and he meant the mega-rich at the top.

Not that there isn't a lot that can be done about policy implications of corporation taxes v. personal taxes. There most certainly is. But at some point Apple's profits should get taxed. The idea here is that they have a ton of money that no one has taxed (or has been taxed very little) and they want to repatriate it to America and not pay any taxes here either.

 

[mysticalos]

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.

it's already in their pockets. they aren't gaining the money. they already have it, just keep it banked overseas. 30% tax is asking too much to begin with. even if profits would still be huge -30%. Does the gov really deserve that much? imagine investing in a home, hiring contractors to fix it up etc. then when you sell it, the government, who had nothing to do with that home, gets 30% of the money from it just cause. that's obnoxious amount. 5% is more than generous.

lets look at the bigger picture. A company like apple keeps their money overseas, therefor they invest it overseas as well, since they cannot bring money back to US, instead of building a US factory and creating US jobs, they build a factory over there and create jobs for someone elses economy. They do wahtever they can to spend that money on their business THERE. Where if that money were in US, they could spend it here. This has nothing to do with making the rich richer. It's about a company wanting to spend THEIR money on their investments, not give it all to goverment. It would be in best interest of economy for gov to realize that in long run it'd help everyone including themselves. Better economy, less unemployment payouts etc.

 

[0815]

Can I also get a tax break? I also don't like to pay it (and I also pay it partially on foreign income) ....

 

[ladeer]

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.

you are wrong. the money returned won't go into the pocket of the rich at all, but directly into US economy.

i work for one of the listed companies and we have over $30b in foreign accounts. we have had many kinds of hiring freezes for US employees for many quarters and all depts are encouraged to hire off-shore employees (India). what happens is now i have to work with many people in diff countries, staying up late at night for conf calls w/ India/Singapore, or early w/ Europe. why the shift? because my company is paying the salary for these off-shore employee w/ off-shore money. if our money is off-shore, might as well hire off-shore people. i can personally attest to you many many American people will get hired by my company if we have the money available to hire them in US. if we pay US employee, it comes from US bank account however. Tell me, what would you do if you are running a company like that? would you hire US employee to pay a minimum of 30% premium?!

and let me tell you why the money won't go into rich people's hands. all the VP, SVP, and executives have something called "salary." having the money in US or not will not change their employment agreement or salary level. Money in US will allow US companies to hire more US employees and invest in US capital such as plants, acquisitions, etc.

lastly, companies like us are not evading taxes. the items we sell already were taxed in foreign countries. why shall we pay tax twice?

it's like you buy a new Toyota Camry for $30k, and you pay $3k of tax on it. The government made $3k from a $30k car.
Now when you want to sell it used after a year for $20k, the next buyer will pay $2k of tax. Now, off the $30k car, the government is getting $5k...!!!

Why will the same car be taxed twice? Why shall a government gain $5k from a $30k car? If you think about it, double taxation happens every where. A corporation pays 30% income tax, then pay salary to employee with the remaining 70% of money. These employee then pay 40% of tax again, before they could invest in stock. Then if they make money in stock, they pay tax again. If they give the money to their kids, they pay tax again.

Eventually, out of $100, government could take 70% of it thru multiple taxation.

If you understand this you will think twice about raising tax next time. Tax is not as simple as "just another 0.25%." It has a profound and compounding effect. If I tell you every car that sells for $30k, $5k will go to government, will you still buy the car as enthusiastically as before? or will you still sell your car?

Tax simply decreases incentives to trade and compete, hindering the growth of economy.

Lower tax is not helping the rich people only....it really helps the poor too when the people have money invest and spend. If you raise a lot of tax and remove the incentive to compete by providing welfare to everyone, then why do people need to work?

It's like when the unemployment was exnteded to 99 weeks, by friend who lost a job for a year told me he doesn't want to look for a retail job cuz the salary will be lower than his unemployment. Even he is very capable of working on many respectful jobs but he chooses not to, he chooese to live off unemployment...why? Because he can. People make decisions based on incentives and when you tax people a lot you remove their incentives to work hard, and when you provide social welfare too much you give them incentive to shirk.

 

[irun5k]

Does Apple pay foreign taxes on goods sold in other countries? If so, does anyone know what the overall amount is?

Remember that the consumer ultimately pays all taxes. You can tax a company all you want- it gets passed down to us in the form of higher prices. Yes, even the poorest of the poor... you know, the guy who has no shoes but for some reason buys an iPod... that guy is helping Apple pay their taxes in the exact same amount that Donald Trump does when he buys a new iPod.

Ultimately companies don't print their own money- so where else do you think they get the money to pay their taxes?

 

[paduck]

Yeah, and if I make earnings on a business in Ohio, I don't want to pay any state tax to Indiana either. This isn't quite the same things as businesses selling products through Apple's portal of the iPad and therefore Apple taking a cut for providing a customer base.

Well, if you earn income in Ohio and live in Indiana, depending on the agreement between the two states, you might actually pay taxes in both states. If you live in both Indiana and Ohio, you might have to file taxes in both states as well.

When I moved from Iowa to Virginia, I paid taxes in both places and the marginal basis for the tax in both locations wasn't how much I earned in each specific state - it was the combined total of my annual income regardless of source.

 

[leroypants]

That is not much of a surprise considering what a tax cheat Steve jobs is.

 

[mlarkin]

Keep the money abroad

More than half of the company's money is made abroad from the US. Why bring it to the US, and why pay taxes in the US. They have already been paid abroad once. And to think to give it to that moron dumbass to flush down the giveaway Obamacare toilet is dumb.

 

[apolloa]

hhmmm tough one, your big and make tons of cash, you should pay lots back into your country of origins government for (apparently) helping your country and it's people.

Your big and make tons of cash, you should be able to have that cash for your business and people and not your government...

Well maybe the US government should just stop any tax breaks or perks it gives to these companies in return for the reduction in the 35% tax on international earnings?

Still, good luck with that one, I think your gonna need it....

I think Apple should give it to the UK government then when that fancy new air craft carrier is built they can buy those fancy F35's for it from the off rather the in several years time, or it could pay for a fleet for BOTH of the carriers and keep the second one going, they won't mothball it as soon as it's launched then........... We won't have to ask the French for help then....

 

[ladeer]

THANK YOU for your voice of sanity! Isn't it interesting that this topic could generate _debate_ amongst the very people who would benefit from more corporate taxes contributing to US infrastructure? And I would wager that none of the advocates of the "tax holiday" in this forum will ever see the inside of the gate-guarded mansions in the Hamptons and Beverly Hills from which these requests are made.

Don't be stupid. How do you think the money we bring in can go to a "Select few?" Corporations are not Mafia. Every director's compensation is transparent and the stock granting is reported to SEC and shareholders. There are independent directors on the board overseeing everything.

What makes you think if a company gets to move money, their own money, from one country to another, then suddenly some fat cats will get millions of dollars?

Use some common sense otherwise you are the one who is insane and delusional. If you work in Appe as a VP of iPhone for example, your salary is fixed, your stock options is fixed, and any extra incentives are PERFORMANCE based. Just because your company make a lot of money one day it doesn't mean your will get a huge bonus. If that is true, then it means if your company cannot move foreign deposit into the US, then you are not getting paid as much money as you should, then why would you still work for your company? If companies really do that they will not be able to retain employees.

Public traded companies are not evil groups of rich people ok? If anything they are the most transparent and honest business entities because of so many laws and check-balance mechanism. Discrimination or sex harassment are all strictly not tolerated fearing of huge law suits. They are made out of tens of thousands of employees, regular folks liek you and me, having kids and wives and they want to hold onto their jobs but their companies can only afford to hire employees in foreign HQs because the company can pay these people 30% less!!!

Do you understand this now?

 

[patsfan83]

it's already in their pockets. they aren't gaining the money. they already have it, just keep it banked overseas. 30% tax is asking too much to begin with. even if profits would still be huge -30%. Does the gov really deserve that much? imagine investing in a home, hiring contractors to fix it up etc. then when you sell it, the government, who had nothing to do with that home, gets 30% of the money from it just cause. that's obnoxious amount. 5% is more than generous.

lets look at the bigger picture. A company like apple keeps their money overseas, therefor they invest it overseas as well, since they cannot bring money back to US, instead of building a US factory and creating US jobs, they build a factory over there and create jobs for someone elses economy. They do wahtever they can to spend that money on their business THERE. Where if that money were in US, they could spend it here. This has nothing to do with making the rich richer. It's about a company wanting to spend THEIR money on their investments, not give it all to goverment. It would be in best interest of economy for gov to realize that in long run it'd help everyone including themselves. Better economy, less unemployment payouts etc.

Why did they build the server farm in NC then? If you think that an overseas tax rate of 5% would get them to manufacture their products in the US vs. China at 5-10x the cost, you are delusional.

 

[Full of Win]

Good, I hope they keep it overseas. No need to bring it back to the US with its confiscatory tax code.