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Apple May Build $1 Billion Research and Development Center in Vietnam
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You usually get credit for taxes paid outside the US.
Apple's deal though, is that they avoid paying taxes even outside the US.
If you mean via a tax holiday, that was already tried some years ago. Turned out that the companies who had lobbied for the break by saying they would invest the money in US jobs, lied. It didn't happen.
That's why Congress doesn't believe them this time. Once burned, twice wary.
It really burns me that people know nothing about the way taxes work. The US government would take roughly 50% of the income that Apple earned overseas if they tried to spend that in the US. They have no right to that whatsoever, and there is no foreign tax credit that's going to lessen that burden.
By the way, the ceiling on the FTC is so low that as an expat engineering manager working overseas, I was able to offset only 20% of my foreign tax bill. The rest was exempted because my total compensation package was more than $200K - of which $78K survived taxation.
The liberals who want to simply steal other people's money constantly say companies like Apple Pay no tax should pick up a copy of the annual report to stockholders. It's spelled out in black and white. I've read it every year since 1988.
It's very easy to stimulate the economy by allowing companies to repatriate income earned overseas by simply eliminating the tax for every dollar spent directly on investments that provide jobs.
Why you guys keep thinking the way to create jobs is to give our money to the government is beyond me.
More and more companies will continue to invest their overseas profits outside the country until these tax confiscations end. Make it even harder for them, and they will move out completely.
It's not rocket science. It's good business.
You want to know how much jobs are worth to the economy? Look up the SUNY project in NY. The state is building billion dollar factories and leasing them to high tech companies for $1 a year plus a guarantee of jobs. That's what 10,000 jobs is worth to the economy of New York State.
Imagine what Apple could do by investing just $60B tax free back in the US.
Thank your politicians for that, as they are hell bent on stealing as much as possible through taxes and fees instead of building a thriving economy. If the politicians did not really have to buy votes in order to get elected, maybe our taxes could be a little smaller and companies a little more free to invest, but alas not in the corrupt ol USA.
There is a lot more to the USA than Cupertino. There are all sorts of places in the rust belt that could use the jobs an R&D center would create.
I'm nit completely against development outside the USA, such development is the only way to really stay in touch with local needs. However it is pretty obvious that the is plenty Apple could be doing right here in the USA. They choose to not too though and after a bit that just becomes offensive.
In any event I suspect there tax avoidance schemes will meet with real hostility if Trump gets elected. If Hillary gets elected we will be at war with China within days and that means all of Apples China investments go down the tubes. Either way they are going to have a lot of negativity pushed their way in the next couple of years. Consider this if Apple looses China production how long would it take them to setup production someplace else. Years probably and all that stored cash will evaporate in the mean time.
Apples exposure to problems with or in China are massive right now. Significant damage will happen if relations go down hill. Think about what would happen with a 100% loss of production capacity.
Why will be at war with China? I assume a HC presidency will look a lot like Obama's run with a bit more business-friendly policy in the mix.
That isn't the number I'm hearing. Beyond that the law is the law, the fact that Apple avoids the law by keeping money off shore just highlights that they out a lot of effort into avoiding paying taxes.
The problem is we have a pretty low corporate tax rate right now, so compared to a lot of other countries this additional tax upon Apples off shore funds isn't really that big of a deal. The reality is the tax rates can be extremely high in some parts of the world for corporations. Frankly Apple just looks to be petty with respect to repatriating cash.
It is a question of how much they are paying relative to income that is the problem. They are earning huge dollars over seas and are in fact avoiding US taxes on those earnings. This isn't debatable they have acknowledged that they are holding earnings off shore. You can question the wisdom of the law but this is what is happening right now, Apple is avoiding paying taxes, basically taking a passive / aggressive action.
If only that worked in the past. The fact is previous attempts at tax holidays for off shore earnings just resulted in more jobs going to China. Almost none of the repatriated money resulted in real economic impact within the USA.
No body is saying that. The truth of the matter here is that Apple is avoiding taxes by keeping off shore earnings off shore. That is the definition of tax avoidance. We can debate the wisdom of the tax laws in the USA but the fact remains this is just a minor wrinkle in a lot of strangeness with in the US tax system.
Overseas investment has zip to do with this.
Good business is paying your taxes so you don't end up looking like another crooked corporation. If Apple doesn't like the law they can work to get it changed. However in the mean time they really need to be paying their taxes fully.
I live in NY State and frankly the economy sucks here. High taxes are one of the big reason but the left leaning government is part of the problem. You can't really pass off NY as a positive example for anything these days. If anything NY actually supports your position that excessive taxes have a huge negative impact on an economy.
In any event that gets us off track as the issue involves Apple avoiding taxes by not repatriating money earned off shore. This is what they are doing and frankly it isn't even debatable
Well like most other companies they would likely redistribute it to share holders. In the past allowing the money to come back to the USA, tax free, has not resulted in a positive economic impact. Not even close, in fact it has has a very negative impact on jobs creation. It literally gave companies incentive to shut down US operations to move off shore.
Your points aren't really that far out of whack with mine, excessive taxes are a huge problem and weigh down an economy. However just because I believe taxes may be excessive doesn't mean I can just say I won't pay them because they are excessive. This is exactly what Apple is doing and frankly it stinks. The right answer is to pay your taxes and work to correct what you ink is unfair in the system. People want to see these sorts of positive changes in NY but our government is so corrupt that I'm nit sure if the state will ever be competitive again.
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Apple needs out of USA R&D,, offices, and production so when Trump get in power and demands Apple takes production to the USA, Apple can stick up a virtual finger and move everything to another country.
Like that would go over well with customers. As for Trump at least he realizes that the massive debt this country has is a huge problem. He might not have all the answers but at least he isn't trying to fool everybody into believing that the debt is OK. It isn't OK especially when we owe so much to China. China could easily confiscate US assists in China if the US fails to pay interest on that debt.
This is just one of the reasons I say Apples exposure in China is a massive problem. Frankly it doesn't matter whom is elected for the next president either. Clinton will almost certainly embolden China to start a war which they are obvious prepping for right now. If Trump is elected I see less of a chance for war with China but there will be much anger as he works for fair trading practices. Really it doesn't take a crystal ball to see where China is going.
In the end Apple will need to make some decisions about its heritage and its desire to remain an American company. If they do so they best be willing to pay their taxes.
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Are you serious here? Spend a half hour everyday reading the news! China is positioning itself for a war in the Pacific. The crap coming out of China about the China Sea is a daily occurance! They are literally stealing islands long held by other countries and are violating international law.
Obama has done massive harm to this country and frankly has had a bigger negative impact on the international view of the USA than Bush did. HC has demonstrated that she is clearly an idiot and also believes she is above the law and free to do whatever she wants. One would have to be mentally ill to believe HC can handle the job. She has screwed up repeatedly and frankly has gotten many people killed due to her stupidity.
You are riding an assumption that companies want to invest all their offshore money in the USA in the first place, Apple won't invest 60 billion in R&D if it were tax free, they're going to do as they're legally obligated to do give it all back to shareholders. Which is what has happened every time the USA has made a "tax holiday".
Companies will make more jobs only if they need to, it's that simple.