There is no "double" taxation. When the money is repatriated, you subtract the amount already paid in taxes on foreign soil from what you owe the United States. In other words, you pay the difference. Apple just has the sweetheart deal in Ireland where they basically pay nada, so they would have to pay close to the full rate to repatriate.
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Apple Raises $7 Billion in Debt Ahead of Trump's Proposed Tax Holiday
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There is no "double" taxation. When the money is repatriated, you subtract the amount already paid in taxes on foreign soil from what you owe the United States. In other words, you pay the difference. Apple just has the sweetheart deal in Ireland where they basically pay nada, so they would have to pay close to the full rate to repatriate.
Couldn't Apple Inc. just take out a hefty loan from Apple Ireland, Inc. for some laughable interest rate like 0.01%?
Yup, deficits only matter when a Democrat is POTUS.
Where is my tax holiday? I payed more in taxes this year and made a bit less.
I don't think so. If the money was coming from the foreign subsidiary, it would likely be considered as getting a distribution from that subsidiary or otherwise disallowed.
At any rate, that wouldn't help Apple much. Apple's already paying low interest rates on its borrowing. And it's getting some return on that money that is held by foreign subsidiaries. If Apple borrowed money directly from the foreign subsidiaries, yes, it might save a little bit on its borrowing costs. But it would also lose some of its interest and/or dividend income - that money which the parent company borrowed from the subsidiary would no longer be earning money.
Apple is in a really good position in this regard because it is considered to be extremely creditworthy. There are a number of reasons for that, but one of them is the reality that it has so much cash. So it can borrow money cheaply. In some cases it may even be getting more money in return for its savings (e.g. some of the money that is loaned to other companies) than it is paying in interest on its borrowing.
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You're welcome.
In short: 10% of something is better than 100% of nothing. We get no revenue from offshore holdings, and encouraging companies to repatriate some of the money increases total tax revenue. Money that desperately needs to go to infrastructure.
I get why it's good for the Treasury, but I was asking more along the lines of why Apple would care about doing this.
I think he will be able to pull both sides of the isle together to do this. Other than dems feeling the need to "resist" (they have become the party of "no"), this is attractive to both sides. The issue will be in where the money goes. Hopefully towards making currently insolvent entitlements, solvent. I'm against a big infrastructure plan.
MAGA!
And for the love of Pepe can we please get an updated Mac Mini!
MAGA!
And for the love of Pepe can we please get an updated Mac Mini!
I'm not sure why, this is something we desperately need. Infrastructure isn't just about filling potholes in the roads, it's providing clean water, electricity, telecoms, (and probably soon) internet to millions of people.
If the American economy and American people are going to have a place in the economy of the future, we need infrastructure spending.
I've always felt infrastructure is something that should be handled at the state level, along with many other functions of the federal government (education, health care especially). At the state level, you have less swamp between a taxpayer's dollar and the project itself.
I can understand that. Maybe in the future we'll see states taking a more proactive stance on infrastructure. Healthcare I'm not sure about, it's a system that enjoys the benefits of being a both municipal and private system, with ballooning costs and little returns. I think it's due for an overhaul.
Basically US tax law is super complicated and gets more complicated when it comes to money from abroad. The problem isn't even just limited to bringing your own money back (or Apple's money) but there are problems if I provide a service to a foreign business and they want to pay me.
What a term! "TAX HOLIDAY"!! Insane semantics... I really wish we were getting a "Federal Holiday" where we were cleaved from the unconstitutional tumor making the true government look like a demonic elephant man beating cash out of people to put into the hands of the politically wealthy. You know, the thing that tries to control everyone and everything and then propagandize and gently terrorize the population to divide and conquer, to get more control of everyone('s money) and destroy rights and responsibilities while instituting bloated, arbitrary law.
Apple--pay your "fair share" and stop acting like a victim.
Apple--pay your "fair share" and stop acting like a victim.
You are correct. And you highlight the issue with the current system, rather than money going straight to the states (say via a higher state income tax and lower federal income tax... which would be manageable with a smaller federal government), the federal government collects taxpayers' money and dishes it back to the states based on the FEDERAL government's priorities, not the states'. Not ideal. Granted, I don't see the status quo changing anytime soon, so a federal infrastructure plan could be better than nothing at all.
Not just for billionaires.
1. This would benefit shareholders more than someone like Tim Cook.
2. This would make it easier for a company to reinvest money in America so it is good for all. This injection of capital creates a multiplier effect.
All dividends have to be payed for by Apple US, because that is the corporate entity people own shares of. Ditto for share buybacks, otherwise a subsidiary would end up owning shares of the holding company. This applies also to acquisitions (at least those that get integrated into the company, strategic investments like those in Didi Chuxing could be held by Apple's Chinese subsidiary). Without the first two items, Apple US probably has enough cashflow to pay for US expenditure and investment and the relatively modest acquisitions they make. In fact, Apple did not sell bonds before the dividend and share buyback program started.
Theoretically, Apple Ireland could give Apple US a loan but tax laws probably consider that a hidden repatriation and slap the same tax rate on it.
You're crazy if you think random individuals would even make up .1% of the foreign money that would be brought in.
Trump's plan already contains a corporate tax rate of 15% whereas the personal income tax rate is more in the order of 30%.
Apple is under no obligation to repatriate funds made overseas. Remember this. It is not sheltering in that regard. It is in the best interest of the US economy to find a rate where everyone wins. IRS collects some taxes and multinational companies can then use their money to reinvest in the US.
If anything, this should make the big banks mad because companies like Apple will require less debt, meaning less interest for the banks.
Apple has plenty of money to do whatever it wants in the U.S. in terms of building buildings and paying employees. What it can't do (without bring the cash back and paying US taxes on it) is pay a dividend to its shareholders or do stock buybacks. That has to be done by Apple, Inc. (the U.S. parent) and the money has to be in the U.S. to do that.