Economy changes (up or down) take long time to result into government incomes, the "deficit doubled" you are describing here is EXACTLY the bad results caused by what Bush did.
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Apple Raises $7 Billion in Debt Ahead of Trump's Proposed Tax Holiday
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Economy changes (up or down) take long time to result into government incomes, the "deficit doubled" you are describing here is EXACTLY the bad results caused by what Bush did.
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Having a tax policy that required income earned by any foreign corporation in which a U.S. company held an interest, even if the profits were kept in the foreign corporation's country, to be taxed at a significant rate would probably result in less tax being collected by the U.S. Companies would, to an extent even greater than now, choose to locate their headquarters abroad in tax havens. There are nice things that America offers, but at some price point they aren't worth the cost of the tax. We live in a competitive world, and countries compete for businesses by, among other things, offering low tax rates.
It's not tax evasion to arrange a company's affairs so as to reduce the amount of taxes due. Apple's Irish subsidiary pays all the taxes owed to the Irish government (if any), and until and unless the funds are moved to the United States, American tax law does not consider it to be subject to U.S. corporate taxes. Ordinary American individuals pay individual taxes which under some conditions may require them to pay tax on some portion of foreign-earned income, but all ordinary American companies are free, under existing law, to keep the money earned by their foreign subsidiaries in the country where they are located and spent without having to pay U.S. taxes.
Having a tax policy that required income earned by any foreign corporation in which a U.S. company held an interest, even if the profits were kept in the foreign corporation's country, to be taxed at a significant rate would probably result in less tax being collected by the U.S. Companies would, to an extent even greater than now, choose to locate their headquarters abroad in tax havens. There are nice things that America offers, but at some price point they aren't worth the cost of the tax. We live in a competitive world, and countries compete for businesses by, among other things, offering low tax rates.
Notice I did not say it wouldn't benefit Cook. I just feel compelled to point out that it is good for everyone. It is easily forgotten and it turns political.
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You clearly have not looked at his proposal.
You can't do that, but you can use the money overseas to open stores overseas etc....
And I think for the most part, Apple uses the overseas money to buy US Treasury bonds.
Though if we assume a probably best-case scenario of a one-off repatriation tax rate of 10%, that 10% has to be lopped off the earnings made from the savings abroad in that comparison. On the other hand, interest payments by Apple U.S. can probably be deducted from U.S. earnings at a marginal tax rate of 35%, whereas income generated abroad from savings might be taxed at a lower rate than that.
Though Ireland ending its special deal with Apple should have brought that number up significantly. And Apple Ireland is where most of Apple's foreign reserves are probably stashed. And Ireland's standard 12.5% rate is pretty unique among developed countries. For most countries it's more in range between 20 and 25%. Of course, as with Ireland, Apple will try to steer its profits to those countries with the lowest rates. And how many special deals or use of loopholes it employs on top of that is not fully clear, though it seems to stay clear of arrangements involving classic tax havens on small islands.
Wrong. Regular Americans don't have $256B in cash. That cash could do a lot of good for the economy.
Corporations have to pay major taxes on cash earned overseas so they keep it overseas instead of paying all that tax. The tax holiday will incentivize companies to bring that cash back at a low rate they can accept and then they can use that money to invest. If nothing happened that money would just sit and be invested in overseas business.
Major Obama failure for not even trying this.
Many posters in here are correct, corporations should not have to pay any less than Americans and with that being said, nobody should be forced to pay an income tax, its theft and not American.
Trump's Budget it projected to add $20Tn to the national debt. He's managing to spend significantly more while having government do significantly less.
Damn efficiency feels good!
But it won't. As I posted elsewhere, Apple has more cash on hand than it knows what to do with. They will continue to sit on most of that money, no matter where it is being held. They're not going to spend it.
By the way, this is the main reason why tax cuts for the rich and for corporations don't boost the economy (statistical fact). Cutting tax for the middle class and poorer people has a far larger effect, because they spend most of what they get back into the economy.
If Apple brings back that cash they can use it to pay a monster one-time dividend. As an Apple shareholder that would make me happy.
The motion of all that cash will also cause issues for the local banking systems in question, as that liquidity will suddenly vanish.
The motion of all that cash will also cause issues for the local banking systems in question, as that liquidity will suddenly vanish.
Americans have to file US taxes, even if they live abroad. They are also responsible for tracking the exchange rate on the date payments were made. In the case of corporations, they can declare such income as perpetually invested overseas. I'm not aware of any similar means of deferring taxes that would apply to individuals without inviting scrutiny and audits.
If that were the case it would make borrowing rather than repatriating an even better option. But as it is Apple pays U.S. income taxes on the interest earned on those undistributed foreign earnings. In effect, the borrowing costs are deducted from interest earned and Apple pays U.S. income taxes on the difference.
Yeah, most of the profits that come from Apple's non-American sales are considered attributable to Apple's Irish subsidiaries. That's because the basic convention is that those profits belong where the value is created, not necessarily where sales happen. And Apple's Irish subsidiaries have agreements with the parent company that go back almost to Apple's beginning whereby they share development costs and then the Irish subsidiaries own the value creating piece for sales outside the Americas. Most of the profits that come from sales in the Americas are considered attributable to (and thus taxed in) the United States.
Yeah, thats what the tax-lovers always try to throw at everyone. Scare tactics. Heres the deal: The Govt collects MORE than enough money to do what it ought to be doing. The problem is that the Govt pisses away way too much tax money on BS things instead of true needs like roads, bridges, food safety, etc. Lets start with the numerous "programs" that benefit only a few people but cost us dearly. Lost of wasted money via social programs and all the freebie garbage. Then you have huge amounts of money being blown on Govt employees and their never-ending wages and benefits. Pensions alone are KILLING New York State and California, let alone the other wasteful spending. How about foreoign aid? Sorry but FOCK the UN and whatever other countries are stealing my money. Go solve your own problems. If they just cut that stuff we could fix a LOT of roads and bridges.
We dont even have to get into more details here. The Govt has proven time and time again that they are incredibly ineffecient and waste money like its nothing. Thats because its NOT their money and its easy to waste money when you didnt earn it and its not yours.
So, once the Govt gets "lean and mean" about spending, come and talk to me about what ought to be done with taxes. Most people fully understand that we have a SPENDING problem not a revenue problem.
Why would Apple pay U.S. income tax on interested earned on foreign 'cash' holdings if it doesn't repatriate the interest earned back to the U.S. and keeps it in its foreign subsidiaries?
The short answer is that tax laws are complicated.
The slightly longer (and hopefully slightly more elucidating) answer is that different kinds of income are treated differently in this context, i.e. when it comes to the earnings of foreign subsidiaries which U.S. corporations own. Certain kinds of income - e.g., interest or dividend income - of controlled foreign corporations are taxed in the U.S. (i.e. the U.S. owners of those corporations are taxed on it) whether that income is distributed (i.e. to the U.S. owners) or not.
If you'd like a longer explanation or to understand why we'd choose to do it that way, let me know and I'll try to return to the subject. If you'd like to look into the issue some yourself, you might start by googling Subpart F income. That's the kind of income we're talking about.
1. The largest shareholders are often the upper management. Tim Cook will be very happy and very well compensated if the Apple cash is repatriated.
2. We have evidence from the last tax holiday under G. Bush in 2004 that the money brought in was overwhelming used to for dividend payouts and stock buybacks. There will be no "reinvestment", just a giveaway to the 1%.
If Congress decides that 35% is too high a corporate tax rate and wants to lower it without exploding the deficit, fine. But a tax holiday is a sham.
Sounds like you should buy some Apple stock then since you know what is going to happen.
