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

[papajohn]

Well, not really. Corporations don't pay taxes. Their customers do. Cause and effect: remove those corporate taxes and watch prices go down due to competitive forces. Econ 101.

Now, given that, who would you rather have/spend that money? The govt who will give it away in failed programs or bailouts, or Apple who will grow the economy, hiring people, selling products, designing, growing the company for investors, etc.

Econ 101, I'm not sure what school you went to that taught you that removing corporate taxes will cause prices to drop due to competitive forces. Sesame street does not count.

Perhaps you forgot about a small company called General Electric. The company reported worldwide profits last year of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill this year? None. In fact, G.E. claimed a tax rebate of $3.2 billion due to generous corporate loopholes. Exxon had $19 billion in profits for 2009, paid $0 in taxes, and even received a tax rebate of $156 million. Quick Facts on Verizon

Campaign Contributions: Total Over 10 Years (2001-2010), $12 million

Lobbying Expenditures: Total Over 10 Years (2001-2010), $131 million

Government Contracts: $488 million in 2008; $5.1 billion from 2000-2008

Profits in 2010: $12 billion

Taxes Paid for Last 2 Years: $0

As a matter of fact, the GAO reported in 2008 that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”

Companies have become all too astute at paying for loopholes which allow them to shift profits abroad, or move their gains (on paper) to foreign low-tax/no-tax nations.

Before everyone swallows the tea party rhetoric and bemoans their favorite corporation's high tax rates, now is a good time to look at the overall tax payments corporations have made. The change in corporate taxes — not merely rates, but what they actually paid — over the past half century is astounding.

Corporate Taxes as a Percentage of Federal Revenue
1955 . . . 27.3%
2010 . . . 8.9%

Corporate Taxes as a Percentage of GDP
1955 . . . 4.3%
2010 . . . 1.3%

Individual Income/Payrolls as a Percentage of Federal Revenue
1955 . . . 58.0%
2010 . . . 81.5%


By your logic, bretm, since Verizon paid zero in taxes in 2010, my cell phone bill should have dropped "due to competitive forces". I don't recall seeing that. Come to think of it, I saw it increase, plus had a data cap tossed in for good measure. Maybe my situation is unique though. Anybody else see their phone bill drop?

To say "remove those corporate taxes and watch prices go down due to competitive forces" is both dangerous and naive. Please stop drinking the tea party kool aid. I agree a flat, no loophole, tax rate is best for all, however I refuse to accept that corporations, including Apple, should receive a second tax holiday, particularly when I have yet to receive my first.

BretM, can you hear me now?

 

[Swift]

So you would rather they not pay taxes on earnings?

I would rather there be an incentive for repatriating that money. Hey, let's collect no taxes on money brought back home and invested in new plant, new jobs, in America.

Apple does need to keep a lot of cash overseas because of overseas operations, so it's not just a tax dodge.

 

[henchman]

I would rather there be an incentive for repatriating that money. Hey, let's collect no taxes on money brought back home and invested in new plant, new jobs, in America.

Apple does need to keep a lot of cash overseas because of overseas operations, so it's not just a tax dodge.

It is a tax dodge.
And none if that money will be used fr jobs here.

Wake up.

 

[OceanView]

Econ 101, I'm not sure what school you went to that taught you that removing corporate taxes will cause prices to drop due to competitive forces. Sesame street does not count.

Perhaps you forget about a small company called General Electric. The company reported worldwide profits last year of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill this year? None. In fact, G.E. claimed a tax rebate of $3.2 billion due to generous corporate loopholes. Exxon had $19 billion in profits for 2009, paid $0 in taxes, and even received a tax rebate of $156 million. Quick Facts on Verizon

Campaign Contributions: Total Over 10 Years (2001-2010), $12 million

Lobbying Expenditures: Total Over 10 Years (2001-2010), $131 million

Government Contracts: $488 million in 2008; $5.1 billion from 2000-2008

Profits in 2010: $12 billion

Taxes Paid for Last 2 Years: $0

As a matter of fact, the GAO reported in 2008 that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”

Companies have become all too astute at paying for loopholes which allow them to shift profits abroad, or move their gains (on paper) to foreign low-tax/no-tax nations.

Before everyone swallows the tea party rhetoric and bemoans their favorite corporation's high tax rates, now is a good time to look at the overall tax payments corporations have made. The change in corporate taxes — not merely rates, but what they actually paid — over the past half century is astounding.

Corporate Taxes as a Percentage of Federal Revenue
1955 . . . 27.3%
2010 . . . 8.9%

Corporate Taxes as a Percentage of GDP
1955 . . . 4.3%
2010 . . . 1.3%

Individual Income/Payrolls as a Percentage of Federal Revenue
1955 . . . 58.0%
2010 . . . 81.5%


By your logic, bretm, since Verizon paid zero in taxes in 2010, my cell phone bill should have dropped "due to competitive forces". I don't recall seeing that. Come to think of it, I saw it increase, plus had a data cap tossed in for good measure. Maybe my situation is unique though. Anybody else see their phone bill drop?

To say "remove those corporate taxes and watch prices go down due to competitive forces" is both dangerous and naive. Please stop drinking the tea party kool aid. I agree a flat, no loophole, rate is best for all, however I refuse to accept that corporations, including Apple, should receive a second tax holiday, particularly when I have to receive my first.

BretM, can you hear me now?

Thanks for your detailed info.

I do hope that people can see that influence on our political leaders from corporations and lobbyists have made our current system unbalanced and that we should strive to bring more balance back so that we the people can strive to improve our lives.

 

[marksman]

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They should buy google and shut it down !

 

[alexN350z]

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They should buy google and shut it down !

nice idea

 

[joemod]

Marketable Securities

I don't know if it has been asked before. Can someone knowledgeable explain in simple words what short term marketable securities and what long term marketable securities are?
TIA

 

[vvebsta]

Apple Store is down! What are they updating?!?!

http://store.apple.com/

 

[ladeer]

I don't know if it has been asked before. Can someone knowledgeable explain in simple words what short term marketable securities and what long term marketable securities are?
TIA

apple (or any company) doesn't keep all its cash in cash format (such as a balance in a checking account) simply because it earns very little interest. some of the money is in the form of securities which basically mean different instrument of investment from bond to stock to anything else that pays higher interest (return) than a bank account.

short term and long term simply mean how "liquid" such fund is. liquid means liquidity means "how easy is something to be converted back to cash."

your house is less liquid than your car is less liquid than your stock is less liquid than your CD account is less liquid than your cash.

your house takes the longest time for you to convert it to cash. the faster you want to convert it, the more u will take a loss.

same goes w/ car, but selling a car is much faster than selling a house.

if you want to take your money out of CD, you might pay a small penalty but you get the money quickly.

cash you can get it right away without loss or penalty, hence the most liquid.

some of apple's cash is in these forms of investments, hence they are "Cash equivalent."

by no mean i am talking about houses, land, patent, capital, plants, inventory which are made out of the non-cash part of the asset.

in other words, a company asset = cash/cash equiv. + non-cash = liabilities + owners equity

 

[HelveticaRoman]

Does Apple need America at all; why not relocate to Switzerland where the tax environment is a little more pragmatic?

 

[2499723]

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So, as a private citizen, I'm expected to pay taxes (which I'm perfectly fine with, by the way), but big corporations with the kind of money that can significantly help boost state economies are given a free pass to hold their money offshore. It's so frustrating. For those who think the market economy is 'American', think again. Businesses go where the money is and where it won't be taken away. Look at Amazon and the whole California fiasco. Amazon should be taxed on its online purchases like every other small business in California (and every citizen). Do people think the money to pay for our schools, health care and other benefits comes from thin air? Instead of complaining about the taxes we have to pay as individuals, we should be demanding that companies bring the money earned in America BACK to America. Foreign-earned money can stay where it is to help those local economies. It just makes sense. Apple's just playing the same game as everybody else, but it would be nice to see a few companies stand above the rest on this one. I get taxed on my MacBook Pro, iPod and iPhone purchases. I expect that money to go back into my economy. We should expect the same out of Apple.

 

[ladeer]

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Companies act on incentives. If they are not breaking any law, which they aren't, you won't ever find them wasting billion of dollars just to build bridge or school for the government. Companies are in the business of honoring its fiduciary duty to its shareholder by makin money, not building bridge or paying tax. If a government wants apple to pay tax, then make it illegal to withholding tax off shore! Until then, these companies will continue to invest off shore, use the large cash pile to hire more engineers and great talents from china and India, build factories in south America, etc. At the end it only hurt American job seekers and government. Doesn't hurt companies like appl or csco a bit

 

[GermanyChris]

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_0 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A334 Safari/7534.48.3)

So, as a private citizen, I'm expected to pay taxes (which I'm perfectly fine with, by the way), but big corporations with the kind of money that can significantly help boost state economies are given a free pass to hold their money offshore. It's so frustrating. For those who think the market economy is 'American', think again. Businesses go where the money is and where it won't be taken away. Look at Amazon and the whole California fiasco. Amazon should be taxed on its online purchases like every other small business in California (and every citizen). Do people think the money to pay for our schools, health care and other benefits comes from thin air? Instead of complaining about the taxes we have to pay as individuals, we should be demanding that companies bring the money earned in America BACK to America. Foreign-earned money can stay where it is to help those local economies. It just makes sense. Apple's just playing the same game as everybody else, but it would be nice to see a few companies stand above the rest on this one. I get taxed on my MacBook Pro, iPod and iPhone purchases. I expect that money to go back into my economy. We should expect the same out of Apple.

They shouldn't have loophole and should pay their share, but the amount of money no matter how little or how much should influence this.

 

[macgrunn]

66% of Apple's $81B in Cash is Held Overseas, and still no Apple Store in the Netherlands.

 

[alphaod]

I wouldn't bring money back the US either if I was in there shoes with the way the system is here.

 

[prestomusic]

Gotta love the way that corporations call for more tax breaks, the richer they get

 

[Bluestrike2]

I don't man...all I do know is that we used to manufacture goods in this country and we were just fine.

We still do; it's just that we do so far more efficiently nowadays, freeing up labor for other purposes.

 

[KPOM]

Better than that. Apple does not pay the 35% rate bandied about here. I doubt any company does. That is the rate before they start applying legal deductions. Apple has mentioned many times that their effective rate is about 25%.

Their effective rate tax into account the effect of leaving overseas earnings outside the US. In FY 2011 and FY 2010 their effective rate was 24%, mostly because they had a lot of foreign income. in FY 2009 and FY 2008, their effective rate was 32% because the mix of foreign income was lower.

 

[ScottishDuck]

Businesses will always act in a manner, legal or not, that gives them the most profit. It is the job of regulation to ensure the most profit lies in doing the "right thing", whatever you may believe that to be.

 

[janstett]

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

#occupyinfiniteloop

Why don't they want to pay "their fair share"?

----------

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

I recall reading an aritcle in one of the trades that if the iPhone were made in the US it would cost around $2500. With the insane costs of manufacturing in the US, the flip side to this "living wage" argument is that the goods and services we all buy and use would be far more expensive and thus our standard of living would go down even further. I know if iPhones cost $2500 I wouldn't have one.

Those of us who can afford to pay taxes and keep this country running need to pay taxes so that the United States of America can be a better place for us all.

The problem is that the government's spending is not tied to its income -- as it is for the rest of us. We're now what, $18 trillion in debt with a $2.3 trillion annual budget defecit?

You could confiscate Apple's entire war chest and it wouldn't make a dent in a single year's budget deficit - less than 1%.

There's also a fallacy that increasing taxes actually goes to better roads, schoolteachers and firefighters. We're spending $4 trillion a year at the federal level and still can't get it done with that? Look into where the "stimulus" money actually went for the answer -- engorging the federal government goes towards propping up decades-long institutional failures not roads and teachers and firefighters.

 

[MaxCast]

maybe they should just buy Samsung.

 

[logandzwon]

I'm all for taxes. With taxes I civilization. I'd actually prefer to pay MORE taxes and have better quality of civil services then I'm paying now.

That said, I'm fully against treating corporations as people. A corporation is nothing more then a group of people. A corporation doesn't make money, and shouldn't be able to spend money for non-buisness related expenses such as charitable donations, political donations, or any other donation. Every penny that comes into a corporation will either go back into resources, such as paying rent/morgage, buying equipment used to operate the business, or buying raw materials to make their products, all of which is tax deductible anyway, or go to the people that work/own the company, whom are the ones that should be taxed directly. This tax the corp some, then tax the owner again, but with a lower tax, is retarded.

Tax income, not imaginary fake people.


Also, at that point it wouldn't matter where Apple kept their money, nor where their HQ was. The humans making the wealth would be paying the taxes on the money they receive.

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#occupyinfiniteloop

I recall reading an aritcle in one of the trades that if the iPhone were made in the US it would cost around $2500. With the insane costs of manufacturing in the US, the flip side to this "living wage" argument is that the goods and services we all buy and use would be far more expensive and thus our standard of living would go down even further. I know if iPhones cost $2500 I wouldn't have one.

People says this, but never say WHY. International manufacturing is not my industry, but the owner of FOXCOMM gave an interview a while ago. He said he wants to open a factory here, but the legal liability is way to high. He'd need a team of lawyers and money laying around to pay off unions and law-suits.

 

[Thunderhawks]

The thing is, they removed manufacturing jobs and created them elsewhere.
So if they don't want to bring jobs back, then just pay your taxes like the rest of the people do in the US and stop skirting the laws to your benefit.

If they follow the laws and have smarter people than the government in finding loopholes why would they be at fault?

It amazes me how many people here have just emotional responses without realizing that money is like vapor. One draft and it goes someplace else were it can stay unharmed.

The purpose of a business is to make money and keep as much of it as possible!

If the government allows it, that is not any corporations fault!

The business climate (tax structure, regulations etc.) in the US is more than unfriendly. Most states are bankrupt and grab at anything they can get and invent new taxes.

I work in New York. They "invented" a metropolitan commuter tax and imposed it retroactively even issuing fines for being late with payments from the past when that tax didn't exist.

Still they have to increase the bridge tolls to amazing height!

Lost a large customer from another state who is subject to Nexus tax, if he does business in NY with anybody, as NY wants to tax all of their US income.

The counties are worse. Near me, they made a no tax deal with IBM in return for 600 jobs or so. Upon checking IBM still enjoys the tax break, but the jobs were never created (Yes, a few), instead they had lay offs.

Unemployment has constantly assessments of interest for borrowing money.

The list is endless and the government waste gets worse the higher one goes.

Let's explain to somebody who has or made money that it's a good idea to bring it back, so it can be wasted.

 

[janstett]

I love Apple products, but they would walk over anyone in their way of raising their cash-on-hand another few billions. American greed. Greedy Wall Streeters and greedy corporations.

With just a slight perspective adjustment, you can see oppressive taxation as government greed. Nobody holds a gun to anybody's head to make them buy an Apple product, but you can be arrested and your assets seized if you don't pay your taxes.

 

[janstett]

I'm all for taxes. With taxes I civilization. I'd actually prefer to pay MORE taxes and have better quality of civil services then I'm paying now.

You are free to pay more than you are legally required to. In fact, all the people pining away for higher taxes are free to send more money to the IRS than they need to.

Warren Buffet says taxes should be higher because he pays a lower rate than his secretary -- he is free to send in a check.

At some point you will discover paying additional money in taxes does not go into better quality civil services (most of those are paid for at the local level, anyway). It goes to propping up failed institutions, stuffing government pension funds, paybacks and boondoggles like Solyndra, and into the gaping maw of the defecit/debt.