“Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home,” Richard Rubin reports for Bloomberg.
“Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations,” Rubin reports. “The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles.”
“‘It just makes no sense to repatriate, pay a substantial tax on it,’ said Joseph Kennedy, a senior fellow at the Information Technology and Innovation Foundation, a policy-research group whose board of directors includes executives from Microsoft and Oracle,” Rubin reports. “Companies have a duty to their shareholders and they’re responding logically to the incentives in the system, Kennedy said. ‘Companies are strongly driven by the need to increase shareholder value, and especially any public company has to meet market expectations,’ he said.”
Read more in the full article here.
MacDailyNews Take: Those who strive to tax corporations only end up taxing themselves.
Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth. – Apple CEO Tim Cook, May 21, 2013
Related articles:
Intel CFO: Obama repatriation tax proposal ‘lipstick on a pig’ – February 4, 2015
U.S. Congress, Obama take Apple CEO Cook’s advice, eye corporate tax changes – February 3, 2015
Obama targets foreign profits with tax proposal, Republicans skeptical – February 2, 2015
Senator Rand Paul finds Democratic partner for tax repatriation holiday – January 30, 2015
Businesses hopeful Republican control of U.S. Congress will break tax-reform gridlock – November 5, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013
The whole corporate tax campaign is bullshit and the people who advance it are useless idiots in the service of greed.
Why should Joe/Jane Sixpack give a shit about some company’s corporate tax rate when the tax burden is steadily being shifted onto their back? Someone is going to pay the taxes and there are plenty of places to properly spend the money.
Funny how these companies are rah-rah American until it is time to pay a share of the costs of our public infrastructure, our security and common defense and other things that they benefit from every day. The truth is these companies have no loyalty to anything but their own greed- America be damned.
For all the ranting, the effective corporate tax rate in the United States is not high. The listed rate is high, but there are so many exemptions and loopholes that highly profitable companies like ExxonMobil get refunds from the IRS. I guess CNBC and the Murdoch Street Journal didn’t tell you that, now did they?
When it was time to bail out GM they were all Apple Pie and the Star Spangled Banner. When they got the TARP money and all the rest- they were so thankful that they built 6 new car plants OUTSIDE the United States even as they shuttered plants here.
The same is true of General Electric- also known of as the high church of Ayn Rand. When the failure of GE Capital threatened to take down the company, they were given an exemption to qualify as a financial institution and got TARP money and access to the Fed’s Discount Window. They were so thankful that they decided to shutter the whole GE Medical Division and move it to China- design, R&D and Manufacturing.
Unbridled capitalism is like a cancer- it will take and take until it kills it’s host.
If Apple wants to park profits overseas that is it’s legal right under current law. The EU has closed the Irish loophole and will be coming for a chunk of that money before long anyway.
I am a shareholder in Apple since 2001 and have no problem with them paying appropriate taxes. Apple is highly profitable with the current tax structure so why should anyone shed a tear?
The same is true of General Electric- also known of as the high church of Ayn Rand.
That’s a load of crap. GE is a pack of government dependents, exactly the kind of cronies that Rand denounced.
-jcr
Ms Rand died drawing Social Security and an Medicare with Lung Cancer. I guess that would make her one of the ‘takers’ she so despised. Randism is nonsense.
So, you’re saying she shouldn’t have taken her own money back from a scheme she was forced to pay into?
Try again, leftard.
-jcr
Do t go flinging names around. If you have nothing useful to say, don’t say anything.
The same is true of General Electric- also known of as the high church of Ayn Rand.
Really? No wonder I’ve hated GE all these years.
An example of an actual reason to hate GE:
You can thank crap GE engineering for the Fukushima nuke plant explosions and radiation leakage. GE knew about these problems before their nuke plants were even installed at Fukushima. GE: We condemn good things to death because we’re such bastards.
Apparently you lost me in your post?
Are you for, or against, Apple’s (and others) stance on reducing the tax rate to bring the money not earned in the United States to the United States?
Product manufactured and produced in China, sold in Europe and other countries somehow must pay a U.S. Tax in order to be brought to the U.S. in order to be used in the U.S.? Seems a little off to me.
So, anyone, and everyone who disagrees with you is a “useless idiot(s) in the service of greed?”
Are you one of those people who group everyone who disagrees with you into a single camp and refuse to dialog or get along with them, since they are useless? That is what is wrong with this country: “If you don’t agree with me, you are useless!”
This country used to be great. Now we have a whole plethora of people who think than anyone who disagrees with them is useless or needs to move to another country. Intolerance of other thought is at the core of democracy’s downfall. Don’t allow the other people’s thoughts to be heard. Division and hatred is rampant like we have not seen since the civil war.
Democracy used to be that two opposing mindsets could argue and go socialize together afterwards. But not now. Hatred looms! “You are useless.”
The opposite of “service of greed” is a free thinking society where those who have special talents or creativity or leadership, or productivity can get ahead because they have those abilities. They are rewarded. Take it away with taxes and more taxes and productivity and creativity decreaase dramatically. That is a fact of life in every country on the face of this earth. I live in a generational poverty county of about 25,000 people. The leadership tax and tax and refuse to give any tax considerations. Some local people have tried to pull factories and industry in. But no tax concessions and none will come. Several small companies re-located to outlying counties with tax concessions. Those counties are doing great, and car tags and property taxes are considerably less. Much Less jobless people there.
Your philosophy does NOT equal “quality of living increase” as you believe. Practicality and ideology clash at this point and when, where practicality is killed off, ideology creates a platform for decrease in quality of living, PERIOD! The sad point of this is that the only ones to receive any benefit from the decrease is a few elite leaders who tell you that the cause of your poverty or less quality of life is those who have money and hoard it, without referring to themselves!
DaveGreg, you noted “Unbridled capitalism is like a cancer- it will take and take until it kills it’s host.”
I respectfully submit to you that it is the unbridled taxes imposed by countries on their countries economy through all forms of fees, levys, licenses and taxes that have collapsed economies around the world.
It is not the merchants and builders of products who destroy countries.
We currently have all forms of US government costs exceeding half the output of the US being redistributed by government. How much higher does it go before the US collapses? Does it happen when the US takes 65% of all output? And if government knows what is good, then why not 75%? After all, the US government is only operating for the benefit of the citizens, is it not?
How much more taxes and higher unemployment must we endure before a form of major change at the ballot box, or is it already underway?
I am not a fan of profligate spending, but also think corporations should pay a fair share of taxes. Many do not.
I am taxed at every turn as someone who has long ago retired all my debts including higher ed and mortgage.
My objection is with this coordinated campaign to further shift the burden of taxation onto individual taxpayers by corporations. If you or I conspired to avoid taxation in a similar manner we would be arrested and thrown behind bars
Why blame the companies? They’re only doing what the law allows them to do. Politicians of both persuasions permitted this to happen. They’ve been fondled by K St. and Wall St., and they like it. Nothing is going to change until they’re removed from office. And that’s not likely to happen given the willingness of voters to send the same corrupt politicians to DC election after election.
Apple pays the highest USA tax rate of any large company. It paid 26.1% last year. GE? Zero percent.
Most other industrial countries have a rate of 25%. But there are fewer loopholes. I would be very happy, as a fairly large investor in Apple, to see that rate drop to 25%. I would also be happy to see GE pay that 25%.
As the government subtracts foreign taxes from what they rewuire for repatriated profits, the difference wouldn’t be too bad.
But, other countries don’t tax foreign earnings at all, so why should we?
Why are expatriate Americans treated like serfs by US tax policy? I always hear that we should pity the huge corporations but never hear anything about how American citizenship shackles you to the IRS like an incurable disease.
Try to get a bank account overseas right now. Dumbass US laws have made it so onerous that many/most foreign banks do not want Americans as customers.
Boehner and McConnell have the votes to change US tax law today. I do not see anything happening from the Republicans. Lots of nonsense and posturing for the cameras but not very much substance.
So, because our current system over taxes those individuals that succeed, you want to punish corporations that want to bring money earned outside of the U.S. into the U.S. to build infrastructure and jobs?
We are in a Lame Duck congress, regardless of whatever the house or senate put forth the administration is going to veto. Granted regardless of R’s, D’s, or I’s, all are lying anytime their mouths open.
No, a Lame Duck Congress is one that serves after an election that will replace the seated Congress. This Congress will not be a Lame Duck until after the 2016 November Election.
The Republicans asked for the keys and have them. It is on their head.
So please enlighten the rest of us, just how the current makeup of Congress could pass legislation that would not be vetoed by the current administration. And could overcome a veto without democrat support?
Or is it all Bush’s fault?
There are Democrats that would vote for an overhaul of tax policy. Many Dems serving in Congress are closer to the Republicans than Faux Newz and Rush would have you believe.
It is idiotic to charge anyone a tax to bring money INTO the country. Even a Keynesian should be able to see that.
-jcr
John, but for a true Marxist, it IS going to be wonderful. How?
It makes perfect sense to issue a Presidential Executive Order mandating that US corporations bring those excess idle funds back into the U.S. Just how such an order would work hasn’t been defined by Obama yet but he has floated the idea, as he is convinced himself he has totalitarian power at this point.
In fact both Biden and Obama have been hinting at this with Biden talking of “emancipation of wealth” as Joe said, without being clear about what he means, except to note that the concentration of wealth is not right according to Joe.
This is pure expropriation of assets we are talking about, like in 1000 years ago with Kings & tyrants. The day Obama does an executive order increasing taxes (unilateral expropriation) it will be the day the DOW drops 2-3000 points and the next recession starts.
But that’s OK under Obama’s Cloward-Pivens strategy.
For Apple’s sake, I hope that we do not see that happen as it will hurt everyone in this country, including all of us on MDN.
So? Bush and Cheney gave $16 trillion to Saudi Arabia.
Tflint, time to go back to school and learn to read.
Well said DavGreg.
Unfortunately the status quo will continue since none of the politicians have any balls to do anything about tax reform. Everyone is in each others pockets and the lobbyists will make sure that loopholes will remain.
We all clamor for a simplified tax system but those that will lose an advantage and have the power to influence will try their hardest to block any change.
Agreed. Please watch the videos of Apple speaking before the Senate subcommittee on taxation. Tim Cook and Rand Paul said it all.
Here is Rand Paul’s reprimand to his honorable (not) colleagues:
Asshole!
Do not post auto-play videos.
“Auto-Play” is actually stored in a cookie specific to YOUR YouTube account. I turned off ‘Auto-Play’ in my Google account, so it does NOT autoplay. I.E. thank Google. 😛
I remember when he said that. It made me proud once again that I supported his senate campaign.
BTW, I think it was his father that I first heard point out that corporations don’t pay taxes, people do. Corporations collect taxes, but the pain is always borne by their customers, employees, and shareholders.
-jcr
Taxes on profits are only borne by shareholders, if the company is profit maximizing.
Shame on all of these corporations. The tax w haven’t changed recently. They knew that the money they make overseas with be taxed, after getting relief or credit for taxes paid locally. It should not be a surprise to anybody. It some cases the company gets a tax break overseas and try to lie that they did not so they can scam both counts. We have major bankers, such as HSBC, who advise their privet and corporate customers on haw to cheat the taxman bouth at home and overseas. Cheating the Taxman is cheating your country.
Most Americans give far more money to the government than they’re required to by law. Why? Because most don’t know what the law says.
26 U.S. Code § 1 clearly states, “There is hereby imposed on the taxable income of…”
It doesn’t say “income”. It specifically says, “TAXABLE INCOME.” There’s a difference.
Even the Federal Registers agrees.
As late as 1953, the Federal Register clearly stated, “Exemptions; exclusions from gross income. Certain items of income are exempt from tax and may be excluded from gross income. These items, however, are exempt only to the extent and in the amount specified.”
Ready for this…
“No other items may be excluded from gross income except (a) those items of Income which are under the Constitution, not taxable by the Federal Government.”
Which items of Income do you think are exempt from Federal taxation under the Constitution?
Brush away the lies. Learn the truth. Start filing correct tax returns. You’ll truly be a whole lot happier.