“The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds, according to a study released on Tuesday,” David Alexander reports for Reuters.
“The study, by two left-leaning non-profit groups, found that nearly three-quarters of the firms on the Fortune 500 list of biggest American companies by gross revenue operate tax haven subsidiaries in countries like Bermuda, Ireland, Luxembourg and the Netherlands,” Alexander reports. “Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund used the companies’ own financial filings with the Securities and Exchange Commission to reach their conclusions. Technology firm Apple was holding $181.1 billion offshore, more than any other U.S. company, and would owe an estimated $59.2 billion in U.S. taxes if it tried to bring the money back to the United States from its three overseas tax havens, the study said.”
Alexander reports, “Fifty-seven of the companies disclosed that they would expect to pay a combined $184.4 billion in additional U.S. taxes if their profits were not held offshore.”
Read more in the full article here.
MacDailyNews Take: The usual notes apply:
• Tax avoidance is legal.
• 2015 U.S federal government spending totals $10.4109589 billion per day. The $184.4 billion in additional taxes extracted from the 57 companies discussed above would be gone in fewer than 18 days.
• As with U.S. federal spending, the U.S. corporate tax rate is far too high.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
SEE ALSO:
U.S. companies now have $2.1 trillion overseas to avoid corporate taxes – March 4, 2015
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
Defer, not avoid.
Apple paid the correct tax on that money in the country it was made in.
Not hidden not deferred.
Facts people.
Great.
and now that 59.2 billion in loss tax revenue must be made up by everyone else, or suffer the loss government services…. you know… like badly needed infrastructure repairs.. better paid police, firemen, and teachers…
connect the dots, people.
not that there is any guarantee congress would spend the money in such a necessary and useful way… but yeah, you basically got it right.
and no the taxes are not too high.
perhaps the batter perspective on taxes is not necessarily how high are they, but is the money being spent well.
you can spend it on weapons and war and corporate welfare, or you can spend it on rebuilding american infrastructure and improving education. and maybe even make health care more affordable.
“no the taxes are not too high”
Surely $59.2B in tax out of $181.1B is high!?
Since these profits were not generated in the US and mostly come as a product of foreign manufacturing I’m not sure the US is really that entitled to grab a large slice of them, just because Apple happens to based in the US.
That’s what Tim Cook is saying, many of Apple’s direct competitors based in many other countries wouldn’t be subjected to such large taxes just for bringing their foreign profits in.
No, but when the US infrastructure (including the military and State Department) supports Apple (and others) as a US company, as they should, they should also pay their portion of the bill.
Apple is the largest taxpayer in the USA.
it pays billions of dollars, all taxes owed on USA profits.
I think it’s paid its fair share of USA infrastructure.
But as a US company, the US will protect it’s worldwide assets!
Just why would you think that??
The USA has policed the world, starting with the Trinidad and Tobago affair immediately after the revolution. There is not a single country in the world that is not made more business-friendly to US corporations thanks to federal economic or military intervention. Not one. For decades now, the individual taxpayer is picking up the bill for corporate welfare.
must be made up by everyone else
Or just maybe, the federal government could try getting by on the highest revenues they’ve ever had.
Give me a fucking break.
-jcr
Whatever, Fauxahontas.
The government is not your mommy.
Better paid police, firemen and teachers, my ass.
The money would be blown on pensions and healthcare for federal layabouts, just like all of the trillions before it, you moron.
Or it could be blown on renewing your meds…
lol….they would just spend it on another war or give more of it to the deadbeats or pocket it some how. And I always like how its always Apple when all the other large companies do the same exact thing! Should be corporate america, not Apple!
Do you have money left after your taxes?
Well then you should pay MORE cause your not paying enough!!!
Jltnol,
Apple did not make that money in the United States of America. They made that money in multiple countries in the rest of the world. Apple paid the income taxes to the governments of the countries where they EARNED those revenues, every dollar, franc, pound, euro, Baht, Sen, Ruble, and Rial, etc. Why do you thing the US government is entitled to even a cent of taxation on that money? It has been taxed already. The US Government is one of only TWO countries in the world that taxes already taxed earnings in such a way. The other is a land-locked, backward country in Central Africa, whose name escapes me at the moment. Both countries are backwards in their taxation policies.
There is NO sane reason why the US should have any claim at all on those already taxed funds that are the rightful property of those companies.
So what’s their point?
These companies make money “outside” the USoA and they are NOT required to bring it back into the country. It’s called smart businesses. Anyone who has a global company that doesn’t do the same needs to a new CFO.
Instead of pointing out the companies that have money overseas maybe they should focus their attention on those who refuse to change the system. Obviously the people in charge don’t want to change the way it is now or they would. A whole lot of someones are getting their election pockets lined to keep things the same.
Tim’s comments are right on.
Yet, when I work in Europe for the summer, guess what? I HAVE to pay income tax to the US.
In fact I could stay in Europe and work for years, I would still owe the US government taxes.
Why is it ok for the largest recipients of welfare in the United States (Corporations) to avoid the tax, yet real people, aka: citizens must pay?
Because how else could we afford the massive loopholes and tax breaks that corporations get? “Corporations are more people than people, my friend.”
It’s you!! Set up a foreign company, have your pay go there, take a small stipend and the company owned your house food etc.
Legal and saves you money.
Let’s see… They have $181.1B offshore. If they want to bring it back tot he US, the US wants $59.2B out of the $181.1B!!
This is fair???
Look on this page at the upper right boxes. Is the ratio of private income tax revenue to corporate tax revenue fair?
http://www.usdebtclock.org
CTJ is mainly funded and run by the unions. Almost every board member is a union officer. That right there says it all.
If and when the tax laws are changed to either more equitably tax profits repatriated OR the laws are changed so that corporation are treated the same as individuals for tax purposes, of course this will continue. AND coporate management would be held accountable if they did anything differently if the laws are not changed. The BUCK actually stops at the legislative branch of the US government. Period. Interestingly, corporations are treated like persons apparently when it favors them – according to the current supreme court and its corporarte leaniong rulings, but not so for taxes. The resposnibilit rests entirely with the government.
Since tax avoidance is legal, anyone who seriously believes there would be $184.4 billion in additional taxes paid are either naive or delusional.
1 Companies used to pay US taxes on all profits
2 Companies lobbied congress so that, as long as the money stays overseas, they don’t have to pay tax on it (made sense at the time).
3 If a Company NEEDED to repatriate the money, they would pay the taxes upon repatriation (again, companies helped make the law, they thought this was best for them)
So, past American companies created the problem for current American companies.
There should be provision for these companies if they are going to create jobs in US give them the equivalent tax breaks. Maybe then these companies might set up ethical factories in US instead of depending on China.
US corporate tax rate could be negative and US corporations would still outsource manufacturing to the max. Why? Labor costs in developing countries undercuts — and always will undercut — those in a developed country. That’s why it’s long overdue to impose reasonable tariffs on imported goods produced in nations that employ no IP protection, no effective child labor laws, no environmental protection, etc.
But who are we fooling? Until we fire the corporate lapdogs in Congress from both corrupt parties, then corporations will continue to hoard money even though the end result is a bad economy and a crumbling infrastructure.
The Pinnacle of Extortion.
What part of read between the lines .!.. Don’t they understand?
What a cesspool this U.S. government has become.
OH! Don’t forget about the pathetic, LAZY, loser entitlement scumbags who live here (legally & illegally) in this once great nation too.
FCK THE SYSTEM. ALL OF IT.
Question??? Who is governing the government?
The corruption continues unabated.
Sad. iPiss in your general direction. You KKKKKAAANNNNNNIIIGETS.
The Capitol building needs to be bulldozed whilst ALL members are in session.
Carl-alt-del
Ah… One can only dream.
TOP 3 TAX PAYERS:
http://247wallst.com/special-report/2014/01/08/companies-paying-the-most-taxes/3/
Maybe the companies can repatriate the money if they made deals with congress to build/infrastructures, pay tuition or build schools, a decent transparent space program, or something good for the country with the tax money themselves.
Maybe they’d be more inclined to repatriate the money if they have a say in how it’s being spent.
The US tax system is out of sync with the rest of the world and needs to change with the growth of multinational companies.
http://businessroundtable.org/resources/it-regimes
Assuming MDN’s numbers are correct, I am sure there is no one on this board that would object to paying $10,500 per year for the roads and bridges they drive on. If you drive a minivan with two kids and a spouse you would only have a tax bill of $42,000 per year.
Gee, if you can afford an iPhone then what is all the whining about? pay your taxes, dammit.
Forcing corporations to pay taxes makes the corporations tax collectors for the government. Don’t you know corporations pay their taxes with YOUR money?
A very sad outcome for the people of America. Many of which were actually charged the taxes by Apple.
Hey stop picking on Apple; it’s not the only company who has business all around the world. You want to blame anybody go to the Republican congress who won’t bring it to vote unless will it will end National health care at the same time and nobody will pass it or and that includes the President desk.