“Apple has faced mounting criticism in recent years for avoiding taxes in the US and Europe. Wednesday, it offered critics 38 billion replies,” Klint Finley writes for Wired. “More precisely, Apple said it would pay an estimated $38 billion in tax to bring back to the US some of the cash it has stashed overseas over the years. Apple says the payment would be the largest tax payment of its type in history. But it’s also a pretty good deal for the company.”
“Under the new tax plan, Apple and other companies must pay taxes on foreign profits parked overseas. Companies aren’t required to actually move those funds back to the US, but there’s little reason for Apple to keep its cash abroad once it’s paid the tax, says Edward Kleinbard of the University of Southern California Gould School of Law,” Finley writes. “Previously, the US allowed companies to defer paying taxes on foreign profits until those profits were repatriated. So many companies, including Apple, opted to leave foreign profits overseas. As a result, companies accumulated a total of around $2.8 trillion in overseas holdings, research firm Audit Analytics estimates.”
“Had Apple decided to bring all of its overseas cash back to the US last year, it would have paid a tax rate of 35 percent, about $88.3 billion, minus the taxes paid to foreign governments,” Finley writes. “Although Apple is getting off easy with a tax bill of ‘only’ $38 billion, Kleinbard thinks the company’s effective tax rate will be a bit higher in the future…”
Read more in the full article here.
MacDailyNews Take: The importance of the U.S. finally moving to a territorial system cannot be overstated.
SEE ALSO:
‘We want to help America,’ Apple CEO Tim Cook says of moving foreign money back to the U.S. – January 18, 2018
Apple to build new U.S. campus, pay record $38 billion repatriation tax – January 18, 2018
Apple gives employees $2,500 bonuses after President Trump signed the GOP’s Tax Cuts and Jobs Act – January 17, 2018
Looks like Apple is bringing nearly all of its $250 billion foreign cash back home to America – January 17, 2018
Apple plans to add $350 billion to U.S. economy and create over 20,000 new jobs over next 5 years, pay $38 billion in repatriated taxes, the largest ever made – January 17, 2018
Stock market optimism from pros reaches highest level in nearly 32 years – January 17, 2018
Apple expected to issue less debt in 2018 now that President Trump has signed the Tax Cuts and Jobs Act – January 16, 2018
U.S Treasury: 90% of U.S. workers likely to see more money in take-home pay next month – January 13, 2018
U.S. sees strongest holiday sales since 2010 – January 12, 2018
Dow, S&P 500 and Nasdaq rocket to new all-time records – January 11, 2018
S&P 500 and Nasdaq rise to records on first trading day of 2018 – January 2, 2018
Apple makes Trump-friendly investment in Finisar – December 13, 2017
Apple is backing up iPhone X’s Face ID and AirPods with American jobs – December 13, 2017
How Apple and Finisar are transforming the future of Sherman, Texas – December 13, 2017
Apple awards $390 million to VCSEL-maker Finisar; award will create 500 high-skill jobs at Sherman, Texas facility – December 13, 2017
U.S. employment jumps more than expected in November, boosts U.S. stocks – December 8, 2017
U.S. third-quarter GDP revised to three-year high of 3.3% – November 29, 2017
Goldman Sachs sees U.S. unemployment rate hitting lowest level since the late-1960s – November 20, 2017
American consumer confidence soars to highest level since December 2000 – October 31, 2017
U.S. jobless claims plunge to lowest level since 1973 – October 19, 2017
U.S. economy picks up steam; second-quarter GDP up 3.0% reflecting robust consumer spending and strong business investment – August 30, 2017
U.S. consumer confidence shows Americans upbeat on jobs, economy – July 25, 2017
Corning shares boosted by Apple’s $200 million investment – May 15, 2017
Apple’s billion-dollar advanced manufacturing investment is a blueprint for U.S. job growth – May 4, 2017
Apple to invest $1 billion to promote manufacturing jobs in the U.S. – May 4, 2017
Apple’s top manufacturing partner to meet with U.S. President Trump today – April 27, 2017
““Apple has faced mounting criticism in recent years for avoiding taxes in the US and Europe. Wednesday, it offered critics 38 billion replies,””
Thanks to the GOP massive tax cuts on the rich and corporations. This in turn adds trillions to the debt; which soon the GOP will be looking at cutting SS and MC.
Ok, so how does having a 15.5% tax on $250 billion, as compared to 35% on $0, make things worse?
This is actually a good aspect of the bill. Too bad they had to add $1.4 trillion in debt on top of that.
Time for some thoughtful questions about the flow of money.
So which helps the US debt situation more, money fed into the US economy or money excluded from the US economy?
Which helps fuel national economic health, money fed into the US economy or money excluded from the US economy?
All too often we send our money away to other countries. That leads to less wealth here. Apple found a way to get money from people in other countries but our foolish tax policies have strongly discouraged that money from coming back to the US.
Does it benefit the rich? Absolutely. Does it benefit ordinary people too? Absolutely but to a different degree. The fact is, the rich will always have ways to keep and increase their wealth. Their benefit doesn’t automatically mean that most people then get cheated.
A bit simplistic don’t you think?
What large companies, including those run by Trump, operate only within the USA? They all launder money through low tax havens and will continue to do so since the USA cannot maintain its infrastructure at the absurd 1.5% income tax rate that tax havens like Ireland offered select companies. Sorry small businesses, you lose. Again.
“Which helps fuel national economic health, money fed into the US economy or money excluded from the US economy?”
Taxes are income to the state. It uses this money to take care of the business of the state. When that income (taxes) is reduced either by destroying a local economic base by moving jobs overseas or giving unwarranted tax cuts to the rich and corporations, the state looses income. Yet it’s current and future expenditures remains.
In both these scenarios,the state looses income creating an unstable economy.