“Large U.S. companies boosted their offshore earnings by 15 percent last year to a record $1.9 trillion, avoiding hefty tax bills by keeping the profits abroad, according to a new report,” Dena Aubin reports for Reuters.
“The overseas earnings stockpile has climbed by 70 percent over the past five years, said research firm Audit Analytics. Data in its report covers the Russell 3000 index of the largest U.S. corporations.,” Aubin reports. “U.S.-based multinationals do not have to pay U.S. corporate income tax on foreign earnings as long as the earnings do not enter the United States. Accounting rules also let the companies avoid recognizing a tax expense if management intends to keep the earnings indefinitely reinvested overseas… Conglomerate General Electric Co., had the most indefinitely reinvested overseas earnings, at about $108 billion, while drugmaker Pfizer Inc (PFE.N) was next with $73 billion, according to Audit Analytics.”
“Businesses have been lobbying Congress for a new law that would let them bring foreign profits home on a regular basis with little or no tax due, or for a one-time “tax holiday” on foreign earnings,” Aubin reports. “Some companies have been borrowing money in the U.S. bond market rather bring their overseas earnings home. Computer giant Apple Inc. last week raised $17 billion in a record U.S. bond sale to help fund its plan to return money to its shareholders. The bond sale let Apple avoid taxes that would have been due if it had used some of its $102 billion in foreign cash instead.”
Read more in the full article here.
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Come on, Greedy Corporations! Bring that money home for Obama to spend. You didn’t build this!
That’s right, these companies with billions upon billions in profits refuse to pay their fair share. Instead they rather support political candidates (republicans) that protect their profits and want to make the poor pay pay federal taxes and the middle class pay higher taxes so that these corporations don’t have too.
Think about that the next time you’re purchasing some electronic device to replace one that’s only a couple of years old, meanwhile wondering why your city has so many potholes or why new tolls have gone up where there none before.
1- Both parties have created the laws which allow this abuse. It has taken years to accumulate the $1.9 trillion overseas, and party control of Congress as well as the Presidency has changed many times. (BOTH parties are guilty of what you blame Republicans for.)
2- Potholes in your town probably aren’t filled with federal income tax dollars. Local governments rely very heavily on sales and property tax revenues.
It has been my experience that as a person votes (party) at the federal level, they also vote (party) the same at the local level. It is this same party, republicans that want to cut services to all but only cut taxes to the wealthy at the federal and local level.
All politics is local, as well as economies.
Is anyone else as tired of the phrase “fair share” as I am?
If Apple is breaking the law, then go after them. If they’re doing what the law says they can do – and, in this case, the law seems to say that they don’t have to pay taxes on certain monies – then what’s your beef?
Or is it that you’d prefer to focus on what profitable corporations do with THEIR money to distract from what the Federal Government does with OUR money?
“Is anyone else as tired of the phrase “fair share” as I am?”
Well, the wealthy sure aren’t, at least when it comes to asking the poor to pay their fair share of federal taxes so they don’t have too.
The poor do pay fed taxes, it is just returned later after they do their taxes. The republicans want to redefine poverty to 19th century standards. If you have electricity in your home, you’re not poor.
If Romney paid the highest tax rate of 39.5% instead of his 13.5% for the 14 million dollars he made one year, he would still be very wealthy.
If a poor person/family paid no taxes including sales tax, they would still be poor.
These are Global Corporations, not US Corporations. Their only tie to the US is the security provided by the military. They make Billions overseas exploiting slave labor while we foot the bill for their security.
Lies. Apple does not own slaves, nor do they exploit people. They have the best supply chain oversight in the Industry. They have identified issues and have or are making improvements continuously. Apple paid 28% effective tax last quarter. The US military does not provide security to Apple Stores or any other facility not on US Soil.
AC, aren’t you being a little short sighted. The chaos in the world if the US did not project it’s military might would not represent a conducive business environment for these “global” business to ply their goods. The damage to these businesses would be extensive.
Worse, Samdung and the rest of South Korea would be overrun by the North. We endure this even as they steal our IP and profit from it within our own markets.
Repatriating offshore funds would boost the economy.
Lower rates allow money to come home, higher rates keep funds overseas.
Punitive tax laws make no sense.
Can you and your sort PUH-LEASE resist using so many stories as a jumping off point for these kinds of comments?
Multinational corporations don’t give a rats ass about the United States. There is no more sense of patriotism anymore. Corporations and individuals will use a resource till they bleed it dry. This is the nature of the beast and capitalism. The United States is a tiny market compared to the global market as a whole. Times have changed and now corporations have more influence and power then governments. This is a new precedence of doing business in a global economy. Corporations are loyal to their cash and profits and not the nations they come from. Some would say this wrong but it’s within the law so it’s perfectly legal.
…and this is what the law REQUIRES of a corporation – fiduciary responsibility to the stockholders, as well as following the laws of the jurisdictions in which they do business.
If you want Apple to change its behavior, change the laws. Only be careful – the Law of Unintended Consequences will likely make the results of that change something even LESS desirable from your point of view.
(And for those who can’t resist asking why Apple doesn’t pay more taxes than they’re required to: if you’re not willing to show the rest of us YOUR voluntary donation to the Federal Government on your Form 1040, then shut up.)
A sad day in Apple history. Yes indeed.