With next U.S. President, Apple’s cash may soon be on its way home

“Apple currently has an estimated $215 billion in cash held outside the borders of the United States. For years, this cash has been building up due to the company’s massive success in global sales,” Kumquat Research writes for Seeking Alpha. “However, U.S. tax law states that profits American-based corporations earn beyond the country’s borders are to be taxed at the U.S. corporate tax rate of 35% when those profits are brought back to the states, or repatriated.”

“Many companies think this is a unfair tax policy and so it has become common practice for large corporations to keep cash earned overseas ‘indefinitely reinvested’ to avoid paying the 35% tax. Apple’s cash pile accounts for close to 10% of the more than $2 trillion in profits U.S. corporations currently hold offshore, so repatriation tax reform that allows Apple to bring its cash home should be seen as a huge positive catalyst for AAPL shares should reform actually come to pass,” Kumquat Research writes. “Is this likely to happen anytime soon? I think it will.”

“Both presidential candidates Hillary Clinton and Donald Trump have proposed massive infrastructure spending on a scale that candidates haven’t proposed in a long while. Infrastructure has never been sexy, but now it has come into the spotlight as the crumbling nature of America’s roads, bridges, tunnels and other structures have become abundantly clear,” Kumquat Research writes. “Clinton has proposed $275 billion in infrastructure spending and Trump has proposed more than double that. How do they propose to pay for this spending? Trump has explicitly mentioned repatriation while Clinton has discussed business tax reform, likely an implicit reference to repatriation.”

It is the best interest of “both Democrats and Republicans in Congress, to get repatriation reform done as quickly as possible so that other countries cannot make claims to the overseas cash of corporations that would pay U.S. taxes if they weren’t so high,” Kumquat Research writes. “With this catalyst and the need for funds to spend on infrastructure, repatriation reform seems imminent. Once it happens, the influx of cash for Apple will be a huge boon for the company and stock as well.”

Read more in the full article here.

MacDailyNews Take: Again, if the EU demands so-called “back taxes” from Apple, it’ll be based invisible legal grounds since the company simply followed the law when paying their taxes:

There was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland. If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case. We’ve always been very transparent with the Irish government that we wanted to be a good corporate citizen… If countries change the tax laws, we will abide by the new laws and we will pay taxes according to those laws. – Apple CFO Luca Maestri

As we wrote back in April: Apple has repeatedly and confidently stated that they didn’t do anything that was against the law. Therefore, unless the EC tries to change the law retroactively, if that’s even possible, or tries to collect taxes retroactively in some other fashion, Apple is in the clear.

SEE ALSO:
U.S. government warns EU: Do not hit Apple with a massive back tax bill – or else – August 25, 2016
European Commission denies anti-U.S. bias after U.S. Treasury intervention over Apple, Amazon tax probes – August 25, 2016

79 Comments

        1. I really wanted Bernie to win. He was too clean and honest for the job, apparently.

          Despite decades of trying, nobody has brought any charges up against Hillary.

          Her sin is that she’s been effective in playing the political games just as any slimy politician does. But nothing worse than hypocritical pathological liars like the GOP leadership, and certainly nothing as tacky and immature as the crap Trump spouts daily.

          I know, everything is the fault of the leader. We should all personally blame Cook for the dumb ass mistake that one of Ive’s designers made when he moved the power button on the iPhone from the top to the side directly across from the volume buttons. We should all curse Cook personally for that.

          So it goes with all presidents and presidential candidates. Just as partisan assholes personally blamed FDR for Pearl Harbor, the same lunatic fringe assumes Clinton was personally involved in Libya. Do you really think any leader has that close attention to detail with real time impact? Not a chance. GWB was too stunned during story time to do ANYTHING at the time of the 9/11/2001 tragedy. Mid-level response was instant, but the president was mentally AWOL. The right wing was silent.

          Later GWB sends >5000 Americans to their death in an offensive retaliatory invasion of Iraq, and the right wing cheers. Under the Obama administration, Sasam Hussein is captured, the troops are mostly returned home, but 4 people die in an embassy due to lack of communication on the part of a mid-level bureaucrat, and the right wingers bring out he pitchforks for Hillary and Obama. Consistency? No, what we hear instead from paid partisan hacks like botvinnick and First-whatever is brainless attacks without any evidence of legal wrongdoing. Quick to judge the other side, zero admittance of failures for the home team.

          You may not like Hillary, but if you can’t bring evidence of lawbreaking, then STFU.

          Same goes for Trump critics. Everyone knows he’s a narrow-minded uneducated asshole. But in America, displaying ignorance and incivility is freedom.

          Now can we get back to Apple news please?

    1. The sooner the better, too. I am sick of paying the real costs of coal. The market price of coal is cheap, but the societal cost is higher than any form of energy. Start with the miners who suffer from black lung disease – not only have the coal companies systematically used doctors on their payroll to avoid paying claims (see https://www.publicintegrity.org/2013/10/29/13585/coal-industrys-go-law-firm-withheld-evidence-black-lung-expense-sick-miners ), think about what a black lung disease payment is – you get money that corresponds to the years of your life lost because of your (preventable) exposure to coal dust in the mines and processing facilities. And while you only get the benefit if you are totally disabled from your employment in the coal industry, you do are not eligible for any disability payments, long-term care etc. and every dollar you do get paid offsets your other federal benefits such as Social Security. Black lung disease has has been a cause or contributing factor in the death of more than 76,000 miners since 1968. Add in hundreds of electrocutions, crush injuries, mechanical entanglements, rollovers and whatnot to that total.

      At the mine site itself, there’s all kinds of environmental mayhem going on – streams being filled in and poisoned, entire mountaintops blasted off, strip mining, etc. and the supposed “reclamation” of the land leaves behind land completely unsuitable for any activity or ecosystem. They tried building a federal prison on one of these mountaintop removal sites (Big Sandy) – The $2 million project went over budget by close $40 million because the fill they built it on was so unstable, it caused all kinds of cracks and foundation problems. Our taxpayer dollars at work.

      Further, coal trucks routinely travel state and federal highways grossly overloaded, adding millions of dollars of road maintenance fees and expenses that the taxpayer picks up. And on the way to their delivery point, these poorly maintained and overweight trucks have killed hundreds of average folks who happened to be traveling on the same road. Their shattered lives, disabilities and whatever are all picked up by someone else.

      Coal-fired power plants are the most polluting energy source on the planet. The CO2 issue (anthropogenic climate change is settled science; dont even start) alone would be bad enough, but the average coal plant emits more radioactivity than a comparable nuclear plant, and spews mercury into the environment where it bioaccumulates. The air pollution alone causes or exacerbates hundreds of thousands of asthma cases each year and contributes annually to up 15,000 premature deaths in the US alone. All at no charge to the coal or power company who can freely pollute.

      Once you’re done burning the coal, you’re left with fly ash. Which by any definition of the term is hazardous waste but, thanks to coal company lobbyists, is exempt from those regulations. It’s dumped anywhere and everywhere – and every year or two a giant slurry pond wipes out another town or ecosystem with taxpayers or ratepayers picking up the tab. Uncovered piles of coal ash laden with heavy metals run off into our ecosystem, or just fly on the winds. Any number of towns, prisons, and more are on or adjacent to these piles with predictable health consequences, all picked up, again, by the taxpayer.

      If coal were taxed to cover the full societal impact it would more expensive than all other forms of energy by an order of magnitude. All that said, we do need a very small amount of anthracite coal for steel making and related activities, but using this stuff to supply energy is just a horrid and immoral choice.

        1. Ah, yes, once again, you are unable to provide a cogent response or rebuttal so you respond with name calling. Most of us figured out by fourth grade that means you have nothing valid to say.

          As to the first paragraph of your response, I never said get rid of fossil fuels – I said get rid of coal. As you repeatedly do on this forum, you are rebutting words that the previous commenter never said. To use the words of your idol, it’s sad, really sad.

          The US can easily dump coal today with a mix of natural gas, nuclear as well as renewables. Our reliance on coal has dropped to record-low levels in just a few years and all from market forces. In fact, the solar energy sector currently employs more people than coal, without endangering the public health in the process: http://fortune.com/2015/01/16/solar-jobs-report-2014/

          Solar energy has tremendous potential to supply a large fraction of our energy needs, but, of course, it needs to be part of a broad-based strategy that provides full-time demand and a diversified supply structure. My solar system draws from the grid at night (when natural gas and nuclear provide power), but during the day, I supply the grid with excess production.

            1. Once again, unable to rebut an argument. In my state, ZERO percent of electricity is produced from coal. ZERO. Explain why I should turn off my breaker box? I really don’t understand what you’re saying here. It’s sad, really, just sad.

            2. What is the argument? You seem unable to articulate one here. Again, you told me to turn off my breaker box because I oppose coal, which does not supply ANY electricity to me. Please, spell out for all of us what your proposed experiment would accomplish?

              More name calling, that’s just sad. Really sad.

            3. Wow, you’re illiterate, too. Read the graphs: California (our most populous state), Idaho, Maine, Rhode Island, and Vermont, with 8 more utilizing coal for less than 10% of their generation. In fact, that graph is old – Connecticut Delaware, New York, Massachusetts and Washington are currently 0%: http://www.eia.gov/state/search/#?1=101 Except for New Hampshire which is down to 80 pounds (yes, pounds) of coal for electric production, all of New England is coal-free.

            4. Your data is out of date from Q1 2014. My data is from June of 2016 and comes directly from U.S. Energy Information Administration

              Dude, you lost this argument. There are many states that have ZERO electric production from coal. Get over it and move on.

        1. Yes it will take time, but solar alone is already producing energy equivalent to dozens of conventional power plants.

          There are now at least six states with more than 1 GW of installed solar capacity. While most people think of Arizona, California and other sunny states as prime locations, even states like New Jersey have gotten in on this action – NJ has over 1.7 GW of capacity (approximately equal to 3-4 conventional plants and enough to supply well over 250,000 homes) and will double that within five years. That’s twice the install rate over the previous five year period. NJ currently is targeting to meet 24.5% of their electric energy needs with renewables by 2020 and many other states have similarly ambitious goals: http://www.ncsl.org/research/energy/renewable-portfolio-standards.aspx

          See also http://www.seia.org/research-resources/top-10-solar-states

          Obviously, renewables are not the only answer, but they can easily put coal to bed. Here’s another example of coal’s unpriced consequences borne by the public as well as the taxpayers: https://en.wikipedia.org/wiki/2014_Elk_River_chemical_spill

      1. West Virginia needs to get it’s head out of it’s ass and consign King Coal to the ash heap of history. With time and priper cleanup West Virginia could become a very attractive place for recreation, second homes and such. Colorado was once dependent upon mining but has transitioned away from it.

        Renewables are now as inexpensive as fossil fuels without subsidy. That said, the bigger challenge will be energy efficiency as the smount of natural resources needed and build rate for solar and wind with storage show it mistly a pipe dream. We need to get busy on distributed collection and backup due to climate change and pollution.

        Not a Hillary fan and definitely not a Trump supporter. Where is the reset button?

  1. and my personal favorite:
    “We came out of the White House not only dead-broke, but in debt. We had no money when we got there and we struggled to piece together the resources for mortgages, for houses, for Chelsea’s education. It was not easy.”

    – Hillary Merkel, June 9, 2014.

  2. “I certainly do remember that trip to Bosnia, and as Togo said, there was a saying around the White House that if a place was too small, too poor, or too dangerous, the President couldn’t go, so send the First Lady. And that’s where we went. And I remember landing under sniper fire. There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base. But it was a moment of great pride for me.”

    – Hillary Merkel, March 17, 2008

  3. Sadly those quotes are correct. The Democrat candidate should have been shamed out of running for the presidency. There is no shame for the shakedown artists that dominated that party for the past 50 years. JFK was the last good (except for the despicable womanizing) Democrat president because he was PRO-AMERICAN.

      1. As I mentioned before, a savvy businessman, or prince of the realm, is best advised, on his own account and on the part of his subjects, to adhere to the prevailing social hierarchy until the instant he can seize power.

        Machiavelli was wise, Cook is following his advice. The presidential election is a sideshow to what will later become clear is the main event.

          1. Trump could benefit from reading and understanding The Prince. In it, Macchiavelli counselled moderation when operating from a weakened position. Trump is in attack mode all the time and unwisely doubles down after a setback. Trump does not employ subtlety, perhaps because he hasn’t needed it in his prior career as a huckster and charlatan, but I doubt he knows the meaning of the word “moderation”, or appreciates its value in international negotiations, something I’d want from my leader. I do understand why you are supporting him over the Hildebeest. What is at stake is the stability of the republic and our individual liberties, which she would undermine. Am I right? — Prove to me how Trump would not do the same thing, or worse, and I’ll credit you.

    1. All that is true, and yet she is still a better choice than Trump. The Republicans really f’d up their chances this election cycle.

      BTW, the Republicans are also shakedown artists. The just shake down a different constituency.

        1. You are wasting your time with him. He’s a baby version of Trump with no money, but just as much hate, bigotry, racism, xenophobia, dishonesty and douchebaggery as his idol. No real conservative would consider voting for Trump despite Hillary. They will cost us the Senate and then you can listen to him cry like the bitch boy he really is.

          1. If you want to witness “just as much hate, bigotry, racism, xenophobia, dishonesty and douchebaggery” just be a Trump supporter and run the gauntlet of Leftist / Democratic Assholes who spew so much “hate, bigotry, racism, xenophobia, dishonesty and douchebaggery” that it’s not even funny, but extremely hypocritical for people like you to feel moral superiority in writing your lame ass post!

            http://video.startribune.com/dozens-protest-at-trump-fundraiser-in-minneapolis/390790951/

            1. A real Conservative?
              Herbert Hoover

              We all know how that worked out.

              NeoConservatives worship at thehigh chipurch of Ayn Rand. After a career of deriding government programs she rnded up drawing Social Security and being insured by Medicare. I guess that makes her a “taker”, whoch is anathema to NeoCons.

            2. Dude, we get it. You’re obviously being paid by the post. That’s 23 already today, at $5 a pop, not bad for a morning’s “work.”

            3. Nice try, I’m as “registered” as the next guy, just not wrapped in an (unauthorized) Yankees logo. So how much DO the message masters pay you per post?

            4. (I have to admit) you’re right about the bullet thing — I’m undocumented! Still, you’ve not yet denied that you’re being paid by the post. It’s a fact that a lot of dark campaign money if flowing into jamming public forums — are you one of the paid agents or not?

            5. Funny, the IQ test said I was, and the ASVAB, NMSQT and the ACT and the GRE.

              FDR fixed The Republican Depression he inherited from Hoover. Kind of like Obama inherited Dubya Bush’s Republican Recession.

              The DJIA was around 6,000 when Bush went back to Tejas and it is 18,000 now. Markets do better historically when Democrats are in office despite all the Republican noise about economics.

  4. More despicable that this country’s corporate tax laws, is the deficit spending/increase in the national debt that Obama undertook to “stimulate the economy”, when all he had to do is pass tax reform that would have allowed up to $2 Trillion held off shore to be repatriated.

    There are only 3 things corporations can do with its cash:
    1/ Pay employees (wages/bonuses) or shareholders (dividends) who then pay taxes.
    2/ Expand/upgrade facilities/equipment with the suppliers and their employees then paying taxes.
    3/ Deposit in banks thereby earning interest income and reducing interest paid on corporate loans, both actions increasing corporate profits and governmental tax revenue.

    Instead Obama let his socialist ideology override common sense and “stimulated” our economy with borrowed funds, further burdening the taxpayer with increased national debt.

    1. Everyone is talking about infrastructure spending. What I want to know is why we didn’t use all the QE’s (printing cash) to address infrastructure. In California, QE was used to keep excess union teachers on the dole a few extra years. What a waste.

    2. Congress writes and enacts laws. The President has no such power. Next time try to have some basic 6th grade social studies knowledge before you yap your pie hole. Try the birther crap next. You have much better odds of success with that garbage.

      1. The president signs the budget.
        The first budget Obama signed had an obscene $1.7 trillion deficit — four times as big as the previously biggest budget deficit.
        After that, the Democratically controlled Senate did not pass a budget as required by law for five years. A budget was not passed again until Republicans took control. Democrats were happy to continue with their blow-out budget. They had zero interest in controlling deficit spending.

        1. It’s been two generations since either US political party has shown any interest in balancing the budget or chipping away at the accumulated debt.

          I would be more circumspect about criticizing the president who reacted quickly to sign a BIPARTISAN bill in reaction to the greatest financial shock to hit in a generation, all of which was set in motion by prior deregulation pushed primarily by the greedy self-serving GOP. Like it or not, GWB’s legacy will be one of permanent war and the debt that came with it. Obama’s legacy will be one of salvaging the marketplace and then dealing with 7 more years of partisan GOP obstructionism.

  5. Don’t delude yourselves: if Hilary is elected there will be NO change in the current status of corporate tax. Think about it: she was at one point a part of the current administration. If she really thought that was important, she would have pushed for it. The status quo does not want this change OR THEY WOULD HAVE DONE IT ALREADY! It’s a “bait and switch”. They promise you the world and deliver nothing.

    That’s not to say Trump will do this (after all, Congress is the one that has to pass the law, not the president). But he’s more likely to get it done.

    Wake up and smell the roses people. There is no democracy in America. It’s a country completely controlled by special interests via lobbyists. The only truly sad part about that is that there is no lobby for the American people.

  6. It is obvious the U. S. government is short on its war chest. It cannot extract any more from the citizens so it is going after companies like Apple to chip in by changing the laws to force the Apples of the world to pay that tax even though the money is still overseas.

    1. I believe you’ll find that’s the way it was. A long time ago, companies that were making most of their money in the US were being taxed US rates plus whatever the other country was charging. Those companies lobbied to have the laws changed so they were only taxed on that money IF they brought it back to the US. Shortsighted, yes, but the law we have now is the one US companies wanted. They didn’t foresee a time when they’d make THAT much more over operating costs overseas.

      I actually wonder why congress in it’s current state wouldn’t be able to pass another bill, like the Jobs creation bill in 2004 to lower the repatriation rate below the 5.25% it is now?

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