The 5 U.S. companies with the biggest piles of overseas cash

“The Trump administration’s proposal to lower the corporate tax rate to 15% has revived hopes that big U.S. companies will soon be motivated to bring back massive overseas cash piles,” Ciara Linnane reports for MarketWatch. “”

“While the administration has not yet determined a rate at which those funds could be repatriated, Trump’s proposal unveiled Wednesday promises a ‘one-time tax on trillions of dollars held overseas,'” Linnane reports. “U.S. companies had about $1.3 trillion in cash held in overseas accounts at the end of 2016, according to Moody’s Investors Service.”

The following are the five companies with the biggest sums sitting overseas:

1. Apple has the most cash overseas of any U.S. company at about $230 billion, according to Moody’s Investors Service. Apple Chief Executive Tim Cook has said he would be willing to bring that money home if it were not subject to the current U.S. corporate tax rate of about 35%.

2. Microsoft: $113 billion.

3. Cisco: $62 billion.

4. Oracle: $52 billion.

5. Alphabet: $49 billion.

Read more in the full article here.

MacDailyNews Take: As we wrote yesterday, we’ll see where it all ends up (the corporate tax rate won’t end up being 15%, but it may end up being 20-25%, which is certainly better than the stifling 35% it is now).

As we’ve been saying for many years now, the U.S. corporate tax rate is way too high. Obviously.

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:
President Trump’s tax reform plan includes deep cuts in corporate taxes – April 26, 2017
Apple could be primed for profit explosion under President Trump’s big tax cut – April 26, 2017
Analyst: Apple could double dividend, buy Netflix with repatriated cash under President Trump’s U.S. corporate tax changes – March 17, 2017
Apple raises $10 billion in debt ahead of President Trump’s repatriation tax plans – February 3, 2017
After Apple’s blowout earnings, the Street looks toward ‘iPhone X’ and President Trump’s tax reforms – February 3, 2017
President-elect Trump’s corporate tax reform expected to have some positive impact on Apple EPS – January 14, 2017
Exploring Apple’s tax situation under U.S. President Donald Trump – November 21, 2016
Morgan Stanley: Apple stands to benefit the most from President Trump’s corporate tax plans – November 11, 2016
Apple and U.S. President-elect Trump: Can a tax cut for overseas cash heal wounds? – November 10, 2016
Donald Trump plan calls for cuts in corporate taxes, personal income tax rates – August 9, 2016
Barring a tax holiday, Apple will need to raise over $50 billion in debt the next 2 years – July 15, 2016
Cramer: Apple’s Tim Cook is ‘patriotic’ on taxes – December 21, 2015
Apple CEO Tim Cook is absolutely right – and wrong – on U.S. corporate tax policy – December 20, 2015
Apple CEO calls corporate tax rap ‘total political crap’ – December 18, 2015
Apple avoids $59.2 billion U.S. tax bill – October 7, 2015
U.S. companies now have $2.1 trillion overseas to avoid corporate taxes – March 4, 2015

21 Comments

  1. Attempting to translate from the garbled Trump-ease, it appears that the plan is to cut ALL corporate tax rates to 15%. That’s absurd to me. However, cutting the tax rate on foreign-made profits to 15% is clearly a brilliant idea. I wish they’d separate the two and make the benefits of bringing in foreign cash clear to those who don’t get it yet.

    1. In the one-page memo from yesterday, while they propose a 15% future corp tax rate, which presumably is a negotiable number, foreign income will be territorial. Thus, if you pay the foreign country’s tax, that’s it, no double taxation. That’s the way other countries do it, and what US companies complained about. They also said, existing foreign income, the rate is currently being negotiated. The various parties, House, Senate and Executive have since last year, proposed anywhere from 5 to 10%.

      While future foreign income, if territorial, means the US tax will be zero, the existing foreign income balances will be taxed, since it’s that tax revenue the gov’t wants to use for infrastructure repairs.

      1. The current system is mixed: both territorial and global. US companies do get a deduction based on what they have paid in taxes elsewhere, but still have to pay a tax.

      1. Do us a favor and post what the federal government collects from personal income taxes versus corporate income taxes. Corporations have been swindling the public for decades. The corruption and public deception is obvious.

      1. https://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/Average-Effective-Tax-Rates-2016.pdf

        After all the financial maneuvers, corporate taxation averages about 22% according to government statistics. They would know.

        What I would like to know is why anyone thinks the world would be better off by taxing corporations at absurdly low levels while doing nothing to reduce spending. Are individual taxpayers always supposed to be the most heavily taxed ????

  2. These poor poor companies desperately need a tax break. While they avoid the responsibility of citizenship while running roughshod over democratic processes with corrupt lobbyists and massive disinformation campaigns, can’t you see that you must suffer and they must have infinite wealth in order to be great? Ignore the fact that US headquartered corporations don’t give two shits about your freedom, your national debt, your crumbling infrastructure, or your increasingly unhealthy population? Won’t all you individual taxpayers please shoulder the entire burden of your accumulated national debt and increasingly expensive foreign wars? Modern Rome needs your sacrifices. To ensure the last gasp of glory, your executive buffoon, when he is not golfing, has promised slave wage jobs in the coal mines. Go and argue amongst yourselves while your middle class is decimated by your corporate feudal multinational corporate overlords. And enjoy the disposable plastic junk that distracts you, for the weak minded are easily fooled into the belief that consumerism is wealth.

  3. How can this president propose a massive tax realignment for the country without letting us know how he’d benefit from it personally? It’s a joke, really. Imagine if Obama had done this…

    Seriously, no estate tax? No alternative minimum tax (designed specifically so millionaires and billionaires pay SOME small percent of their income in taxes)? I want to know how much money this will put into the pocket of the Trump family (not to mention billionaires in general).

    1. No Trump release of tax returns…no tax cuts…simple. Period.

      We already know the tax plan he has proposed is tilted heavily towards the very rich.

      No release of tax returns is one reason why he will get zero Democratic votes for his plan…meaning, it can never pass the Senate as permanent. The best they will be able to do without any Democratic votes will be a tax cut for 10 years, but then ending after 10 years, like the Bush tax cuts.

  4. First, the key as Tim Cook eluded to is that any tax reform be revenue neutral, so as to not explode our deficit.

    Unfortunately the Trump tax plan would blow a huge hole in our deficit. It’s difficult to score now, since Trump as usual was so vague, but already estimates have his tax plan costing us about 3 to 7 trillion dollars over 10 years…yes, that’s right…TRILLION dollars.

    Most of that tax cut goes to the very wealthy…and so the middle class would be hit with the tax increase due to rising interest rates thanks to a skyrocketing debt, and all of the other economic problems that would create.

  5. I want the people tax money that Apple currently stashes overseas to be repatriated directly into infrastructure and social programs rather than go through Apple’s orifice to grubby, acquisitive investors on Wall St. to spend lavishly on their yacts and lavish McMansions.

  6. I lived overseas in the 70’s and at the time your US tax was first calculated and then you were given credit for your local tax. Because the local tax was above the US tax there was nothing for me to pay.

    I can’t see why that is not the approach to take now. if a company’s overseas taxes can be used to reduce the US tax payments due then companies should be willing to bring money back. Apple doesn’t need to be in a rush as they have sufficient funds here already.

    BTW, Apple has about a 25% effective tax rate – something Deadbeat Donald tends to forget. That 15% wet dream doesn’t address all the goodies in the tax code – like the oil companies getting a $4 Billion tax credit each year. That is $4 Billion in cash.

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