Apple will eventually bring billions of dollars back to the U.S. under President Trump’s tax reform plan

“When tax reform is finally discussed, a cash repatriation holiday will be a priority second only to corporate tax cuts” Stephen Guilfoyle writes for TheStreet. “More than $1 trillion is held overseas by the 50 U.S. companies that have hoarded the most cash abroad. Who headlines this list? Only the likes of Apple, Microsoft, Alphabet, Oracle and many others.”

“Tech names all? Well, at least half of all that dough, anyway. To avoid oversized domestic taxes, these firms have left their profits in place where they were earned, and funded capital expenses through the debt markets. That’s where your buybacks and dividends have come from,” Guilfoyle writes. “Taking more than a 30% haircut on profits… and Tim Cook figures it’s more like 40% after state taxes are factored in, just makes no sense. So cash builds, and velocity slows. Remedy this, and these stocks will continue to outperform. You get the gist. The Trump administration has asked for a 10% repatriation holiday. A rate higher than that may just support the status quo.”

“Someday that cash comes home,” Guilfoyle writes. “Someday may seem like a long way off. I want to be long this space on that day, but that’s just me.”

Read more in the full article here.

MacDailyNews Take: As we wrote back in April: “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

50 Comments

  1. I don’t think this is a priority for Trump. His priority is construction & building, and removing sanctions on Russia related to oil drilling. He has no interests in these technology companies (I mean no investments or opportunities to make money off of them) so this initiative will continue to be just rhetoric.

    If Trump were smart (and we know he’s only ruthless) he would have made this his first major initiative as president. It would have been a relatively easy win for him and a confidence builder for the country. Instead he chose to go after Muslims, piss off our long standing allies in NATO, reject the Paris agreement, etc. For a businessman, he sure missed an obvious opportunity to score quickly. Don’t hold your breath that repatriation will ever happen. Sad.

    1. There’s a huge roadblock in the way of tax reform: The ObamaCare boondoggle. It’s collapsing and it’s a money pit and the leeches are already dependent on yet another entitlement, just as the now-regional Democrat Party planned when they rammed it through even though Republicans told them it would spiral rapidly out of control. The Democrats don’t care as creating dependency on government handouts is the only way they can get votes. Now the debate is how to kill the Obamacare failure as painlessly as possible or whether to excise this economy-killing Anti-American cancer outright.

      1. The only roadblocks to healthcare reform are mcconnell and trump, both incompetent actors who have no understanding of health and no interest in reducing the actual costs of healthcare. They are happy to allow insurance legal pharma and equipment industries to rape pillage and plunder while food companies push sugar and fat and alcohol at increasingly obese Americans. Neither can even explain a single aspect of their supposed replacement plans that would reduce costs of anything. That would require some large corporations to take a profit cut. Exactly the opposite of what these schmucks stand for. Clueless Trump is over his head.

        Has Trump proposed a ~ $5 Trillion budget reduction to offset the revenue loss that his proposed gift to millionaires and rich corporations would cause?

        No, Trump proposes to buoy military spending on the nation’s already unhealthy credit card.

        You and botty are truly delusional.

      2. -First all the ACA is not a boondoggle. It has accomplished already much of what it promised and has markedly improved the health of tens of millions of Americans, it has improved the availability of broad healthcare to rural, remote and undeserved urban areas and it has slowed the inflation rate of healthcare costs in both coverage financed by the public and private sector.

        -Second, the only failure has been the Republican House and now Senate that have intentionally underfunded the portions of the program that protect insurers from losses in high claim areas. This is a short term situation as millions of previously uninsured or underinsured get caught up in the healthcare system. The Republicans have been intentionally underfunding it hoping to provide a fiscal crisis. This would d be like you intentionally underinflating a tire and then bitching when it blows out early and claiming it was flawed.

        The ACA is not what I would have preferred, but it has made a significant impact on the health of tens of millions of our fellow citizens and incidentally – a huge number of Red State working poor (Trump Voters).

        It is funny how there is always money to bail out banks or buy fighter jets we do not need, but never enough to take care of our people in Republicanland.

      3. Nah, let’s call a spade a spade. The roadblock are those Republicans that don’t support Trump. Even AFTER success at the polls last year they are wavering in what they need to do for America… concerned about their jobs more than the future of the country.

        So what if Republicans in your town hall have bought into wanting to maintain the handout? If you had courage in your convictions, you would know that things will be better if you do the right thing. You do it, stick to it, and and get it done. There is ABSOLUTELY NOTHING preventing repeal other than weak stomached conservatives that are starting to look a WHOLE lot like liberals at this point. Wringing their hands over this and that detail instead of looking at the big picture.

        The repeal and the repatriation were so BRAIN DEAD easy to get done… If it’s not done in the next couple months, we’ll likely be stuck with this situation. Hopefully, after another win at the voting booths, republicans in congress will find the fire that gets things done.

        1. Not bloody likely. There is no republican party anymore. Not a one in office now is fiscally responsible nor are they using wise business concepts to drive government efficiency. Under republican leadership, the debt has grown faster than under democrat congresses. The democrats at least waste money on domestic largesse. Republicans, once supporters of domestic industry, now reward their multinational corporate handlers which park their ill gotten profits in foreign tax havens. If you can’t see this, you must be distracted by the idiot in chief’s pointless fact free Twitter feed and the Breibart russian propaganda campaign. Misdirection works against the small minded.

        2. What are the chances that the same folks that couldn’t pull together on healthcare legislation will be able to get anything else done? The repatriation effort is down the tubes, and Obama care is the law of the land. We’ve got majorities everywhere! I suppose that doesn’t count for anything.

    2. I guess now with Trump officials testing out the waters if he can pardon himself he won’t be around much longer for any of his “initiatives”.

    3. His biggest concern right now is keeping his ass out of jail.

      The day they haul his fat ass out in cuff to Club Fed will be a great day for America. The Gang Of Perverts put the first Speaker of the House in Jail for covering up his sexual predation of kids while a wrestling coach back in the day. I guess that means we can move on to Agent Orange in an Orange Jump Suit at SuperMax where all traitors should go.

  2. 15%….bet on it. It may take until after the 2018 midterm massacre of the Plantation Party, but it will get done and so will the Sovereignty Wall.

    MAGA

          1. @ Botvinnik.
            I have a question. We know you love Trump and hate Democrats. But given the issue now with McCain’s cancer and given that EVERYONE regardless of political leanings, respects him and his humanity. Even here in Canada, Liberals greatly respect this man, a genuine war hero.
            My question is: didn’t you feel just a little bit of shame when your leader (Trump) called him a loser and not a war hero; denigrating him by saying that he shouldn’t have gotten caught? Just a tiny amount of shame deep down in your heart?
            If not, then it is clear you are not normal and that you are composed of the stuff that I scrape off the bottom of my shoes when I walk my dog in a dog park.

            1. As I suspected. Self-centered a-hole. America is crumbling and it is due to idiots like you who hide behind a keyboard. I am sure you were a disappointment to your parents.

            2. “America is crumbling…”

              bullshit.

              America is coming back, bigger and better than ever, you goddamned “you didn’t build that” shit-for-brains loser.

            3. • “Boom: Mining +21.6% in Q1; Construction +5.6%; Manufacturing +4.7%; Bust: Finance and Insurance -2.1%”
              http://www.cnsnews.com/news/article/terence-p-jeffrey/boom-mining-216-q1-construction-56-manufacturing-47-bust-finance-and
              • “Food Stamp Use Falls to Lowest Level in Seven Years”
              http://www.breitbart.com/big-government/2017/07/20/food-stamp-use-falls-lowest-level-seven-years/
              • “BROKE: New FEC Report Shows DNC Finished June $3.3 Million in Debt”
              http://www.thegatewaypundit.com/2017/07/rough-financial-shape-new-fec-report-shows-dnc-finished-june-3-3-million-debt/

            4. Breitbart? CNSNews? Gateway pundit? You are kidding right? No wonder you are so messed up. Trump takes about fake news, well….in spite of the lipstick they kinda look like a pig to me.
              Anyway, we are off topic will your moronic reading habits. Yes, when people are ok with Trumps sexual flaws, that he is an embarrassment to every country he visits, that is why America is crumbling. People like John McCain could help right a wrong but I will let the impeachment hearings fix that instead. It won’t be long now. Hope you don’t get a stroke from it.
              Did I mention that I am sure you were a BIG disappointment to your parents and that is probably the cause behind your nasty, spittle-spewing baloney you spout on a regular basis.
              Time for your Prozac…….

            5. None of anything that’s now working has anything to do with Trump, because the policies that have made that happen are still those of President Obama. Once the policies that Trump is working on, along with his executive orders come into play, later this year, we’ll see how it goes.

        1. hardly….this isn’t Watergate and Trump is not Nixon. The Plantation Party and its minions within the legacy media have been exposed as liars, cheats, thieves and felons.

          1. I am not a Democrat and did not vote for either Trump or Clinton. This is not Red Pill versus Blue Pill so you can check that shit at the door. This is about Obstruction of Justice.

            Trump is dirty and he knows it. Mueller is a straight arrow and a Republican by the way. Mueller is a decorated Vietnam War vet Marine (Bronze Star with Valor Device and a Purple Heart) and also completed US Army Airborne School and Ranger School before deployment to Vietnam, so he is not scared of Agent Orange who never served anything but himself.

            Like all New York Developers he is all mobbed up and he personally has been using alternative financing thanks to his repeated bankruptcy filings. Some of that money came from Bailout Baby Deutsche Bank but some came from Chinese and Russian Oligarchs.

            Trump, like Hillary Clinton, thinks laws and rules are for the little people. Apparently like Nixon, he thinks if the President does it, it is OK (wrong answer).

            I only ask a few things of our President:
            1-They actually be the choice of the American people.
            2-They act as they see fit in the national interest.
            3-Thet not be corrupt, loyal to foreign agents or governments or subject to blackmail.
            4-That they not be mentally incompetent or crazy.

            He fails on at least 3 of those and possibly all 4.

            1. 1. The Electoral College, constitutionally, has elected every president since the country’s inception.
              2. The Trump Administration’s every move, EO, military expenditure, tax plan, etc, etc, has been AMERICA FIRST.
              3. There has been ZERO evidence of Russian/Trump collusion in 18 months, while The Clot gets away with selling American uranium to the Russians.
              4. Donald Trump has outsmarted and beat all 16 Republican candidates and the whore The Plantation Party nominated.

            2. Sorry, but it’s Trump who is the whore. He bought three trophy wives. They never would have looked at him if he didn’t throw money at them first. Two were smart enough to divorce him. The dumb one has stayed.

            3. With enough gerrymandering, corrupt campaign financing and crony capitalism, a good dose of russian propaganda, and willfully ignorant political attack dogs like bottvinnik attempting to drown out any intelligent collaboration, idiocracy has arrived in the USA.

              I don’t blame the founding fathers, but the constitution completely underestimates the level of corruption that corporations and their lapdog political parties would have. Not to mention the technological means by which the citizens could be duped.

          2. You’re right! It’s worse than Nixon. In fact the White House counselor for the Bush jr. administration just said that if what happened with Trump Jr. and Kushner had happened during the Bush administration, they would have been arrested, and put on trial for treason, even if were to help the Bush campaign.

            If Trump tries to get the Justice Department to fire Mueller, there will either be resignations or firings. Even the Republican Senate would not approve a replacement for Attorney
            General who would fire him, and Trump can’t do that directly. If somehow he did something that seemed to, he would be reappointed by both houses in a position the ‘president couldn’t influence, with greater powers to investigate, and to recommend arrests.

            The firing of officials in the JD, would force the house to recommend impeachment, as that would be an attempt to influence a criminal and national security investigation. That’s one thing they got Nixon on. After the trial in the Senate, if Trymp doesn’t resign, he can then be prosecuted for the crimes he was impeached for, as well as others. His family members who were involved, and others, could be tried before impeachment.

            You think this isnt a problem? Well, you better think again, as it’s republican lawyers who are talking about it.

  3. Both candidates knew of the opportunity and both said they were going to allow corporations to bring back their profits at a lower tax rate. Hillary said it repeatedly. It was always a part of both candidate’s infrastructure plans.

    So, please, stop with it being Trump’s plan. The guy is clueless about most things. And what makes it far worse, he’s an anti-American crook being manipulated by Russian business interests.

  4. Last year, Tim Cook felt confident Apple would be able to bring back its cash this year. He believed the tax reforms would happen this year. I had my hopes up last year. It doesn’t seem very likely and I have given up on any tax reforms happening in 2017. As long as Apple can’t touch that cash, Apple is going to remain range-bound in terms of share price gains. That cash pile might as well be on the moon.

    1. “President Barack Obama had three press secretaries during his eight years in the White House. The Obama press secretaries were Robert Gibbs, Jay Carney and Josh Earnest.”

      big deal.

          1. Who said it was? Not I. Three is more than one. Here is some more interesting math: Obama had three press secretaries in about 96 months (for an average of 32 months per press secretary), while Trumpy will be on his second in only 6 months! Now, THAT is some cool math for you!

            At this rate, with a shelf-life of six months or less, just imagine how many GREAT press secretaries Trumpy will have in the course of one unbelievable, amazing, SO beautiful term! Gotta be at LEAST 8, right? Right?

            WINNING!!!

  5. To pay for Obamacare, in 8 yrs, my health insurance costs for family of three went from $350 a month to 1,300 a month.
    Obama raped the working middle class to give young voters insurance, and they still didn’t buy it. It was stupid from day one. And, by the way, I have always been insured with a pre-existing condition as a type 1 Diabetic. They lied to the public and raped the working middle class…wonder why they lost the election? It killed competitive pricing for premiums…it was a toilet spiral from day 1. Dems forced it out the door and claimed millions could now be insured with pre-existing conditions. All they did was re-distribute the money to their voters at the expense of working middle class.
    Keep in mind that so far the GOP’s failure is that their bill didn’t do enough to fix the Obamacrap and several senators stood firm even though it may cost them their job. One size fits all states is the other reason it hasn’t passed. Every state is different.

    1. “If you like your insurance, you can keep your insurance…” – President Barack Hussein Obama…..

      I have a copy of my insurance cancellation letter…..

  6. I’ve been saying this for awhile (each time people comment and tell me how wrong I am usually with some kind of insult to my intelligence), BUT the LEFT is GOING TO IMPEACH the PRESIDENT, and the confidence in the stock market from Trump is going to VANISH. It’s will likely be a mini-crash. Sell before it happens. That’s my opinion, and obviously I could be wrong, but..I give it 90% chance.

    1. The left is not going to and cannot impeach the President. Republicans own the White House, the Senate and Congress. If ANYONE impeaches the President, it will be Republicans because the Democrats don’t have the power to impeach a damn thing.

      And you think there’s a 90% chance that Republicans will impeach a Republican President? You’re delusional.

    2. No, it will be the Republican House that recommends impeachment, and the Republican Senate that conducts the trial. Unless he resigns as Nixon did.

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