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>You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollar
by criley2 10y ago
>You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country
They won't bring it back if they have to pay 15% on it.
We let them bring it back for 5% in 2004 and the result was a net loss to the taxpayer, if I remember correctly. https://www.wsj.com/articles/SB10001424052970203633104576623771022129888 https://www.wsj.com/articles/SB10001424052970203633104576623...
Businesses which repatriated money ended up shedding jobs and cutting R&D, which hurt all Americans outside of the Capitalist class. And the lost revenue from the tax break cost the taxpayer billions.
But, of course, the biggest reason to avoid this scheme is that it failed.
12 years after we did this scheme to bring back some $350 billion, these companies learned that we can be bent to their will, and now they've hoarded some $2,500 billion. Nearly 10X larger horde!
If we give in a second time, we reinforce this behavior that they can horde their money until enough useful idiots will give them anything they want to bring it back. Rinse, and repeat the next time enough useful idiots think that bribing you today will stop you from demanding the bribe again tomorrow.
- SilasX 10y agoHad it not happened, the US government would have gotten 0% of the money and their US operations would have been even more cash-starved.
- pdelbarba 10y agoYes, but the argument is that there would have been no showing of weakness that incentiveized corporations to hoard money for the next round.
- criley2 10y agoCash starved? These businesses are fine. They can borrow money domestically using the foreign horde as collateral. If they are cash starved, it's because they have no credit and no horde.
- dragonwriter 10y agoThe US operations aren't cash starved; they can repatriate unlimited funds for operations with no problem, since operations are all deductible expenses which would result in no tax hit from bringing the money back.
- sp332 10y agoWe let them bring it back for 5% in 2004 and the result was a net loss to the taxpayer, if I remember correctly. Well, 5% is probably too low. And I think they will bring it back for 15%. It costs money to maintain all these tax-minimization schemes globally. And America is still Apple's biggest market by far. Being able to leverage all that cash here could make a big difference to their bottom line.