7 ms·

Jamie's right. Imagine how much benefit the US could get if Apple was able to repatriate its hundreds billions in overseas profits without losing over half to t

Jamie's right. Imagine how much benefit the US could get if Apple was able to repatriate its hundreds billions in overseas profits without losing over half to taxes.

greydius 9y ago
Would the US not also benefit if Apple just paid the taxes?
- sosa2k 9y ago
  Apple, and many other companies, are not going to "just pay" billions in taxes.
  - recursive 9y ago
    And by a similar token, they're also not "just going to be able" to repatriate that money tax-free.
  - pasquinelli 9y ago
    No one's going to "just pay" any amount of taxes, they have to be forced. No matter what else you think about taxes, that's how they work. Paying taxes is always painful; not paying is made to be more painful, at least for some of us.
    - eplanit 9y ago
      "...at least for some of us" it's made to be painful for most every single one of us who aren't mega-companies with an army of lawyers and accountants. This is one reason I go almost blind rolling my eyes when a CEO of such a company gets all preachy about right and wrong, and what's in the public's interest, etc.
  - deleted 9y ago
    [deleted]
  - guelo 9y ago
    It would be foolish to pay the taxes when they can lobby the public and the government for years until they get their way.
    - valuearb 9y ago
      It's foolish to tax capital investment in the U.S. It's like punishing people for working.
- lucozade 9y ago
  Doubt it. The taxes aren't owed to the US.
- valuearb 9y ago
  they don't owe more taxes (profits already taxed in countries where they were earned) unless they choose to repatriate.
Avshalom 9y ago
Well if they invested it in R&D, raises, construction etc. then it wouldn't be profits and wouldn't be taxed. If they don't invest it directly it would just sit in a cloud of accounts, stocks, bonds etc. doing nothing but adding a fraction of a fraction to the liquidity of the market, but it's already doing that from whatever banks it's already in. So, no actually, not really sure how much the benefit the US could get.
- georgeecollins 9y ago
  Holding money in a foreign account doesn't restrict Apple's spending on R&D in any important way. Apple holds stock in foreign accounts and issues bonds. They have plenty of cash to fund R&D anywhere and if they didn't they can issue bonds. This is like the argument: if I can balance my checkbook, why can't the government. Governments and modern corporations don't work like your checkbook account.
- valuearb 9y ago
  Allowing repatriation would bring at least $2 trillion in capital back into the U.S. These are profits earned overseas, and trapped there because you lose half of them to taxes if you try to bring them back to the U.S. Bringing it back means a tidal wave of dividends and increases in bank capital, which are reinvested and lent to US businesses to make them more productive and create better jobs. If you really think that money sitting in bank accounts, stocks and bonds does nothing, you simply don't understand anything about the economy. Doing it the U.S. instead of Ireland or the EU is a big deal.
  - DrScump 9y ago
    These are profits earned overseas These are profits earned worldwide which have largely been laundered overseas (e.g. the infamous "Double Irish").
malchow 9y ago
Exactly. It's a highly competitive world & it's hard to imagine how long we can continue with "1970s" style government: a decade to approve new bridges, out of control public unions, confiscatory tax rates, NYC subway costs $2B per mile, F-35 now $406B, and so forth. It feels as though the gears, laden with barnacles, are grinding, grinding, grinding to an eventual halt. At one point in this exchange the reporter says: "So are you expressing frustration with President Trump?" Jamie replies: "No, I am expressing frustration with you!"
dsparkman 9y ago
Would the repatriation mean more US jobs as a result? Doubtful. Apple, et al. would not suddenly do on a hiring binge. They would also not suddenly start paying their employees more or provide better benefits. This is a red herring that politicians love to try and justify huge tax rate cuts for businesses that are unnecessary but provide a good sound bite. Tax rate cuts that they already enjoy because the US government allows them to stash the cash overseas already to avoid the taxes. A US citizen is forced to pay income tax on all income worldwide. Live in France, pay French taxes and US income tax on income over $72,000. And you only get the $72k break if you are in the country less than 30 days in a calendar year. US corporations, on the other hand, can stash all overseas earning overseas to reduce their tax liability. Most US corporations already pay a lower effective tax rate than most US citizens.
- dsparkman 9y ago
  One more quick point. US banks would love to have all that cash repatriated. It for every $1 that Apple et al. deposits into their bank they create $10 of new currency that they can loan out.
- thinkcontext 9y ago
  There's no shortage of cash to invest now in the US, they are instead most likely to use the cash for stock buybacks and dividends.
- valuearb 9y ago
  Apple would dividend most of the profits to hundreds of thousands of investors. Those investors will often reinvest those dividends to or leave them in the bank, both of which drive capital investment in the US, higher productivity and creates better jobs. The US corporate tax rate is one of the highest in the world, making the US one of the most costly places to invest. Taxing investment instead of consumption is directly lowering our standard of living. The fact that our taxe rates on individuals working overseas is stupid too doesn't mean we should fix the corporate tax rates. In fact corporate tax rates should be zero, as you don't want to tax reinvested capital, and if profits aren't reinvested they are paid as dividends, and you can tax dividends at ordinary income rates to restore progressively to our tax system.
nihonde 9y ago
'Repatriation' is a nice doublespeak for money earned in foreign countries being coerced into US tax coffers.
guelo 9y ago
Taxes are not completely useless.
grasshopperpurp 9y ago
Can you please explain how this differs from trickle-down economics?
- WkndTriathlete 9y ago
  Instead of resorting to hyperbole, look at it this way: $2 trillion is parked overseas. It is parked overseas because the opportunity cost of bringing it back here is higher than leaving it overseas, mostly due to corporate tax rates that are higher than they are overseas. We can leave tax rates as they are and gain $0, we can lower corporate tax rates and hopefully bring a (large) fraction of that back here to benefit the economy as a whole, or some other solution that increases the wealth of the nation that has not been thought of yet. If you're considering an alternate solution, bear in mind that history has shown that imposing taxes in situations like this results in increased friction in moving the wealth back and generally less wealth for the nation imposing the taxes. So maybe it bears some resemblance to trickle-down economics, but is there even a marginally better solution available?
  - grasshopperpurp 9y ago
    I wasn't using hyperbole. It was an honest question. I'm not an economist, but I try to stay up, and this sounds - to me, a non-economist - just like trickle-down economics (with regard to the parent comment - not yours). Is there a different phrase I should use so as to not offend? Edited for clarification
    - ryandrake 9y ago
      Your identification of this as trickle-down economics comes from WkndTriathlete's assumption that bringing the money back here will benefit the economy as a whole (as opposed to the few who obviously directly benefit). I think this idea has been mostly debunked but the topic is complex and there are probably details that reasonable people can disagree over.
      - grasshopperpurp 9y ago

Jamie's right. Imagine how much benefit the US could get if Apple was able to repatriate its hundreds billions in overseas profits without losing over half to taxes.

greydius 9y ago

Would the US not also benefit if Apple just paid the taxes?

sosa2k 9y ago
Apple, and many other companies, are not going to "just pay" billions in taxes.
- recursive 9y ago
  And by a similar token, they're also not "just going to be able" to repatriate that money tax-free.
- pasquinelli 9y ago
  No one's going to "just pay" any amount of taxes, they have to be forced. No matter what else you think about taxes, that's how they work. Paying taxes is always painful; not paying is made to be more painful, at least for some of us.
  - eplanit 9y ago
    "...at least for some of us" it's made to be painful for most every single one of us who aren't mega-companies with an army of lawyers and accountants. This is one reason I go almost blind rolling my eyes when a CEO of such a company gets all preachy about right and wrong, and what's in the public's interest, etc.
- deleted 9y ago
  [deleted]
- guelo 9y ago
  It would be foolish to pay the taxes when they can lobby the public and the government for years until they get their way.
  - valuearb 9y ago
    It's foolish to tax capital investment in the U.S. It's like punishing people for working.
lucozade 9y ago
Doubt it. The taxes aren't owed to the US.
valuearb 9y ago
they don't owe more taxes (profits already taxed in countries where they were earned) unless they choose to repatriate.

Avshalom 9y ago

Well if they invested it in R&D, raises, construction etc. then it wouldn't be profits and wouldn't be taxed. If they don't invest it directly it would just sit in a cloud of accounts, stocks, bonds etc. doing nothing but adding a fraction of a fraction to the liquidity of the market, but it's already doing that from whatever banks it's already in. So, no actually, not really sure how much the benefit the US could get.

georgeecollins 9y ago
Holding money in a foreign account doesn't restrict Apple's spending on R&D in any important way. Apple holds stock in foreign accounts and issues bonds. They have plenty of cash to fund R&D anywhere and if they didn't they can issue bonds. This is like the argument: if I can balance my checkbook, why can't the government. Governments and modern corporations don't work like your checkbook account.
valuearb 9y ago
Allowing repatriation would bring at least $2 trillion in capital back into the U.S. These are profits earned overseas, and trapped there because you lose half of them to taxes if you try to bring them back to the U.S. Bringing it back means a tidal wave of dividends and increases in bank capital, which are reinvested and lent to US businesses to make them more productive and create better jobs. If you really think that money sitting in bank accounts, stocks and bonds does nothing, you simply don't understand anything about the economy. Doing it the U.S. instead of Ireland or the EU is a big deal.
- DrScump 9y ago
  These are profits earned overseas These are profits earned worldwide which have largely been laundered overseas (e.g. the infamous "Double Irish").

malchow 9y ago

Exactly. It's a highly competitive world & it's hard to imagine how long we can continue with "1970s" style government: a decade to approve new bridges, out of control public unions, confiscatory tax rates, NYC subway costs $2B per mile, F-35 now $406B, and so forth. It feels as though the gears, laden with barnacles, are grinding, grinding, grinding to an eventual halt. At one point in this exchange the reporter says: "So are you expressing frustration with President Trump?" Jamie replies: "No, I am expressing frustration with you!"

dsparkman 9y ago

Would the repatriation mean more US jobs as a result? Doubtful. Apple, et al. would not suddenly do on a hiring binge. They would also not suddenly start paying their employees more or provide better benefits. This is a red herring that politicians love to try and justify huge tax rate cuts for businesses that are unnecessary but provide a good sound bite. Tax rate cuts that they already enjoy because the US government allows them to stash the cash overseas already to avoid the taxes. A US citizen is forced to pay income tax on all income worldwide. Live in France, pay French taxes and US income tax on income over $72,000. And you only get the $72k break if you are in the country less than 30 days in a calendar year. US corporations, on the other hand, can stash all overseas earning overseas to reduce their tax liability. Most US corporations already pay a lower effective tax rate than most US citizens.

dsparkman 9y ago
One more quick point. US banks would love to have all that cash repatriated. It for every $1 that Apple et al. deposits into their bank they create $10 of new currency that they can loan out.
thinkcontext 9y ago
There's no shortage of cash to invest now in the US, they are instead most likely to use the cash for stock buybacks and dividends.
valuearb 9y ago
Apple would dividend most of the profits to hundreds of thousands of investors. Those investors will often reinvest those dividends to or leave them in the bank, both of which drive capital investment in the US, higher productivity and creates better jobs. The US corporate tax rate is one of the highest in the world, making the US one of the most costly places to invest. Taxing investment instead of consumption is directly lowering our standard of living. The fact that our taxe rates on individuals working overseas is stupid too doesn't mean we should fix the corporate tax rates. In fact corporate tax rates should be zero, as you don't want to tax reinvested capital, and if profits aren't reinvested they are paid as dividends, and you can tax dividends at ordinary income rates to restore progressively to our tax system.

nihonde 9y ago

'Repatriation' is a nice doublespeak for money earned in foreign countries being coerced into US tax coffers.

guelo 9y ago

Taxes are not completely useless.

grasshopperpurp 9y ago

Can you please explain how this differs from trickle-down economics?

WkndTriathlete 9y ago
Instead of resorting to hyperbole, look at it this way: $2 trillion is parked overseas. It is parked overseas because the opportunity cost of bringing it back here is higher than leaving it overseas, mostly due to corporate tax rates that are higher than they are overseas. We can leave tax rates as they are and gain $0, we can lower corporate tax rates and hopefully bring a (large) fraction of that back here to benefit the economy as a whole, or some other solution that increases the wealth of the nation that has not been thought of yet. If you're considering an alternate solution, bear in mind that history has shown that imposing taxes in situations like this results in increased friction in moving the wealth back and generally less wealth for the nation imposing the taxes. So maybe it bears some resemblance to trickle-down economics, but is there even a marginally better solution available?
- grasshopperpurp 9y ago
  I wasn't using hyperbole. It was an honest question. I'm not an economist, but I try to stay up, and this sounds - to me, a non-economist - just like trickle-down economics (with regard to the parent comment - not yours). Is there a different phrase I should use so as to not offend? Edited for clarification
  - ryandrake 9y ago
    Your identification of this as trickle-down economics comes from WkndTriathlete's assumption that bringing the money back here will benefit the economy as a whole (as opposed to the few who obviously directly benefit). I think this idea has been mostly debunked but the topic is complex and there are probably details that reasonable people can disagree over.
    - grasshopperpurp 9y ago