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Unfortunately, that article is clear as mud and seems to use the word “mandatory” in its headline as editorialized clickbait. In its explanation: “[The plan]
by downandout 9y ago
Unfortunately, that article is clear as mud and seems to use the word “mandatory” in its headline as editorialized clickbait. In its explanation:
“[The plan] uses the mechanics under subpart F to impose a one-time ‘toll charge’ on the undistributed, non-previously taxed post-1986 foreign E&P of certain US-owned foreign corporations as part of the transition to a new territorial regime. The toll charge is reduced by a deduction computed in a manner that ensures a 15.5-percent effective tax rate on ‘cash’ and an 8-percent effective tax rate to the extent the inclusion exceeds the cash position.”
There is nothing there indicating that people with guns were going to show up with guns and demand that Apple repatriate its cash. Once again, the bill was designed to encourage repatriation.
- IBM 9y agoI'm not sure why you think a big 4 accounting firm would need to do clickbait, but that's beside the point. Whether Apple left the cash in Ireland or brought it back to the US, they would have paid $38B in taxes. That's the mandatory part. That's what the quoted text literally says. And since you seem to be unaware, the vast majority of Apple's cash has already been in the US for years, invested in US treasuries and other fixed income assets and held by American trust banks. It's Irish cash only in a legal sense. This is broadly true for all other American multinationals as well.
- downandout 9y agoThe point is that the tax is mandatory, not the repatriation. If they didn’t believe that the US was the best place to put that money, they could have paid the tax and left it there or moved it elsewhere. The fact that they are deploying that capital here indicates some level of belief that the American economy will thrive under this tax plan.
- threeseed 9y agoThis is pure fiction you've invented here. Apple bringing capital back to the US is solely to do with their being tax incentives to do so. Nothing more. Nothing less.
- downandout 9y agoAs you said, they are being incentivized to do so. It isn’t mandatory, which is what this whole argument is about. I don’t know how it’s “pure fiction” to point that out, when your own comment literally says what I have been saying.
- threeseed 9y ago> The fact that they are deploying that capital here indicates some level of belief that the American economy will thrive under this tax plan. This statement is fiction. There is nothing from Apple indicating this.
- downandout 9y agoThey are indicating it by doing it. That cash doesn't have to remain here; they simply have to pay taxes on it. The only reason that a rational corporation would keep it here is because they believe it's a good investment.
- m52go 9y agoSorry you keep getting hassled for such a simple point. The tax is being levied on all overseas money (mandatory) and some companies are deciding to bring that money back to the USA (voluntary). Not sure what's so hard to understand about that.
- downandout 9y agoThanks, I don't get it myself. I guess simply stating what a bill actually does is going to have a hard time here on HN, if that bill has even a tangential connection to the current administration. It has become a holy war.
- threeseed 9y agoAgain. Apple has said nothing about the economy. We could be in a 1930's recession and it would still be tax-advantageous to bring the money back. Especially since Apple is tipped to use it for stock buy back.
- afjl 9y agoI'm not sure this is a very convincing argument to make. The underlying economic conditions have not changed drastically in the last few months or even years. The tax plan's effect on the economy is presently a projection. Apple's decision to repatriate this sum is a no-brainer: America's economic landscape hasn't changed, but the deal that was offered has changed.