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It’s very likely a tax arbitrage.. much of their profit is overseas and repatriating it would cost money (even under the lowered rates from Trump tax cuts). So
by mikeyouse 7y ago
It’s very likely a tax arbitrage.. much of their profit is overseas and repatriating it would cost money (even under the lowered rates from Trump tax cuts). So they can take out loans in the US and payout dividends or repurchase shares to give money to shareholders today while deferring taxes further to the future or wait for another repatriation holiday.
- ashtonkem 7y agoEven more perversely, they can use those foreign profits as a guarantee on their loans, reducing the interest rate they have to pay. Best case they pay a super low bond rate, worst case they repatriate their profits to repay debts and pay some taxes.