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If the interest on the loan amounts to less than what they'd pay in taxes then its worth it to take the loan and wait for said tax holiday. This is common advic

If the interest on the loan amounts to less than what they'd pay in taxes then its worth it to take the loan and wait for said tax holiday. This is common advice for people too - take a loan if you can get more value out of your cash on hand than paying the interest on said loan. The article cites historically low interest rates -- that means it makes sense to take a loan even ignoring the foreign assets situation, if you feel you can use the money to generate more money than the interest.

socialist_coder 14y ago
I get that it's still beneficial to take the loan. I was more asking about the situation in general, not in relation to this specific loan. Is the only reason they're waiting because they think there will be a tax holiday? Or is there more to it than that? One of the things I learned working on freemium games is that if you have too many sales, then people will only buy when there is a sale. I hope the US Govt has learned that lesson and never does another Tax Holiday.
- tolmasky 14y ago
  I'm not sure how foreign assets work, but it may be the case that Apple is free to use those assets as it sees fit in those other countries. In that case, it may never make sense to bring the money back without a tax holiday. I know you think you are sticking it to them by never granting them another tax holiday, but in reality all you may be doing is accelerating the pace at which they realize that they aren't an American company so much as a global company. Its already the case that the products are assembled in China, and someday its quite possible most of their phones will be sold in China as well, and they certainly pay taxes for that stuff in China (as well as every other country they sell products in). Why do you think taxes on profits in other countries "belong" to America? I think China has as much a claim that Apple should pay THEM taxes on the work they do America. In a world where more and more of their profits happen overseas, then penalizing them when they try to bring the money to the US may just make them realize someday that hey, they should just do everything overseas and then America won't benefit from Apple at all (except for the few sales that happen on US soil).
  - socialist_coder 14y ago
    That is a good argument. You definitely made me think.

socialist_coder 14y ago

I get that it's still beneficial to take the loan. I was more asking about the situation in general, not in relation to this specific loan. Is the only reason they're waiting because they think there will be a tax holiday? Or is there more to it than that? One of the things I learned working on freemium games is that if you have too many sales, then people will only buy when there is a sale. I hope the US Govt has learned that lesson and never does another Tax Holiday.

tolmasky 14y ago
I'm not sure how foreign assets work, but it may be the case that Apple is free to use those assets as it sees fit in those other countries. In that case, it may never make sense to bring the money back without a tax holiday. I know you think you are sticking it to them by never granting them another tax holiday, but in reality all you may be doing is accelerating the pace at which they realize that they aren't an American company so much as a global company. Its already the case that the products are assembled in China, and someday its quite possible most of their phones will be sold in China as well, and they certainly pay taxes for that stuff in China (as well as every other country they sell products in). Why do you think taxes on profits in other countries "belong" to America? I think China has as much a claim that Apple should pay THEM taxes on the work they do America. In a world where more and more of their profits happen overseas, then penalizing them when they try to bring the money to the US may just make them realize someday that hey, they should just do everything overseas and then America won't benefit from Apple at all (except for the few sales that happen on US soil).
- socialist_coder 14y ago
  That is a good argument. You definitely made me think.