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As an example, Apple has $100 billion parked in offshore subsidiaries that it refuses to repatriate to the US because the full 35% tax rate would apply. If the

by jstalin 13y ago

As an example, Apple has $100 billion parked in offshore subsidiaries that it refuses to repatriate to the US because the full 35% tax rate would apply. If the US were more tax competitive, this sort of thing wouldn't be happening. http://www.huffingtonpost.com/2013/04/24/apple-debt-offshore-cash_n_3142063.html http://www.huffingtonpost.com/2013/04/24/apple-debt-offshore... [EDIT: fixed to read $100 billion, not million]

grej 13y ago
just wanted to note, that's 100 Billion (yes, with a B).
- jstalin 13y ago
  Thanks, fixed.
Nursie 13y ago
Of course. Tax competition is obviously the answer, not companies paying fair taxes in the countries where profits are generated. How silly of me...
- forrestthewoods 13y ago
  Use/VAT taxes are considered regressive and therefore hurtful, bad, and evil with respect towards lower classes. The great irony is that by avoiding such taxes it hurts the poor and enriches the rich. Tragic.
- deleted 13y ago
  [deleted]
Retric 13y ago
The tax rate could be 5% or 15% and they would do the same thing. (Edit: If the US lowered there tax rate to 5% ireland would lower theirs to below that to keep the extra income flowing.) The advantage is they can gain compound interest and or cover overseas losses with money that would otherwise be taxed so there is no reason no to do it. Add to that the occasional tax holiday and companies would be stupid to bring money to the US they don't have to because keeping money overseas is one of the easiest tax loopholes to exploit.
- joelrunyon 13y ago
  If it was more profitable to keep the money here rather than moving it overseas, they would keep it here. They're using legal means to reduce their tax liability. I get that they're big "evil" corporations so we should hate them, but how is this any different than what everyone does on their tax returns except on a larger scale?
- jstalin 13y ago
  Much of Apple's cash is stashed in Ireland, where the corporate income tax rate is 12.5%. If it were 5% in the US, no doubt that money would return quickly. http://underdisclosed.com/apple-offshore-cash-horde-u-s-taxes/ http://underdisclosed.com/apple-offshore-cash-horde-u-s-taxe...
  - andrewtom 13y ago
  - tanzam75 13y ago
    > Much of Apple's cash is stashed in Ireland, where the corporate income tax rate is 12.5%. If it were 5% in the US, no doubt that money would return quickly. Apple did not pay 12.5% tax on the cash that is now in Ireland. They used a loophole known as the double Irish with a Dutch sandwich to avoid taxes in both Ireland and the Netherlands. Note that the US offers a foreign tax credit. Every dollar of taxes paid overseas is credited against US tax owed when the cash is repatriated. Thus, you wouldn't have to reduce US corporate tax to 5%, just to 12.5%. Any company that had actually paid 12.5% Irish tax would be able to repatriate its cash tax-free. Except that these companies have actually paid 0% tax, so this wouldn't work.
ambler0 13y ago
Would it? Unless I missed it, the article doesn't say where Apple's tax haven(s) is/are, but if it's a place like Cayman where the rate is zero, well...you can't compete with zero.

by jstalin 13y ago

grej 13y ago

just wanted to note, that's 100 Billion (yes, with a B).

jstalin 13y ago
Thanks, fixed.

Nursie 13y ago

Of course. Tax competition is obviously the answer, not companies paying fair taxes in the countries where profits are generated. How silly of me...

forrestthewoods 13y ago
Use/VAT taxes are considered regressive and therefore hurtful, bad, and evil with respect towards lower classes. The great irony is that by avoiding such taxes it hurts the poor and enriches the rich. Tragic.
deleted 13y ago
[deleted]

Retric 13y ago

The tax rate could be 5% or 15% and they would do the same thing. (Edit: If the US lowered there tax rate to 5% ireland would lower theirs to below that to keep the extra income flowing.) The advantage is they can gain compound interest and or cover overseas losses with money that would otherwise be taxed so there is no reason no to do it. Add to that the occasional tax holiday and companies would be stupid to bring money to the US they don't have to because keeping money overseas is one of the easiest tax loopholes to exploit.

joelrunyon 13y ago
If it was more profitable to keep the money here rather than moving it overseas, they would keep it here. They're using legal means to reduce their tax liability. I get that they're big "evil" corporations so we should hate them, but how is this any different than what everyone does on their tax returns except on a larger scale?
jstalin 13y ago
Much of Apple's cash is stashed in Ireland, where the corporate income tax rate is 12.5%. If it were 5% in the US, no doubt that money would return quickly. http://underdisclosed.com/apple-offshore-cash-horde-u-s-taxes/ http://underdisclosed.com/apple-offshore-cash-horde-u-s-taxe...
- andrewtom 13y ago
- tanzam75 13y ago
  > Much of Apple's cash is stashed in Ireland, where the corporate income tax rate is 12.5%. If it were 5% in the US, no doubt that money would return quickly. Apple did not pay 12.5% tax on the cash that is now in Ireland. They used a loophole known as the double Irish with a Dutch sandwich to avoid taxes in both Ireland and the Netherlands. Note that the US offers a foreign tax credit. Every dollar of taxes paid overseas is credited against US tax owed when the cash is repatriated. Thus, you wouldn't have to reduce US corporate tax to 5%, just to 12.5%. Any company that had actually paid 12.5% Irish tax would be able to repatriate its cash tax-free. Except that these companies have actually paid 0% tax, so this wouldn't work.

ambler0 13y ago

Would it? Unless I missed it, the article doesn't say where Apple's tax haven(s) is/are, but if it's a place like Cayman where the rate is zero, well...you can't compete with zero.