Apple & Other Tech Companies Stash $Billions Overseas

Discussion in 'Economics' started by Scataphagos, Jul 10, 2012.

  1. http://www.electronista.com/articles/12/07/09/apple.keeps.74.billion.overseas/

    Apple is the worst (best?) with some $74 Billion. This alone is enough to keep me from EVER owning an Apple product.

    And of course, those profits go untaxed until they are brought onto US shores.

    No wonder so much of their labor and facilities are overseas...

    Shouldn't something be done about this policy?
     
  2. Ed Breen

    Ed Breen

    The problem is our international corporate tax policy that drives capital out of the U.S. Apple and all other multinationals that earn profit overseas do pay tax in the countries where they earn that profit. The issue is the tax they would owe if they invested the money in the U.S....after they paid the foreign tax. The U.S. says that if they invest or use the money that was earned in foreign operations back in the U.S., then they must pay U.S. tax of 35% on that money. If, on the the other hand, the multinational leaves the money in its foreign operation or invests that money anywhere else in the world except the U.S., then the multinational will not owe the additional 35% tax.

    Now, what would you do with the profit you made making product in Asia and selling the product in Asia. After you paid your tax in asia....something like 17% to 22% depending where you are....would you bring the money back and invest it in California...where you would pay an additional 35% tax plus state taxes? Of would you invest it in Asia without paying more tax?

    What should be done about the policy is that it should be ended. We should only charge a corporate tax on companies that make or sell things in the U.S. We should not tax their earnings that result from operations outside the U.S., that are taxed in countries where they occur.

    The best policy would be to eliminate all corporate tax on U.S. companies and make up for the lost revenue (small) by raising the dividend tax to the regular income tax rate (so that the tax is paid by the shareholders) and requireing the profitable corporations to issue dividends unless they reinvest the money. If you made that change all the the offshore money would rush back to invest in the U.S. and we would have to open up immigration to fill the employee shortages.

    The law is stupid. It is designed to prevent capital earned by U.S. multinationals outside the U.S from being invested back in the U.S. Why do you blame these companies for having foreign held cash reserves when it is our law that created that result?
     
  3. yeah, I don't think the IRS had a stand on Ellis Island that you had to pass through to get in.
     
  4. Ed Breen

    Ed Breen

    Well the IRS does have a 'stand' of sorts that you have to pass through and pay tax on your estate (as if you had died) if you want to get out.
     
  5. DON'T GO WEST (or for that matter east) YOUNG MAN!