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Apple says $60 billion will remain overseas until US tax law changes (passing the FairTax Bill would repatriate Trillions in off shore profits, like those w/Apple)

Adakin Valorem~PWCM~JLA 2012/03/21 17:08:39


By Brendan Sasso and Bernie Becker - 03/19/12 04:24 PM ET



Apple made an aggressive pitch for a corporate tax holiday Monday, stressing that it plans to keep more than $60 billion parked offshore until Congress makes it easier for companies to bring those profits home.


The warning from the nation’s most valuable company came as Apple announced it would pay a dividend to shareholders and buy back stock, moves that will cost about $45 billion over three years.


But Apple — which, like several other Silicon Valley titans, has spent months lobbying for more flexibility to repatriate offshore profits — said it will rely exclusively on domestic cash reserves for the transactions and will not touch the billions in profits held abroad.


"Repatriating the cash from offshore would result in significant tax consequences under current U.S. law," Apple Chief Financial Officer Peter Oppenheimer said on a conference call.


Apple and other backers of a repatriation holiday — including Oracle, Cisco, Microsoft and Google — threw their support last year behind the WIN America Campaign, a lobbying coalition that urged Congress to temporarily reduce the tax rate that U.S. multinationals have to pay on offshore profits.


As it stands, companies have to pay their full corporate rate, as high as 35 percent, on profits made anywhere in the world. The corporations can defer paying those taxes until the profits are brought to the United States, and also receive credits for taxes paid to foreign governments.


Supporters of a tax holiday say that U.S. companies have, according to some estimates, more than $1 trillion held abroad, and that making it easier to repatriate those funds could quickly inject cash into the U.S. economy.


Under repatriation measures introduced in both chambers of Congress, multinationals could potentially pay a tax rate as low as 5.25 percent on offshore profits.


But while those proposals have supporters in both parties, the measures have powerful opponents and have yet to move far in Congress. Skeptics of the holiday point to several reports that have said a previous tax holiday, enacted in 2004, did little to stimulate job creation.


The Obama administration, which released a corporate tax reform framework last month, is among those that feel the last holiday did little to help the economy. Administration officials have for months said they are firmly opposed to a repatriation holiday, and that they would not consider the idea outside of the broader context of tax reform.


“I think generally we're pretty clear that we're opposed to a repatriation holiday, that the evidence with the previous one indicated that lots of the resources were used for stock buyback, dividend payments and so on,” a senior administration official said last month.


Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, included a repatriation provision in a draft tax reform proposal last year that would permanently limit U.S. taxation of offshore profits.


But Camp, along with House Speaker John Boehner (R-Ohio), also disagreed with House Majority Leader Eric Cantor (R-Va.) late last year over whether to include a repatriation holiday into the House GOP’s payroll tax deal. The three Republicans all support repatriation, but have not always been on the same page over whether to push for a holiday or include repatriation as part of a wider tax reform agreement.


Once repatriation failed to make the year-end tax deal, many Washington tax observers felt it faced long odds this year, given that 2012 is an election year and some top lawmakers are preparing a push for tax reform in 2013.



But the comments from Apple indicate that the lobbying efforts for a holiday could soon be ramped up again, and some on K Street have said supporters can use the argument that the company might have made even larger dividend payments under a repatriation holiday.


"We have expressed our views with Congress and the administration. We think that the current tax laws provide a considerable economic disincentive to U.S. companies that might otherwise repatriate the substantial amount of foreign cash that they have," Oppenheimer said. "That's our view, and we've expressed it."


But other tax lobbyists have said they are skeptical that taxes played that much of a role in the size of Apple’s dividend payments — with one saying that the tech giant had been “politically tone deaf” in making the argument that it needed a tax holiday on the same day it announced a roughly $45 billion investment.


“The compelling argument is: We need this money,” the lobbyist said. “Well, they sure make it seem like they don't.”


== == ==


The FairTax Bill would abolish the existing tax code allowing business and individuals to keep all that they earn, create and acrue. For details see http://www.fairtax.org/site/PageServer?pagename=about_faq
== == ==

Read the rest of the "Apple" article here:
http://thehill.com/blogs/hillicon-valley/technology/216725-ap...


Read More: http://thehill.com/blogs/hillicon-valley/technolog...

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  • Marcus Clark 2012/06/17 04:04:05
    Marcus Clark
    +1
    Take a look at the Fair Tax. The Fair Tax has only one rate. It is a simple end user only sales tax. Only new goods and services are taxed. (After something is taxed once, it is never taxed again.) It has a built in "prebate" that effectively untaxes the poor and makes the whole thing progressive without defining income levels. It effectively ends class warfare via taxation.

    For more information on the Fair Tax, just click on any of the Fair Tax links in this comment.

    By the way, "No tax" is absolutely unrealistic. "Flat tax" just puts us back to where our current system started which was broken from its initial creation. Our current tax system cannot be fixed. It must be replaced. Fair Tax is the best answer. It is the only fair answer.
  • Adakin ... Marcus ... 2012/06/18 00:09:43
    Adakin Valorem~PWCM~JLA
    +1
    Unlike Romney & Obama's fantasy tax reform proposals, the FairTax is an actual bill in congress that already has over SIX DOZEN cosponsors in the house and senate. Check out HR-25 and it's senate version, S-13. Both would completely untax the working poor and allow ALL workers to bring home their entire paycheck without any federal withholding for FICA taxes, which can impact the poor and self employed up to 15.3% of their income before one dime in "income taxes" are removed.
    Remember,
    With an income tax, your money is SEIZED.
    With the FairTax, your money is PAID.
  • WhereIsAmerica? ~PWCM~JLA 2012/03/22 03:47:45
    WhereIsAmerica? ~PWCM~JLA
    +1
    Fair tax would be very good for this country.
  • Adakin ... WhereIs... 2012/03/22 18:12:53
    Adakin Valorem~PWCM~JLA
    +2
    Thanks for telling your fellow SH readers that the FT would be good for America...

    Now, PLEASE call your Congrescritter and tell him/her to cosponsor HR-25 or ask why she hasn't! (if she/he has cosponsored HR-25, please thank your representative with a phone call and letter to the editor at your local paper.)

    Thanks WIS!
  • Kid T. Party 2012/03/22 02:34:58
  • Mr Wayne 2012/03/21 23:37:38
    Mr Wayne
    And when you have more money than the United States, you can tell them that.
  • Adakin ... Mr Wayne 2012/03/21 23:49:23
    Adakin Valorem~PWCM~JLA
    +1
    Aw come on now Mr. Wayne, you are just being far too cynical! We both know that Obo would just go print more money! That's why your gas costs $3.80/gal today when it only cost $1.89 when Barry took the oath back in Jan/09.
  • Mr Wayne Adakin ... 2012/03/21 23:50:23
    Mr Wayne
    I call it like I see it.
  • Adakin ... Mr Wayne 2012/03/22 00:51:06
    Adakin Valorem~PWCM~JLA
    Hows the view?
    head in the sand
  • Mr Wayne Adakin ... 2012/03/22 14:00:46
    Mr Wayne
    You tell me.
    head up your ass
  • TruBluTopaz 2012/03/21 23:15:03
    TruBluTopaz
    Surely not. Surely Apple, beloved of liberals everywhere, wouldn't hold dollars off shore because of a petty little corporate tax, would they??????? rotten apple
  • Adakin ... TruBluT... 2012/03/21 23:32:24 (edited)
    Adakin Valorem~PWCM~JLA
    +2
    Apple "wouldn't hold dollars off shore because of a petty little corporate tax, would they???????"

    Only if the BoD and upper management had a fiduciary obligation to their shareholders.

    If we assume that they already paid taxes in the country where the profit was generated, why should they be obligated to pay taxes AGAIN in a country where those fund were NOT earned? A reasonable proposal would be to simply allow that untaxed revenue return to the U.S. where it would either be invested in new infrastructure, buy competitive businesses or provide dividends to the shareholders.

    But for example, let's look at a $100 profit earned from sales in, say, Hong Kong where there is tax on that profit... the tax get paid because that's where the money was earned. If the net proceeds comes back to the US it would be taxed again as a corporate tax obligation If that net proceeds after double taxation was then paid out to shareholders as a dividend dispersement, that dividend would be taxed A THIRD TIME as an obligation of the shareholder.

    By the time that $100 profit finally makes it to the actual owner's (shareholder) pocket, the investor would be lucky to see $60 and it’s more likely it would be around $40 of that original $100 that was earned.

    All the more reason to scrap the en...

    Apple "wouldn't hold dollars off shore because of a petty little corporate tax, would they???????"

    Only if the BoD and upper management had a fiduciary obligation to their shareholders.

    If we assume that they already paid taxes in the country where the profit was generated, why should they be obligated to pay taxes AGAIN in a country where those fund were NOT earned? A reasonable proposal would be to simply allow that untaxed revenue return to the U.S. where it would either be invested in new infrastructure, buy competitive businesses or provide dividends to the shareholders.

    But for example, let's look at a $100 profit earned from sales in, say, Hong Kong where there is tax on that profit... the tax get paid because that's where the money was earned. If the net proceeds comes back to the US it would be taxed again as a corporate tax obligation If that net proceeds after double taxation was then paid out to shareholders as a dividend dispersement, that dividend would be taxed A THIRD TIME as an obligation of the shareholder.

    By the time that $100 profit finally makes it to the actual owner's (shareholder) pocket, the investor would be lucky to see $60 and it’s more likely it would be around $40 of that original $100 that was earned.

    All the more reason to scrap the entire tax code and pass the FairTax which would create jobs and attract business and industry back to our shores where taxes would no longer be a major embedded cost built into the price of everything we now buy.

    FairTax
    (more)
  • TheTruth1313 2012/03/21 18:35:05
    TheTruth1313
    Too bad these people have already paid off our corrupt government officials(much less then they would owe) to never do anything about it.
  • Fred 2012/03/21 17:39:45
    Fred
    +1
    But companies do not trust Obama . He has shown his whole 3 years that he blames big buisness for his stupid policies
  • ὤTṻnde΄ӂ 2012/03/21 17:39:38
    ὤTṻnde΄ӂ
    +1
    Repatriation didn't work last time.
  • Adakin ... ὤTṻnde΄ӂ 2012/03/21 18:45:02
    Adakin Valorem~PWCM~JLA
    You are right Tunde, idea of 'reparations' is just a shell game, a band-aid, a temporary patch.

    On the other hand, passing the FairTax bill (HR-25) is an actual SOLUTION. It moves the paradigm from taxing income, earnings, wages, profits and wealth creation over to simply taxing consumption.

    Such a shift would provide the stimulus for job creation, investment and savings that we do not have with the current system that punishes success and rewards failure and poverty. It moves the freedom to choose from those 535 "Elites" inside the beltway, to the 310 Million people that earn livings and make daily choices of what is best for themselves, their families, their church and their community.

    Free the slaves, pass the FairTax!
  • Sport_Geoff 2012/03/21 17:38:46
    Sport_Geoff
    +2
    Would this be the same Apple that makes the Ipad that everyone (including liberals) clamor for and will line up in anticipation of the latest models release?

    The reason I ask is because if your a liberal and buy an Ipad aren't you guilty of supporting those greedy corporate bastards that don't want to pay their "FAIR SHARE" in taxes and is hiding their money in offshore / overseas accounts? (remember the Romney bashing over the same thing?)

    Of course, you liberals need your Ipads so you can TWEET and BLOG about those hateful Conservatives and protest over Limbaugh's calling some moonbat a slut and to spread the word about Republicans being in bed with big oil....so I guess supporting a company that takes advantage of legal tax code (like Romney did) really isnt that big a deal is it?.............After all, things are different when they serve a liberal's purpose.
  • MadAsHEck Sport_G... 2012/03/21 19:13:05
    MadAsHEck
    +1
    And then look at where Apple products are made. In China by over 500,000 chinese workers.
  • MadAsHEck 2012/03/21 17:33:16
    MadAsHEck
    +2
    Apple is a tip of the Iceberg. This CBS 60 minute piece was very interesting.

    It is actually trillions when all companies are considered. If the Tax rates were lowered to just 10% it would dump billions of dollars back into the Economy, and the treasury.

    http://www.cbsnews.com/video/...
  • Adakin ... MadAsHEck 2012/03/21 18:51:49
    Adakin Valorem~PWCM~JLA
    Or you can abolish the tax code entirely and shift the pardigm to taxing consumption. The estimate is that there is over $13 Trillion in off-shore corporate profits that remain outside the grasp of our government, BECAUSE of the tax code.

    If that money was brought back into the U.S.... untaxed..., it would either be invested in job creation or paid out as dividends to shareholders, who in turn would invest it or spend it or used to buy other businesses and expand our economy.

    Support the candidates that support HR-25. Ask your representative to join the over SIX DOZEN Bipartisan congresscritters that have cosponsored the FairTax!
  • RJ~PWCM~JLA 2012/03/21 17:28:40
    RJ~PWCM~JLA
    +2
    Regardless of whether or not it will "create jobs" or "stimulate the economy", it would seem that w'd be better off with the money here in the US rather than overseas!
  • MadAsHEck RJ~PWCM... 2012/03/21 17:34:41 (edited)
    MadAsHEck
    +2
    Yup! It would shore up the banking system, and more importantly put huge bucks into the treasury in Tax payments.

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