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Apple now holding more cash than USA

bbc.co.uk

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Re: Apple now holding more cash than USA

#91

Post by nkassis »

nhaehnle wrote: post #54

A corporation holding cash means they're not investing as much as they could according to supply-side economic thinking. This should make people reflect on the state of the economy. While it's true that some companies just like to hoard cash (e.g. Microsoft), this may just be the symptom of a bigger problem. With consumers low on cash due to the recession, it simply makes no sense to invest any more. This in turn gua…

Here's why I believe the economy in the shitters : http://en.wikipedia.org/wiki/Velocity_of_money

Money needs to move and it's not right now.

Re: Apple now holding more cash than USA

#92

Post by nhaehnle »

nkassis wrote: post #91
nhaehnle wrote: post #54

A corporation holding cash means they're not investing as much as they could according to supply-side economic thinking. This should make people reflect on the state of the economy. While it's true that some companies just like to hoard cash (e.g. Microsoft), this may just be the symptom of a bigger problem. With consumers low on cash due to the recession, it simply makes no sense to invest any more. This in turn gua…

Here's why I believe the economy in the shitters : http://en.wikipedia.org/wiki/Velocity_of_money Money needs to move and it's not right now.

I agree. The question is: how do you fix it?

In the case of the big corporations, for example, I see no direct, freedom-compatible way of getting them to spend that money. The only way I see that might work (though here Apple might still be a special case) is to create an environment where businesses see an increase in demand as an incentive for increased investment.

Then the question becomes where that demand should come from, and the most feasible short-term answer (the government) is almost universally ideologically opposed (yes, even Democrats these days seem to shy away from direct spending to stimulate the economy).

Re: Apple now holding more cash than USA

#93

Post by econgeeker »

dpark wrote: post #36
econgeeker wrote: post #27

Earlier quoted context omitted.

"Every dollar they receive (and a lot they don't) gets invested in the economy in some way (salary, materials purchases, R&D, etc.)" Two problems with that statement. First, you're only looking at one side of the equation. You're ignoring the cost and damage to the economy that government spending does. I don't just mean by crowding out other, more efficient solutions, but the literal taxation and inflation that gove…

> Two problems with that statement. First, you're only looking at one side of the equation. You're ignoring the cost and damage to the economy that government spending does. I don't just mean by crowding out other, more efficient solutions, but the literal taxation and inflation that government uses to get the money in the first place inhibits economic growth. Both actions reduce the "bottom line" for consumers and c…

"The more you tighten your grip, Tarkin, the more star systems will slip through your fingers."

Re: Apple now holding more cash than USA

#94

Post by fungi »

ristretto wrote: post #15
apress wrote: post #3

Of course, there's actually a much deeper and more important connection. The huge cash hoards of Apple, Google, Microsoft and other big multinational corporations are a direct outgrowth of clever tax strategies they use to shift profits to low-tax countries and avoid US taxes. http://www.reuters.com/article/2011/07/27/us-microsoft-tax-i... Corporate tax payments as a percentage of total tax revenues are low and histo…

Imagine how worse this problem is for European countries, which face the same tax avoidance, and have to sustain massively more expensive public sectors.

Europe is a big diverse place... I would imagine you couldn't really generalise to accurately.

Also offset by comparative minuscule military spending and far more efficient health and corporate/public welfare. But [citation needed], just generalisations from an antipodean armchair.

Re: Apple now holding more cash than USA

#95

Post by refurb »

dpark wrote: post #51
hugh3 wrote: post #39

Earlier quoted context omitted.

depriving the government of the tax revenue that money transfer should have brought in. I'm not sure about the "should have" part here. That money was earned in another country. It has already had tax paid on it, in another country. It's silly for the US to try to double-tax companies, it just puts US-based companies at a competitive disadvantage against local companies when competing for foreign business. For instan…

I don't think you really understand how the offshored profits work. It's not just that money isn't brought back from overseas, but that money made in the US can be sent overseas. You create a wholly-owned overseas company that gets paid to do some kind of work for you. Then you way overpay them for that work. As a wholly-owned subsidiary, all the extra money they hold is actually owned by you, but you don't pay taxes…

That's not true. Companies aren't free to set transfer prices. The IRS has many rules on how much a company can charge a foreign unit for a product (and vice verse). That method of tax avoidance was closed a long time ago.

Re: Apple now holding more cash than USA

#96

Post by dpark »

refurb wrote: post #95
dpark wrote: post #51

Earlier quoted context omitted.

I don't think you really understand how the offshored profits work. It's not just that money isn't brought back from overseas, but that money made in the US can be sent overseas. You create a wholly-owned overseas company that gets paid to do some kind of work for you. Then you way overpay them for that work. As a wholly-owned subsidiary, all the extra money they hold is actually owned by you, but you don't pay taxes…

That's not true. Companies aren't free to set transfer prices. The IRS has many rules on how much a company can charge a foreign unit for a product (and vice verse). That method of tax avoidance was closed a long time ago.

It was not closed, it was reduced. Companies are still doing it. They wouldn't continue if it wasn't beneficial to do so.

US regulations also don't do anything to transfer prices in other countries. Google apparently pays something like 2.4% tax on their foreign profits because they funnel them all to the Bahamas.

Re: Apple now holding more cash than USA

#97

Post by brown9-2 »

tomelders wrote: post #21
lawlit wrote: post #16

What will happen to the American if the congress does not vote on the rise ?

No one can say for sure. It's a doomsday scenario that no one is really prepared for. The only thing anyone can say with any certainty is that the next president of the USA will be a Republican, because that's what this is all about. Destroy the economy, blame the incumbent, and scoop up the next election.

Disagree strongly. If catastrophe happens, voters just may remember who caused it. I'd like to come back to this comment in 16 months.

Re: Apple now holding more cash than USA

#98

Post by dangrossman »

timedoctor wrote: post #86

The government will get the money eventually through increased taxes or through printing more money and deflating the value of the apple "cash" pile. All the Government has to do is to print money and they can take Apple's money without Apple being able to do anything about it!

Nothing says Apple must keep the money in the form of US dollars in a bank account. If it's sitting in any kind of investment that tracks inflation, printing money won't take the money. If they choose to keep it in other currencies, printing money won't take the money.

Re: Apple now holding more cash than USA

#99

Post by SoftwareMaven »

ceejayoz wrote: post #32
tomelders wrote: post #19

Earlier quoted context omitted.

In this instance, to my knowledge, Apple isn't using shell companies. It has iTunes set up in Luxembourg, but that's a very real company. And each country has it's own Apple subsidiary which again are real companies in their own right. I'd say that it's hardly tax avoidance, since they pay their taxes in the countries where the revenue is generated. No one in their right mind would give up 35% of their wealth simply…

> It has iTunes set up in Luxembourg, but that's a very real company. Sure, but is it really operating out of Luxembourg? I suspect most of their employees are here in the States.

Apple has a company here in the States and in Luxemborg. US employees are employed by the US corporation.

Re: Apple now holding more cash than USA

#100

Post by jodrellblank »

funthree wrote: post #55
nhaehnle wrote: post #54

A corporation holding cash means they're not investing as much as they could according to supply-side economic thinking. This should make people reflect on the state of the economy. While it's true that some companies just like to hoard cash (e.g. Microsoft), this may just be the symptom of a bigger problem. With consumers low on cash due to the recession, it simply makes no sense to invest any more. This in turn gua…

Apple forbid they'd bring those manufacturing jobs to the US and actually pay some Californians a decent wage and help their own country. http://harryjerry.com/tech/how-apple-products-are-made-in-fo... http://www.google.com/publicdata/explore?ds=usunemployment&#...

Aren't companies legally required to act in the vest interests of shareholders?

Overpaying for production out of patriotic racism doesn't seem to fit that mould.

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