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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

#121

Post by wisty »

jodrellblank wrote: post #100
funthree wrote: post #55

Earlier quoted context omitted.

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.

No. Some free-market fundamentalists say that companies should have an ethical obligation to maximize profit for their shareholders.

I think the law says that companies are required to follow their constitution. Generally, the board of directors interprets that constitution, and then tells the CEO what to do.

Shareholders may be able to vote to change the constitution, but this would be covered by the company's constitution.

I think non-profits can be companies. That would be a very clear example of companies that are not legally required to act in the interests of shareholders.

Re: Apple now holding more cash than USA

#122

Post by rickdale »

nivertech wrote: post #63
rickdale wrote: post #48

If you have $1 you are holding more cash than the US.

If you have $1 and don't have a mortgage or other debts

I said more cash, not more worth or value. Thanks for the downvotes, great to see everyone is using their noggins these days.

Re: Apple now holding more cash than USA

#124

Post by gnaritas »

tomelders wrote: post #119
gnaritas wrote: post #105

Earlier quoted context omitted.

> The only thing anyone can say with any certainty is that the next president of the USA will be a Republican And they'd be lying.

I admit, I was being trite, but it's a good bet.

It's really not. I'd say odds are Obama gets a second term. Congress is broke, but the president is doing just fine.

Re: Apple now holding more cash than USA

#125

Post by apress »

refurb wrote: post #102
dpark wrote: post #96

Earlier quoted context omitted.

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.

I won't argue that companies are still trying to reduce taxes through transfer prices. However, any company that tries to avoid US taxes through transfer price schemes is not going to get very far. I have no doubt that Google is funneling a lot of revenue through the Bahamas, but they must have setup the off-shore corporation in such a way as to fall outside the jurisdiction of the IRS. To say that they are only payi…

Transfer pricing of intellectual property is at the core of this. Read the Bloomberg article and check out the interactive graphic. http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...

Re: Apple now holding more cash than USA

#126

Post by apress »

thematt wrote: post #68
funthree wrote: post #57

Earlier quoted context omitted.

Maybe it's time they paid their fucking taxes like the rest of us.

Why should they pay tax on that money? It was generated in a foreign country by a foreign corporation and already subjected to foreign taxes. The US didn't expend resources helping them make that money, therefore it doesn't deserve any of it. If anything, we should be encouraging them to bring it back here.

That is not correct. Did you actually read any of the links above? Apple, Google, Microsoft and others shift billions of dollars a year in profits ON SALES IN THE UNITED STATES out of the US and to low tax or no tax countries using clever internal sales agreements with their own subsidiaries over intellectual property licensing. http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...

Re: Apple now holding more cash than USA

#127

Post by apress »

ctdonath wrote: post #6
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…

Note that those big multinational corporations can't move money made outside the country to back home in the USA without incurring an absurd ~30% tax on top of whatever other taxes they paid whoever already. Word is Apple has been pushing for an amnesty so they _can_ bring their money home; until then, that money earned outside the US stays outside the US.

1. They get credit for all the taxes they paid in other countries. They are essentially supposed to pay the difference between the US rate and the various foreign rates.

2. If you read some of the links, you'll discover that they are minimizing the taxes they pay on US revenue -- sales made right here at your corner Apple store -- by use of clever licensing agreements with their own foreign subsidiaries. Look at the interactive graphic on the Bloomberg story about Google, for example http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...

Re: Apple now holding more cash than USA

#128

Post by apress »

fauigerzigerk wrote: post #74
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…

I think the policy dilemma is that you are both right to some degree. If it wasn't such an ideologically charged issue, the solution would be quite simple. Tax repatriated profits but reduce the amount payable by the taxes paid overseas. Or enter into a double taxation agreement with the countries involved.

Companies already get to reduce their US tax by the amount of tax they paid a foreign government. The issue here is that that they've moved the profits to places where little or no taxes are paid at all. This is not about double taxation.

Re: Apple now holding more cash than USA

#129

Post by apress »

tomelders wrote: post #19
apress wrote: post #7

Earlier quoted context omitted.

This is not about profits made overseas, say like selling iPhones in China This is the use of complex strategies, like creating a shell company in the Isle of man that "owns" intellectual property and "licenses" it to the US subsidiary for a fee that just happens to equal most of the profits on US sales. The profits go to the tax haven and never come back.

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…

Please go read the links. This is not about the sales happening in countries outside of the US. This is about the billions of dollars inprofits Apple, Microsoft, Google and others would otherwise be making on their US sales being shifted around to low-tax havens using clever internal licensing agreements. For example, see http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...

Re: Apple now holding more cash than USA

#130

Post by angelortega »

Wentz wrote: post #115
angelortega wrote: post #111

It's time to nationalize Apple, sell its assets and use the money to take off of the crisis.

Sarcasm?

Just kidding, but some people aren't just able to accept a joke about Apple.

All this does not make my initial comment less true, though.

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