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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

#71

Post by funthree »

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.

I just meant in the general sense. Google needs to pay their taxes too, but tech companies aren't the only ones evading taxes and getting away with it. Specifically this tax? Maybe not. But that wasn't the point.

Re: Apple now holding more cash than USA

#72

Post by fauigerzigerk »

econgeeker wrote: post #26
dpark wrote: post #20

Earlier quoted context omitted.

> I'm not an economist, but I think that when money flows from A to B, the economy does grow. Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. When you consider that under normal circumstances 30% of that money would flow into…

"private accounts of executives" is an interesting phrase when you cold have said "checking accounts of employees". It conjures up the image of Scrooge McDuck sitting on a pile of gold. But that money is in the economy. If these "Executives" put it into stocks, then it funds company growth. If they put it into municipal bonds then it funds cities. If they put it into a checking account, then it funds home loans. IF t…

That's not entirely true. The effect you describe depends on loan growth. Money sitting in bank accounts isn't automatically funding anything. There has to be demand for loans and the banks have to be willing to lend, otherwise nothing happens.

In other words, there's a difference between capital being available and capital being put to use. Velocity of money is important.

Also, if I buy Apple stock today, Apple doesn't see a cent of it. Whether or not that money goes on to fund anything at all depends on what the person who sold me the stock does with the money.

Re: Apple now holding more cash than USA

#73

Post by jz »

dpark wrote: post #53
jz wrote: post #34

Earlier quoted context omitted.

> Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. Can you give an example of how this would hurt the economy? EDIT - those that down voted, mind giving a reason?

First, "not help" is not a synonym for "hurt". Second, if we assume that a dollar in one place does not always provide the same value to the economy as a dollar in another place (which everyone seems to agree on; they just don't agree on which places provide the most value), then we must conclude that over the long term sending as much money as possible to a sub-optimal place is worse for the economy than sending it…

You down voted my question but still did not provide a concrete example.

Re: Apple now holding more cash than USA

#74

Post by fauigerzigerk »

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…

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.

Re: Apple now holding more cash than USA

#76

Post by lallysingh »

fauigerzigerk wrote: post #72
econgeeker wrote: post #26

Earlier quoted context omitted.

"private accounts of executives" is an interesting phrase when you cold have said "checking accounts of employees". It conjures up the image of Scrooge McDuck sitting on a pile of gold. But that money is in the economy. If these "Executives" put it into stocks, then it funds company growth. If they put it into municipal bonds then it funds cities. If they put it into a checking account, then it funds home loans. IF t…

That's not entirely true. The effect you describe depends on loan growth. Money sitting in bank accounts isn't automatically funding anything. There has to be demand for loans and the banks have to be willing to lend, otherwise nothing happens. In other words, there's a difference between capital being available and capital being put to use. Velocity of money is important. Also, if I buy Apple stock today, Apple does…

But you did provide a little up-pressure on the stock price.

Re: Apple now holding more cash than USA

#77

Post by drcube »

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.

Apple and Google are foreign corporations?

Also, I know people who live and work in foreign countries and haven't stepped foot in the US for decades who still pay tens if not hundreds of thousands of dollars to the US each year in taxes. So yeah, it's unfair that large, American corporations are somehow exempt.

I'm as tax-phobic as any red-blooded yank, but if we are going to demand ever increasing government services and entitlements (including corporate welfare), we better be willing to pay for it.

Re: Apple now holding more cash than USA

#78

Post by dpark »

bad_user wrote: post #65
dpark wrote: post #56

Earlier quoted context omitted.

> As long as those money are flowing, it helps the economy. The only instance where it wouldn't is if it disappeared from the market. This is naive. In what sense does it help the economy if I take $1000 from my account and give it to my friend who puts it into his account? There's no extra money in circulation, no projects funded, no growth, nothing. Money moved and it did nothing. > This is even more obvious in Eur…

if I take $1000 from my account and give it to my friend who puts it into his account? I am not really familiar with the U.S. but here's what happens in Europe, regardless of the legality of that transfer (in my country you cannot give 1000 USD as a gift and not pay taxes, unless you're using some kind of offshore account or other means of tax-evasion): As soon as your friend spends it, in my country 240 USD will go…

You've changed the scenario. You're now talking about spending the money, which is wholly different from the scenario I described. In my scenario, money flowed but did not help the economy. In your scenario, you're assuming the $1000 was spent and then following the trail of its expenditure. But if the money is never spent, none of that revenue will ever get to the government.

I also think you might be wrong about the legality of a tax-free wealth transfer. According to this site, Romania has no gift tax.

http://www.cfe-eutax.org/taxation/gift-tax/romania

And if we are extending the metaphor to wealthy individuals and corporations, they have plenty of people on staff to help avoid or minimize taxes. Ironically, I also read that Banks are specifically excluded from the VAT in Romania.

> Companies also pay taxes on investments or sunken costs, not only salaries. So if Apple brings home some of those billions, but acquires some U.S. company, than a lot of money will still go as taxes.

I'm pretty sure that's not the case. If Apple brings home those billions, they'll pay whatever taxes are owed for that profit. They won't pay extra if they then use the remaining money to buy up another company.

As for why Romania is doing better than Greece, I think it has a lot to do with the fact that Greece's debt is about 144% of its GDP while Romania's is about 34%.

https://www.cia.gov/library/publications/the-world-factbook/...

Romania's revenue/expense ratio is also better than Greece's. There are probably a lot of reasons why Romania is doing better than Greece. It's not just because Romanians send money home to their families.

Re: Apple now holding more cash than USA

#79

Post by fauigerzigerk »

dpark wrote: post #53
jz wrote: post #34

Earlier quoted context omitted.

> Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. Can you give an example of how this would hurt the economy? EDIT - those that down voted, mind giving a reason?

First, "not help" is not a synonym for "hurt". Second, if we assume that a dollar in one place does not always provide the same value to the economy as a dollar in another place (which everyone seems to agree on; they just don't agree on which places provide the most value), then we must conclude that over the long term sending as much money as possible to a sub-optimal place is worse for the economy than sending it…

But what is optimal?

I think it's pretty obvious that taking money away from the rich giving it to the poor, maybe even in the form of food stamps, has a very direct and immediate effect on GDP. So it is clearly optimal in the short run in terms of GDP and also for helping those who really need it in times like these.

But in the longer run, some of the money needs to go into investment or society will stagnate. Some of that investment can be done by governments, but central planning isn't very good at exploring new ideas. Transparent, democratic governments can be pretty efficient in doing things that are already well known and institutionalized. For instance, European health care systems are hugely more efficient than the US one.

On the other hand, the Googles and Apples of this world are difficult to imagine as creatures of some government.

Re: Apple now holding more cash than USA

#80

Post by dpark »

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.

I think it would be reasonable to reduce the tax by the amount of foreign tax paid, but I don't think it would fix the problem. Most of the money in offshore havens was barely taxed. So instead of 35%, Apple can pay maybe 30% bringing it home. That's not enough of a drop to motivate them. It would probably open some more loopholes, too, but I can't be sure about that.

The real issue is that some countries want to allow this stuff. They want these shell companies because it brings them some revenue they wouldn't otherwise have. And who can blame them, really. So as long as we have international companies, we'll have tax havens. I'm not sure if there really is a fix.

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