Slashdot Mirror
A Third Of Cash Is Held By 5 US Tech Companies (siliconbeat.com)
An anonymous reader writes: Moody's Investors Service released an analysis Friday that shows Apple, Microsoft, Alphabet, Cisco Systems, and Oracle are sitting on $504 billion, which is roughly 30% of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015. Almost all of their earnings ($1.2 trillion) are stashed overseas in an effort to avoid paying taxes on moving profits back to the U.S. under the country's complex tax code. Apple has more than 90 percent of its money located outside of the U.S., according to its most recent filings. Moody's said in its report that "we expect that overseas cash balances will continue to grow unless tax laws are changed to encourage companies to repatriate money." Some of the other tech and Silicon Valley companies in the top 50 include Intel, Gilead Sciences, Facebook, Amazon, Qualcomm, eBay, Hewlett-Packard and Yahoo.
I bet their accountants are killing themselves over how much inflation costs them each year alone.
The responsibility it to the shareholder, no the government.
Trump wants to legalize companies to bring in that money into the USA without having to pay taxes. Basically a big present he'll give them.
meh, the money is overseas because they don't want to pay taxes. They want the poor and middle class to pay for everything, but then turn around and hire employees trapped under the h1-b indenture...err, I mean temporary employment with no rights plan... hey, sounds like the middle class to me :P
Ah, financial news - a place where you can open make statements like: "Unless the US changes its laws to give me lots of money, I can't help but foresee DIRE, DIRE things happening. Financial catastrophe would be putting it lightly." ... and not only is it counted as somehow news, but the richer or more openly lying the person saying it, the more respect it is given.
Well, WELL past the point of poe's law.
Ryan Fenton
After deliberately excluding:
-private citizens
-governments
-non-us companies
-financial companies
and passively excluding companies that operate at slim profit margins, and knowing that wealth distributions are naturally topheavy, we are supposed to be surprised by this 30% figure? Well it's not surprising at all.
It's like if you made a list of large carnivorous land mammals other than bears and canines, and were utterly shocked that over 30% of them were big cats.
While I'm entirely in favour of companies that use tax havens being punished for doing that, I also think that these companies should pay taxes on earnings made in country X in that same country. A number of major US companies earn a majority of their money in overseas markets. Apple, for example, is being lambasted by 'financial analysts' for the fact that only 60% of their earnings are from overseas markets. Those countries will expect them to pay taxes on earnings made in that country locally and not the US. Expecting companies to bring all their overseas earnings back to the US so that they may be taxed there and not in the country where those profits were made is pretty naive if only because it would really piss off the governments that control those markets and hurt the ability of American export companies to compete.
I hope enough of us flesh and bone humans realize soon enough that corporations just aren't like us. Their interests and motivations are not ours. Either they will rule or we will rule. We had better get to work before it's too late.... http://www.movetoamend.org/
When the king heard the words of the Book of the Law he tore his robes.2Kings22:11
Anyone that thinks the valley is anything other than the new Wall Street/oligarchy is kidding themselves.
"unless tax laws are changed to prevent the expatriation of cash to tax havens avoid paying taxes"
The difference between Theory and Practice is greater in Practice than in Theory.
you are going to have to cut corporate taxes. You can't avoid reality.
an ill wind that blows no good
we expect that overseas cash balances will continue to grow unless tax laws are changed to encourage companies to repatriate money.
Or some general-interest minded politicians could pass laws that coerce big companies into paying their share of taxes. But today, that looks like a dream
This story would only be accurate if those companies were holding the $500 billion in actual physical $100 bills in a vault. They are not. This $500 billion is merely entries in a database on a bank server and thus should be compared to the total M4 money supply, not M0. While $500B is a tremendous amount of money, the story would be much less shocking if the correct comparison was made.
Those same companies that built the infrastructure promising a national profit of $19 trillion. http://www.cisco.com/c/en/us/s.... IMO, the Internet of Thangs will be a good portion done by small businesses for very specific markets or even particular companies. We should all become engineers and build the machines to replace us. "Machines are going to take your job, and then they're going to take your life." Taylor Swift ~~~~ 3
So there is all this money sitting in those corporate accounts, the politicians are salivating just thinking about all that dough that was created by those businesses.
I suggest that those businesses buy gold to hedge against inflation imposed upon them by the politicians.
You can't handle the truth.
A Third Of Cash Is Held By 5 US Tech Companies
roughly 30% of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015
So actually it should be:
A third of all cash held by US non-financial companies in 2015 is held by 5 US tech companies
systemd is Roko's Basilisk.
Ala ma bell. Although there may be no monopoly of services, a case can be made that hoarding cash overseas is detrimental to the stability of the country.
Corporations should not pay income taxes. The reality is they already don't. Their customers pay it for them in the increased price.
umm, the money is overseas because it's *earned* overseas. Arguably the shareholders should see some of it, but the US government has no claim.
That Apple funnels US profits in a Nevada shell company to avoid paying state corporate taxes, including taxes in California where corporate headquarters are located.
http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html
Just get rid of all corporation tax. It doesn't really matter, resulting increase sales and personal income will more than make up for it.
:T:R:A:N:S:
Trump only wants to lower corporate taxes (while also raising tax rates for rich people by taking out loopholes, funny you forgot that part).
Apple has said before that if the rate were reasonable, they'd be happy to bring the cash back - so by lowering the corporate tax rate, the U.S. government would get a giant lump sum from these companies. What is not to like?
By the way, if you think Hillary is not going to work the exact same deal you are smoking something. Hillary is far more in bed with corporate interests than Trump could ever dream of.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The responsibility it to the shareholder, no the government.
Here I thought the responsibility of the tax code was to the voters.
Precisely. Politicians are voting for things not in the interest of their constituents exactly the way they always do. Constituents are being deprived of information and fed bread and circuses to distract them from the activity of the Politicians.
One thing people in power know is to keep information away from the public. 2,600 years after being written, the majority of people know only what some twit paraphrased for them and called "The Republic".
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
The U.S. Corporate tax rate is something ridiculous like 35%. They can claim profits are in a country as close as Canada and it would only cost them 15%. You can't be this wildly out of balance in a global market and expect to function well. This is a fundamental aspect of free market capitalism. Actually, if the U.S. lowered the rate to even something like 17% I'm sure they'd generate more revenue, instead of less. A company the size of Google likely spends a great deal of money on clever accounting to avoid taxes. They wouldn't need to do it if there was little or no benefit.
If it ain't broke, don't fix it.
That money was never taken out of the country, so why is it "moving it back"? If Apple sells an iPhone in Japan and it manufactured the phone in China, why should it deposit the profits on that money in a US bank?
Any guest worker system is indistinguishable from indentured servitude.
And reclaim, repatriate the cash as booty. Easy! Problem solved!
Ha ha
Facebook, eBay are *NOT* tech companies. Just because you have a website doesn't make you a tech company as I see it. Amazon is more is more akin to Walmart than technology. Google and Apple are borderline, but they really make much of their money on non-technical ventures.
So instead of 30%
Which is robbery and higher than anywhere else on earth, very possibly the galaxy.
the companies only have to pay 10%. That's a legalized evasion of 20%.
Singing a different tune now aren't you? Originally it was "nothing", now it is 10% of HUNDREDS OF BILLIONS. You know what is zero? What they government gets now.
Are you stupid or a liar? I can't decide which is more likely. You can respond further if you like, IDC as I'll just be chortling at you being wrong to the tune of tens of billions of dollars for many years to come.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Revoke their charter if they are not prepared to contribute to the societies that grant them a license to exist. After all they are users of infrastructure and they expect the community to absorb all manner of negative externalities. It's only right that they contribute their share of tax if the rest of us do.
My ism, it's full of beliefs.
What's being discussed here is called a repatriation tax holiday - https://en.wikipedia.org/wiki/... - which was tried most recently in 2004 by Dubya Bush.
Companies got the tax rate of 5% to bring back over $360 billion which was used to pay dividends, repurchase shares and buy other companies.
The net effect *cost* the Treasury $3 billion and the companies reduced their US workforce by 20,000 jobs.
Repatriation Tax Holiday of 2004 benefited the shareholders by over $300 billion but cost the Treasury $3 billion and those companies, shortly thereafter, cut their workforce by a collective 20,000 employees.
https://en.wikipedia.org/wiki/...
Short answer to your questions: NO
The tax laws will never be changed as long as there are greedy / lazy motherfuckers who are envious of the rich and the money they have
Instead of working for it, those lazy assholes rather tax the rich to death to 'level the playing field' --- meaning, making everybody as poor as they are
We live in a fucked up country with too many fucked up greedy assholes
I hope a hostile government seizes all of their profits heheheehehehee
Unless you are very, very wealthy (part of that 1% you mentioned) then you don't own enough shares to prevent your vote from being drowned out by the major stockholders. And if you're part of 45% (at least, depends on how you run the numbers) you don't own any stock. Hell, 66% of Americans live paycheck to paycheck, so I'm guessing there's not a lot of stock buying going on there unless you're one of those twats that counts a 401k as 'owning' stock.
Here's the thing: Yes, we should work to enact change. No, stock ownership isn't going to make a damn bit of difference. Vote, make your friends and family vote. Favor mandatory voting and finally vote left.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Pocketing overseas earned? profits outside the US was a brilliant way to make the USA #1 for many decades; compounded.
The EU never got a whiff of high tech or IP revenue streams Under taxation treaties this money cannot be repatriated back to USA at anything other than normal taxation rate.Else thr EU will see red. Stupid EU.
Unfortunately "The Public" has been conditioned to ignore such information.
As in: "everybody knows that the most affluent companies are successfully using tax loopholes to avoid paying large amounts of tax", but "The public" has been trained to respond with gems like: "It's 'legal' so it's Ok.", "You'll always lose out aagainst 'The Market'" and "Better the money stays with industry than 'Da Gubbamint', and "We don't want Big Government" and "It's da pooh - lie - tishuns what dunnit".
And other gems of coherent well-informed thinking.
The only thing "people in power" need to hide is repeated ("The Public has a short memory") authenticated videos ("The Public doesn't read") of themselves conspiring in the clearest, bluntest terms imaginable (or The Public won't catch on), to intentionally ("to The Public mere self-serving greed is Ok), illegally and maliciously deprive "The Public" of their rights.
Now that's a pretty low bar to pass, don't you think?
We'[ve had half a century of investigative journalism to tell us about ethical standards in commerce, the way industry can purchase influence, the way in which (i.m.h.o. especially Conservatives) have paved the way for the fullest expression of industry interests in politics and uncounted economic, legal, sociological, and political studies to underpin this and its effects.
What The Public need (in order to catch on) is politics in the form of a reality show. Like errm ... a Trump interview?
These companies might pay taxes to oversea countries when they extract their money to the US. So it might make sense keep it oversea.
A third of cash held by non-financial corporations is not a third of cash. It's not even a third of corporate cash. Learn to read, you freaking nerds. Love, Legal.Troll.
I bet their accountants are killing themselves over how much inflation costs them each year alone.
That's not true at all.
Apple just put $1B of that into Didi Chuxing, the Chinese "Uber" equivalent.
They do plenty with the money. The problem is that, if they wanted to spend it in the U.S., for example, building a factory, the government would tax it again as U.S. income, even though it's already been taxed outside the U.S..
The government is literally paying them to make foreign investments instead of U.S. investments by attempting to engage in dual taxation.
The responsibility it to the shareholder, no the government.
Here I thought the responsibility of the tax code was to the voters.
Ahahaha. The US tax code is and has always been for the benefit of the moneylenders.
Let's be clear. They paid taxes on this money. THis was money earned by selling products in other countries using employees in other countries; the transaction never took place on US soil.
The "tax" they're avoiding is a double-tax on profits by the US code. The way repatriation works is you can only deduct foreign taxes paid from your income, which means you are effectively double taxed. Here's how it works.
Company A sells products in Ireland and the US. Ireland's tax rate is 10% and the US' tax rate is 35%. A sells a product with $1,000 profit. THey pay $350 in taxes and keep $650 as retained earnings. Then they sell a product in Ireland and earn $1,000 in profit. They pay $100 to the Irish government and keep $900 in earnings. Again, the entire transaction happened in Ireland, and they paid income tax on it. So now they attempt to bring the $900 back to the US. That $900 is hit with a 35% tax, so they have to pay $315 to the US allowing them to retain only $585 in earnings. So this creates a situation where Company A now has a choice: leave $900 in their Irish bank accounts which adds to their balance sheets and increases the value of their shareholders, or bring the money to the US and take a massive devaluation to their company, hurting their shareholders.
Companies are purely amoral. They operate in what's the best interests of their balance sheets period. The tax system in the US builds an incentive structure for them to keep the money overseas as that's better for their balance sheets than it is for them to bring it here and invest in expanding US operations.
In this whole situation, there's no win. The government cannot force them to bring the money here, and they cannot dip into the bank accounts of another country to take money they think they're owed. The countries where this money is being held are not going to cooperate because that money is sitting in their bank accounts, creating deposits in foreign banks they can lend on and adding liquidity to their systems; if the money were to leave those countries it would hurt their financial systems. The US Government is acting like a bunch of morons because these articles keep coming out complaining about the situation but nothing is going to change because no country or company is incentivized to do differently. What the government should do is do a tax holiday; drop the rate to 5% if they repatriate for one day. With $1.2 trillion overseas, that would result in at most $60B in tax revenue in one day and around $1.1 trillion flooding the US capital markets. Those companies would then release some as dividends, set up venture arms and do M&A to buy up companies or invest in new ones (all 5 companies listed do this regularly), all of which would create more tax revenue through dividend taxes while setting up more companies and businesses creating growth.
But the government is not incentivized to do this either. If they do, they'll be seen as making a "tax cut for the rich and corporations" and will get hammered in the polls and the next election. So instead they create an appearance of the corporations being the bad guy but they're trying to fight these "evil tax dodgers" which enrages the voter populace and gets them to vote for the politicians who are "fighting these evil corps", keeping those politicians in office. No one including the government wants this money to come back here, all to the detriment of the average citizen.
The big five (Apple, etc) hold roughly 500 billion overseas, not quite Chines government numbers (2,000-4,000 billion) but still significant. How is it invested? Some of the choices are T Bills, TIPS, Euro Bonds, gold and commodities. The companies may be investing the money in ways that meet a number of U.S. government goals (keeping interest rates low, stabilizing markets, supporting weak governments). If so there is more to this story than the usual conflicting "Make them pay taxes" versus "Let them bring it home at a new, low tax rate".
If anyone has any information on how the cash horde is deployed, please post it.
A companies worth doesn't mean they are sitting on the money. If a tech company is sitting on the money they will go out of business fast.
The boards and executives can rot in 8x10 cells until they pay taxes on their profits? How's that for an incentive?
Rule 35 of the internet: "If it can be hacked, it will be". - Charles Stross
There are two now, HP Enterprise and HP. Yet I'm not surprised of them hording cash while at the same time laying off 30,000+ employees; which I was one of. Pisses me off, but there's not much I can do about it. Voting does little good, nothing will stop the march of the multi-nationals quest for shareholder value at the expense of long-term viability.
Not just Google, but also Donald Trump. I think Trump addressed this issue in his tax plan press conference? Check out the video below (which is a link to the direct moment he mentions this issue):
link: https://youtu.be/Lom9mPITxOo?t=4m19s
title:" Full Press Conference: Donald Trump Unveils His Tax Plan (9-28-15) "
publisher: Right Side Broadcasting
date posted: September 28, 2015
view count: 120, 657 views (very few)
in which Trump describes his plan for business taxes:
His tax plan can be found at https://www.donaldjtrump.com/positions/tax-reform, which states the following:
Problem is to get rid of bogus places like Caymans, Cook Islands, Panama, etc., who are simply whores to the billionaires. No reason for REAL countries to make their tax policies ape the pirates and clowns in tax havens. Send in the Marines....
With the French government raid on Google offices today it appears that they are most definitely being accused of breaking existing laws and evidence is being gathered to bring it to court.
Whether they are guilty of outright tax evasion remains to be seen but there are definitely a lot of accusations of illegal activity.