Every US Taxpayer Has Effectively Paid Apple At Least $6 in Recent Years (arstechnica.com)

An anonymous reader shares an ArsTechnica report: Apple has received at least $6 per American taxpayer over the last five years in the form of interest payments on billions' worth of United States Treasury bonds, according to a report by Bloomberg. Citing Apple's regulatory filings and unnamed sources, the business publication found "the Treasury Department paid Apple at least $600 million and possibly much more over the past five years in the form of interest." By taking advantage of a provision in the American tax code, Bloomberg says that Apple has "stashed much of its foreign earnings -- tax-free -- right here in the US, in part by purchasing government bonds." As The Wall Street Journal reported in September, American companies are believed to be holding approximately $2 trillion in cash overseas that is shielded from US taxes. Under American law, companies must pay a 35-percent corporate tax rate on global profits when that money is brought home -- so there is an incentive to keep as much of that money overseas as possible.

Comments

Google, Motorola, Intel . . .

[Anonymous Coward]

also to blame. Picking on Apple for this is really pretty silly. Every large multi-national company does this.

Re:Google, Motorola, Intel . . .

[networkBoy]

yup.

Make repatriating money easier and cheaper and two things will happen:
1) money will come back into the US and help our economy
2) whoever does it will be crucified for being easy on big business income taxes.

Re:Google, Motorola, Intel . . .

[JustAnotherOldGuy]

Wait until Trump slaps $50 per phone tariff on their asses

Lol, like an extra $50 would stop a die-hard Apple fanboi from buying his or her new shiny.

-

and tells them to keep their money overseas because it's neither wanted nor welcome here.

He'll tell them their money isn't welcome here? Oh yeah, that'll happen. Absolutely fer sure.

Re:Google, Motorola, Intel . . .

[__aaclcg7560]

They should invest in the US by building a fucking factory here.

Apple is building a dongle factory in the US.* That should make you happy for an hour or two.

https://thisshouldbethenews.com/2016/11/30/apple-is-building-a-dongle-factory-in-the-united-states/

* Fake news. But, hey, this is Slashdot.

Re:Google, Motorola, Intel . . .

[alvinrod]

Part of the issue is that the U.S. has one of the highest corporate tax rates in the world. If it were lowered, companies would probably be more willing to bring back money or not try to store it overseas because there would be no financial advantage towards doing so. Even the Nordic countries that are often regarded as having the best social safety nets (or even outright referred to as being socialist, albeit by silly people who don't know what socialism is) have lower corporate tax rates that are more in line with the rest of the world.

We probably wouldn't be having this conversation if the U.S. had similar rates to the rest of the world.

Re:Google, Motorola, Intel . . .

[PopeRatzo]

1) money will come back into the US and help our economy

It's unproven that money being shifted from an overseas bank to a US bank will "help the economy".

In fact, if it comes back and ends up in the hands of a few or used for one company to buy another it could very well hurt our economy.

Further, it's not "the economy" that needs help. It's people. And for the past 35 years, there's been little proof that helping the former necessarily helps the latter.

Re:Google, Motorola, Intel . . .

[Anonymous Coward]

> Part of the issue is that the U.S. has one of the highest corporate tax rates in the world

I'm not sure where this assertion comes from.

In 2013 Microsoft had reported income of $23.2 billion, but with a federal tax liability of $3.11 billion only paid an effective federal tax rate of 13.4 percent. That's much lower than the top statutory rate of 35 percent for corporations per wikipedia.

As someone who has made (modestly) from 50k to over 100k in my lifetime, I have only paid taxes in excess of my returns 0 times. I really don't understand how people believe corporations are treated badly in the US, given the legalized legislative bribery and SCOTUS decisions.

Personally, I've paid the federal and state (California) in excess of my returns, maybe 2 or 3 times in decades. I just don't understand how people are in such denial of reality. Do you go the HR Block for your tax preparation?

Re:Google, Motorola, Intel . . .

[Anonymous Coward]

Lowering? Lowering below 0.005%? Because that is what Apple is getting "in the rest of the world" (read Ireland). The way corporations work, they would never choose higher tax rates. Where is the profit in that?

Re:Google, Motorola, Intel . . .

[gtall]

Trump...business savvy? Errrr...3 or 4 bankruptcies, no U.S. bank will loan to that deadbeat, the word in business is to get your money up front if you deal with Trump. I think the appellation Sgt. Bilko is more apt.

Re:Google, Motorola, Intel . . .

[MrSteveSD]

If it were lowered, companies would probably be more willing to bring back money

It doesn't seem to matter how low you set it, they always try to avoid paying it. Companies who moved to Ireland for their low corporate tax immediately started avoiding that too.

Re:Google, Motorola, Intel . . .

[PopeRatzo]

Or Texas which has been doing better than California for the last twenty years.

I'm living in Houston now, so I can have an opinion on the "Texas miracle".

It's horseshit. First, Texas is not "doing better than California". Second, one of the ways Texas has attracted businesses and jobs is by deregulating and lowering taxes. But see, those chickens are starting to come home to roost. The real economic engine of Texas is the Houston/Gulf Coast area which had a big boom when gas was $4/gallon. At $1.85 (which is what I paid to fill up earlier tonight), there are a lot of oil folks out of work, which is hurting everything from trucking to local businesses like restaurants, drug stores, groceries, etc. The big boom in Houston now (and the reason that Houston is still the economic driver for all of Texas), is health care. We have the best medical centers and medical schools around and are building more. And even though Texas is a low-tax state, the state makes up for it by loading up its citizens with fees and licenses and surcharges galore.

By the way, Houston is a liberal city. Blue as blue can be. It's got more in common with Austin and San Antonio than it does in more backward places like Dallas-Ft Worth or the panhandle. Hell, until recently, the mayor of Houston was a lesbian. Think about that. A lesbian mayor in Texas. Up in Dallas, they'd force her into a re-education camp and treat her with electric shock and the Bible.

Without Houston, Texas would be sucking as bad as Kansas, which has the worst economic trend in the United States thanks to one-party Republican control of Kansas state government.

Re:Google, Motorola, Intel . . .

[PopeRatzo]

Republican dominated states (now a majority) have slightly lower unemployment than Democrat.

Those numbers are almost three years old. Some red states have gone into the shitter since then.

Re:Google, Motorola, Intel . . .

[PopeRatzo]

Kansas, BTW, is firmly middle of the pack on both measures. Kansas is #25 of 50 in terms of GDP per capita, and according to the Mercatus rankings, they're #27. So Kansas isn't a perfect example.

Kansas is a perfect example. Forget GSP (the state version of GDP) and Mercatus. Look at the trendlines. Since they've had this experiment in extreme trickle-down economics, they're rapidly heading into the shitter.

http://www.bls.gov/eag/eag.ks....

http://www.kansascity.com/opin...

Re:Google, Motorola, Intel . . .

[geoskd]

Compared to many countries, the United States has an educated and enthusiastic workforce.Productive workers offset some amount of taxation.

Bwahahahaha,

Haven't spent much time working outside the states have you?

Our work ethic and quality is actually pretty typical. What has always made the US an economic powerhouse is technological superiority. As that edge is slowly eroded, other nations have surpassed us in productivity, and the US will only slide further down that list as other nations advance. Trump is right in that we should do something to "make America great again". The only trouble is he doesn't have the foggiest clue how to actually do it.

Um, so?

[Geoffrey.landis]

Uh, this is the most uninteresting news ever. So, you're saying that Apple has put a lot of its spare cash into government bonds, which pay out the usual government bond interest; which are actually historically relatively low rates compared to other interest rates. This is interesting why, exactly?

Re:Um, so?

[tempo36]

Exactly. The government is paying Apple interest, but it's using the money that purchased the bonds to, ya know, do things. Just like regular folks who purchase treasury bonds as investments.

Re:Um, so?

[fermion]

I think the point is that major corporations are using US bonds as a tax shelter, and if they had paid taxes instead of investing in US debt, the US debt might not be at it's present level of 100% of GDP.

OTOH, this is kind of good news. If Trump pisses off China so that it begins to dump US public debt, it will be nice that US corporations have significant incentive to pick up the debt.

Re:Um, so?

[macwhiz]

You don't quite have it right.

The National Deficit is the difference between the money the government raises each year in taxes, and the money it spends each year. Reducing the deficit requires increasing income or reducing spending.

The National Debt is the money that the U.S. Government has borrowed to cover each year's Deficit.

And the U.S. Treasury Bond is a physical manifestation of the National Debt. It is an IOU. You give the government money now, and they give you a Bond that promises to pay you back with interest in the future.

But you're right that the story is hate-bait. Apple, having followed all applicable laws, has money overseas. It is legally using that money to help fund the country's national deficit. In exchange for offering that credit to the United States, Apple receives an interest payment, just like any other bond purchaser. Apple is not extorting $6 per taxpayer from the Government; Apple is loaning the government its money, money the U.S. Government is not legally entitled to have, and the government is willing to borrow enough from Apple that the interest payments come out to $6 per taxpayer.

Buried in the original Bloomberg article, you'll find that Apple has to send the money back overseas when they sell the bond; if they keep it in the U.S., it becomes taxable. And the interest they make on the bond is taxable. So by doing this, Apple is helping keep the government afloat by financing the Debt, and is paying income tax on the interest they earn. They could just invest it overseas, where it would do nothing for America.

Funny how the answer isn't to eliminate the deficit and pay down the Debt so it isn't necessary to sell billions of dollars of Treasury Bonds that Apple and others can buy with foreign capital—it's to tell companies that they should pay U.S. taxes on money that wasn't earned in the U.S., hasn't been brought to the U.S., and to date won't be spent in the U.S.

bonds? really? bonds?

[vel-ex-tech]

Oh good grief. That's how bonds work. That's Apple investing in the US.

I'm furious!!!

[Anonymous Coward]

Apple deserves a lot more than that!!!

Yawn

[mccrew]

And probably more to the communist government of China, another major holder of US Treasury securities.

So other than "the rich keep getting richer", is there a point here?

Apple lent $20,000 to every taxpayer

[Anonymous Coward]

Hey, you can spin a financial operation both ways. Apple _lent_ money to the US gov by buying bonds. The US Gov paid interest in return.

You know who else we are paying? Nazis.

[SuperKendall]

Far worse than Apple being given our hard-earned money, is the fact that somewhere, sometime, a real life Illinois Nazi has bought a government bond. Who knows how many DECADES we taxpayers have been paying these loathsome groups?

Clearly what the government needs to do to cut off the funds to monsters like Apple and Nazis is default on all government bonds today and declare no more will we be paying anyone these ill-gotten gains labeled with the seemingly innocent moniker "interest".

Re:You know who else we are paying? Nazis.

[sh00z]

I hate Illinois Nazis.

And?

[Merlisk]

And?

The real news is that we in the US can’t control our spending, and we’re issuing bonds like toilet paper to fuel our entitled attitude. And, oh, if Apple didn’t buy these bonds, who would?

Re:bonds? really? bonds?

[SpankiMonki]

That's Apple financing US deficits.

FTFY

Re:Ummm $6 per person?

[Rockoon]

It says $6 per taxpayer.

Politely disagree

[s.petry]

I think it's a rather interesting article, but not from the slant given. Apple buys US Treasury bonds, like many companies do. The US Debt is massive, and at least this is one way we get to see the actual impact of paying this debt.

I would find it more interesting to see this tackled as a "Fix the debt" problem. The fact is, this is not a "US Tax Payers give Apple money" issue. The US pays out money to ALL treasury bond purchasers at the same rate. People with more money to pool will obviously get more in payments.

$6?

[93 Escort Wagon]

I've paid them a heck of a lot more than that...

Fake news

[slapout]

Headline should read: "Apple loans U.S. Government money"

Dumb

[galabar]

I've never actually bought an Apple product and I certainly don't consider myself an Apple "fanboy." However, this article is just dumb.

There are a lot of good reason to hate on Apple's

[rsilvergun]

tax evasion schemes. This is not one of them. I often wonder if these sorts of stories are an attempt by mainstream media to go after 'safe' financial targets. They can't do real journalism against our corporate overlords because, well, those are their bosses. Hell, look what happened to Gawker when they went after a member of the ruling class (Thiel, not that jerk Hogan). Dead before they hit the ground, I tell ya.

Re:Apple PAYS for your SS, Medicare, Welfare and W

[roman_mir]

retard - government bonds are the risk free interest for when all other options are maxed out for their risk

- retard is he, who believes that government bonds are risk free rather than being most risky assets today, in a country that lives on borrowed time.