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 . . .

[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.

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?

[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.

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".

Fake news

[slapout]

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