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Apple, Google and Microsoft Are Hoarding $464 Billion In Cash (cnn.com)
Apple, Google and Microsoft are sitting on a mountain of cash -- and most of it is stashed far away from the taxman. Those three tech behemoths held a total of $464 billion in cash at the end of last year, according to a Moody's report published this week. From a report: Apple alone had a stunning quarter-trillion dollars of cash thanks to years of gigantic profits and few major acquisitions. That's enough money to buy Netflix three times. It's also more cash than what's sitting on the balance sheet of every major industry except tech and health care. All told, non-financial U.S. companies studied by Moody's hoarded $1.84 trillion of cash at the end of last year. That's up 11% from 2015 and nearly two and a half times the 2008 level. Roughly $1.3 trillion -- 70% of the total -- is being held overseas, where the money isn't subject to U.S. taxes. Apple, Google owner Alphabet, Microsoft, Cisco, and Oracle hold 88% of their cash overseas. Moody's said the tower of money stashed abroad reflects the "negative tax consequences of permanently repatriating money to the U.S."
Don't know about the biggest and most complicated but that's another subject.
As far as US citizens working abroad, they do give you credit for any tax paid to a foreign government and they do have a rather large base exemption before tax kicks in.
What makes you think that you can take the benefits of being a US citizen and not pay any taxes?
I don't read your sig. Why are you reading mine?
I work in Private Equity and have experience with this type of stuff. Honestly in my opinion, there's nothing to see here other than a great case for why the US corporate tax rate should be lower. There are two separate concepts worth discussing. One is money that was MADE offshore and remained offshore, which I don't think anyone should take issue with. That money is used to fund international operations and international acquisitions (and is invested--I recall reading that Apple runs the world's largest hedge fund via its balance sheet cash). No big-wig executive or shareholder benefits from this cash being offshore - in order for them to see any of it, it has to be repatriated, at which point it is subject to US tax. The other concept is money that was made in the US, but is treated as if it was made offshore. The way this works is generally via IP transfer. If a US company transfers its IP to a subsidiary in another country (Ireland is popular, for example), then that US company has to pay royalties to the international subsidiary as it does business. So US Co. makes $100 in search revenue, but has to pay $90 to Ireland Co. for the right to license the IP (oversimplified but that's the gist). $10 gets taxed in the US, and $90 gets taxed in Ireland, the profits remain in those respective countries. Note that when the IP is transferred to the other country, that transaction is taxable - the Irish subsidiary has to "purchase" the IP from the US, which is a taxable event that the US government receives tax income from. However, after the IP is transferred and once operations commence, this becomes frustrating for the US government (and citizens) because money that was made in the US becomes taxed in Ireland. However, even in this case, in order for US executives or shareholders to ever get this cash, the money must be repatriated, at which point it is subject to US tax. So the money ends up just staying offshore, until the company can either negotiate with the US government for more favorable tax treatment, or until it gets used for an offshore purpose. Long story short, if the US corporate tax rate was lower, we would not have this problem. Companies would not transfer IP offshore to achieve more favorable tax structures, they would just keep the money in the US. My personal opinion is that the corporate tax rate that maximizes revenue for the US is much lower than the current 35%.
Well, in normal times, financial companies don't just sit on cash. They make money by lending it out. In the last decade, I got a bit confused about whether the investment banks are actually sitting on idle assets or whether this was just a bookkeeping illusion (moving money from a Treasury account to a Fed account which somehow makes the bank's balance sheet better.) But let's put that aside for a moment.
How much cash a company has matters less than I used to think. If a company has "cash", it's not really a huge room filled with dollar bills. There are no Scrooge McDucks. That money is being used for something. Today they've got it parked in a bank and (in normal times, see above) the bank will use that to lend to other people who do stuff with it. Tomorrow they could build a building, give it to the US Treasury, or give it to shareholders, who will turn around and also use it for something. So for the economy as a whole, that money is never idle, it's always in motion. Whether Apple, Microsoft, or Google invest it directly, give it to their shareholders, or leave it in a bank to be lent out and used by someone else kinda doesn't matter.
As a result, all we're really discussing is who gets to do the investing, not whether the investment actually happens.
Just because you repeat something does not make it true. I have gotten so tired of hearing this oft-repeated line.
The line that corporations are legally bound to maximize profits is complete and utter bullshit.
This is a direct quote from the US Supreme Court: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”
Contrary to what you, and every other asshat who repeats this bullshit line, believe, the primary duty of the officers of a corporation is to the best interests of the COMPANY not the shareholders nor the bottom line.
That's it. Don't go reading anything into the above sentence, because the sentence above is the total settled case law in most of the US. The best interests of the company. End of story. Vague.. Yes.. Don't fill in anything in an attempt to make it less vague. It's vague. The Supreme Court has upheld that "responsibility". The only people charged with deciding what to do with that vagueness are the board.