Apple, Microsoft and Google Hold 23% Of All US Corporate Cash Outside the Finance Sector (geekwire.com) 166
An anonymous reader writes: Apple, Microsoft, and Google are the top three cash-rich U.S. companies across all sectors of business, not including banks and other financial institutions -- holding a combined $391 billion in cash as of the end of 2015, or more than 23 percent of the entire $1.68 trillion held by the nation's non-financial corporations. Apple leads the pack with $215.7 billion in cash, followed by Microsoft at $102.6 billion, and Google at $73.1 billion. The numbers are documented in a new report from Moody's Investors Service that shows an unprecedented concentration of cash in the tech sector. For the first time, the top five companies on the Moody's cash ranking are tech companies, with Cisco and Oracle following Apple, Microsoft, and Google. Technology companies overall held $777 billion in cash, or 46 percent of the total cash across all non-financial industries.
Dupe. (Score:2, Informative)
Meet the new Slashdot, same as the old Slashdot.
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Maybe (Score:4, Funny)
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They should donate .001% of that to my beer fund.
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Wait a minute... (Score:2)
Hold on. This is the tech sector. Perhaps they ment "cache". The tech sector is holding a lot of cache.
Economics of corporate cash hoarding? (Score:4, Interesting)
Are there any longer term data on the nature of their cash holdings -- ie, has this amount increased over time or is it fairly static?
I'm also curious about the economic impact of cash hoarding like this. Presumably having this much capital tied up in short-term non-working assets is suboptimal in a macroeconomic sense.
My understanding is that it mostly gets parked in high liquidity accounts and instruments, and that even banks have begun charging negative interest rates on large deposits because the short term nature and liquidity demands prevent them from being able to use it as capital.
I'm also curious how shareholders feel about this. It would seem kind of obnoxious for a corporation to hoard cash that could be paid out as dividends. Obviously some amount of cash (even relatively large) is a good idea for future investments and acquisitions, but maybe not at the levels shown here.
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I'm also curious about the economic impact of cash hoarding like this. Presumably having this much capital tied up in short-term non-working assets is suboptimal in a macroeconomic sense.
I strongly doubt that they're in non-working assets. I don't know about the others, but I know that Google aggressively invests its cash holdings, and gets a nice rate of return.
My understanding is that it mostly gets parked in high liquidity accounts and instruments
Not so liquid, I think. Oh, I'm sure there's some amount that's highly liquid, but it would be foolish to keep all of it in such instruments, because the people managing this money know that there's no way it will be needed on short order. In fact, most of it can't easily be used to purchase companies or expand operations because th
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I strongly doubt that they're in non-working assets. I don't know about the others, but I know that Google aggressively invests its cash holdings, and gets a nice rate of return.
My assumption is that the term "cash" is used to denote a specific asset class, i.e., highly liquid holdings of actual cash balance accounts or extremely liquid instruments like short-term T-bills.
Assets held as working, long-term investments aren't really all that liquid and I wouldn't necessarily call them "cash", especially if converting them into cash requires an investment bank or market-maker to buy the securities or some kind of longer time horizon to convert them to cash.
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My assumption is that the term "cash" is used to denote a specific asset class, i.e., highly liquid holdings of actual cash balance accounts or extremely liquid instruments like short-term T-bills.
My understanding is that corporate balance sheets include anything that isn't a business-related asset in "cash".
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My understanding is that corporate balance sheets include anything that isn't a business-related asset in "cash".
That is not quite correct. Here [google.ca] is a quick way to get at Google's balance sheet. As of April 31, Google has about $75 million in cash, cash equivalents, and short term investments (US GAAP - will expire, mature, or be sold within one year). Bean counters commonly refer to those three together as "cash". This article has used that shorthand, but reported the cash from December 31 of last year.
One counter-example to a non-business asset outside the "cash" umbrella is long term investments.
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When corporations pay less tax, real people have to pay more tax to cover the shortfall.
Real people pay it either way. One way they know about it, the other they don't.
We need to raise corporate tax so that real people won't have to pay as much tax.
You mean, so people won't know they're paying as much tax. The prices on all the stuff they buy will go up and their wages will go down so the corporation can pay the taxes.
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Corporate taxes come out of profits so prices don't rise (because of all of that wonderful free market competition) unless the corporation has a monopoly (which the government should prevent).
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Corporate taxes come out of profits so prices don't rise (because of all of that wonderful free market competition) unless the corporation has a monopoly (which the government should prevent).
On the off chance that you actually believe this... Corporations are not charities. Those profits are the entire reason that they are in business. Reduce the profits and some of them, the marginal producers, will decide it's not profitable to continue, thus reducing the overall supply. If you reduce the supply without changing the demand, there isn't as much to go around, and prices increase. (Or you institute price controls and get shortages and rationing, which is worse.)
The net effect is that taxing corp
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Very odd logic... do you have a newsletter?
I am really not concerned about the profits of corporations. They tend to take care of themselves.
I don't care if a corporation decides to stop investing, producing or even goes out of business. They are just sucking money out of us and it's not worth it if they don't pay taxes.
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After-tax profit margin is a financial performance ratio, calculated by dividing net income after taxes by net sales. A company's after-tax profit margin is important because it tells investors the percentage of money a company actually earns per dollar of sales. This ratio is interpreted in the same way as profit margin - the after-tax profit margin is simply more stringent because it takes taxes into account.
http://www.investopedia.com/te... [investopedia.com]
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Corporate taxes come out of profits so prices don't rise (because of all of that wonderful free market competition) unless the corporation has a monopoly (which the government should prevent).
Nope, they don't come out of profits. There's a return rate that corporations have to achieve to attract investment, to have good bond ratings, etc. What this rate is varies by market segment (roughly correlated with segment risk), but there's also a sort of overall norm; companies either provide that rate of return or they fail, get bought out, split up, etc.
When you increase taxes you don't change any of that, you just force companies to adjust. In the short term their after-tax profit margin will take
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Corporate taxes are paid on profits. No profits, no taxes.
Corporations try to maximize profits and pay less in taxes.
Lots of ways to maximize profits but the market (for labor, materials, prices, regulation, etc.) places limitations on their expenses and their prices.
Companies are always trying to increase profits. They constantly try to cut expenses and increase prices. Taxes are a part of doing business. If you can hide your profit overseas, that will increase profits.
When you increase taxes, it will lowe
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Corporate taxes are paid on profits. No profits, no taxes.
Which part of that don't you understand?
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Except our corporate tax is already really really high and no large corporation realistically pays it. That's kinda his point. It's an ineffective way of taxation. Taxing an entity that doesn't have a physical body becomes really really hard and there are so many complicated unintended consequences. Realistically what you want is to tax the *shareholders*. Because they live in the US (for the most part) and can't just dodge taxation by "moving" virtually to Ireland like a corporation can.
Corporate income ta
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Rich people don't pay taxes either. They hide their money in offshore accounts (just like corporations).
The solution to corporate loopholes is to close them (but not likely since they control the politicians).
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Rich people don't pay taxes either..
And yet, the top 5% of taxpayers pay 57% of the US income taxes. (the top 1% pay 35% of the income taxes)
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Considering that the top 1% have 50% of the wealth and the top 5% have 72% of the wealth, they are not paying enough taxes. They are not paying their fair share. They are getting a free ride on the backs of the rest of the taxpayers.
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Corporations only pay tax on their profit after expenses and deductions, etc. whereas real people have to pay tax on all of their income before expenses. Doesn't seem fair. It's just another way to transfer money from poor people to rich people.
But there are plenty of non-rich people who hold a stock portfolio (for retirement) and their returns are lowered by the corporate income tax.
Without an income tax you could directly tax rich people on the capital gains & dividends at a "rich people rate" and dir
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Except that the top 10% of rich people hold 74% of assets so while I know that you are really concerned about "the little people", taxing corporate profits and dividends essentially taxes rich people which should be the point of the exercise. Tax rich people more. Tax the rest less.
Fortress balance sheets (Score:2)
Presumably having this much capital tied up in short-term non-working assets is suboptimal in a macroeconomic sense.
No need to qualify that statement. It definitely is sub-optimal in a macro and micro economic sense. Basically it means those companies have no idea how to make productive use of that capital.
I'm also curious how shareholders feel about this.
I'm not a shareholder in these companies but I would have mixed feelings about it. On one hand having a fortress of a balance sheet makes investing in the company extremely safe. Even if Apple were to stop selling iPhones tomorrow, they literally could buy another Fortune 100 company in cash if they needed to. Wit
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I think the articles I've read tried to chalk this up to the slow growth of the economy generally. There just aren't enough productive investments to put the money into.
Although that seems kind of a thin excuse; these firms aren't investment banks and presumably seek profitable growth through their principal business function, not investment in capital markets.
I think I mostly agree with you that it represents a kind of deficit in terms business growth. Rather than investing in business growth through new
The problem is the margins (Score:2)
I think the articles I've read tried to chalk this up to the slow growth of the economy generally. There just aren't enough productive investments to put the money into.
I don't personally subscribe to that theory. I think there are plenty of productive investments available today. Arguments about the economy being slow are fig leaf excuses. Frankly what better time to buy at a good price than when prices are depressed by economic conditions? No, the problem is something else.
The problem is that there are not a lot of huge investments available that will return 25% net margins like Apple, Google and Microsoft are accustomed to. Any of them could buy any but a h
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Does Apple pay enough dividend to make the difference between 5% and 25% meaningful to shareholders, or are we just playing the stock price appreciation game where shareholders don't give a shit about fundamentals as long as the stock price increases?
Pardon my cynicism, but I think corporations should have to provide compelling reasons to hoard cash on this scale or pay dividends. This just seems like lazy management, coasting on high profit products while failing to do the hard work of business expansion
Margin pressure (Score:2)
Does Apple pay enough dividend to make the difference between 5% and 25% meaningful to shareholders, or are we just playing the stock price appreciation game where shareholders don't give a shit about fundamentals as long as the stock price increases?
Apple currently has annual earnings per share of $9.22 and pays $1.98 in dividends per share. That is roughly 20% of their earnings going to dividends. Plus they are doing some stock buyback as well. So if margins were to drop by to 5% and all else held stable, they would basically be paying out all of their earnings in dividends. So yes, the margins matter. A lot. But that's a bit over simplistic. More realistically they could find some businesses with 10-15% net margins and buy those. Then their
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not a lot of huge investments available that will return 25%
What if they have a long term outlook and preparing themselves for the next 25% margin industry?
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Dupes (Score:2)
So? (Score:3)
What does that mean? What is your intent here?
Based on my accounting background, I would say this is bad. But probably not for the same reasons as others. This means that Apple, Google, and Microsoft are not doing a great job running their business. Its not a "bad job", just not a great job. It could just mean that most of the other companies are reinvesting their cash (and equivalents) in expansions, buildings, upgrades, or giving it out as dividends & salaries (think Walmart, Publix, ConocoPhillips, Boeing, Samsung, Tesla, etc).
Too much cash normally means the owners are playing it too safe and not investing enough or could invest in higher risk & more profitable ventures. I doubt these guys are hording cash to buy each other.
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So a company that has, say, $100 million offshore, and who would expect a $35 million tax hit by bringing it back, should be able to do so for free, if it returns 10% of that to shareholders as a dividend, which some while pay 15% on, while many others (pensions, IRA's, 401k's) will pay nothing on at all.
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Which is probably why we should:
1. Make dividends tax-deductible
2. Raise dividend tax to income levels
That way it's almost identical to payroll taxes, with the exception of SS/Medicare contributions, which we should probably find a way to have dividend earners contribute to as well.
Taxing an ephemeral entity like a corporation is like trying to catch a ghost; tax the people who own and benefit from said corporation.
One time tax amnesty doesn't work (Score:2)
Eliminate the business tax on repatriating funds if the business distributes 10% of the repatriated funds as a one time dividend to shareholders.
One time distributions won't solve the problem. It just creates an incentive to wait for the tax amnesty the next time. They've actually done a one time tax amnesty before with predictable results. No, you need to actually change the laws so that it is economically attractive to repatriate the funds. Could be done by eliminating corporate taxes and taxing all income (corporate or personal) at the personal level like they do for S-Corps. (I'm overly simplifying here but you get the idea) That way the c
It's getting better (Score:2)
Dupe (Score:2)
We just had this story, more-or-less:
https://news.slashdot.org/stor... [slashdot.org]
The headline's an improvement on last time, though.
desperately need to re-do our taxes (Score:2)
Actual story (Score:2)
"A large portion of tech company cash is held overseas, highlighting ongoing roadblocks corporate tax reform that would help companies repatriate those funds. Moodyâ(TM)s estimates that Apple, Microsoft, Cisco, Google and Oracle have $441 billion overseas, representing 87 percent of their cash."
Because the US is one of the few countries in the world that taxes income of corporations earned outside the US. Change the rules to what almost every other country uses (income is taxed in the country where it
Re:Why not include the financial sector? (Score:5, Funny)
Why not include the financial sector in this analysis?
Because Apple, Microsoft, and Google would only hold 2% of all US corporate cash, and we would feel bad for them.
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Well it is kind of like noting banks "have" trillions of dollars in sales when it is housing sales funded by deposits. Or currency exchange, amounting to a trillion a day in "product". That's not the real size of the market which is just a sliver of that.
The market is pushing around other peoples' money, not the value of the money itself.
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It is idiot conservatives who don't want changes to the tax laws who brought Tim Cook before congress to testify on the matter, trying to shame him in to doing something that he is not legally obligated to do, thanks to their shady tax laws. The liberals want them to pay more taxes, they don't care how it gets done, the conservatives don't want to change taxes because it works for their constituents, of whom most technology companies are not.
There comes a time when we need to divorce ourselves from politica
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There comes a time when we need to divorce ourselves from political parties and demand a problem gets fixed.
Or wait until 2030 when all the baby boomers are retried, retirees outnumbers workers (smaller tax base), and two-thirds of the federal budget goes to Medicare/Social Security. Taxes will have to go way up to pay for everything else. Politicians of all stripes won't be able to kick that can down the road anymore.
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Or wait until 2030 when all the baby boomers are retried, retirees outnumbers workers (smaller tax base), and two-thirds of the federal budget goes to Medicare/Social Security.
We already spend 57% of the budget on Medicare + Social Security + federal pensions. The politicians are competing to make the other party announce the inevitable need to fix this problem. Kudos to Obama for at least talking about it as a problem, but no one is showing any leadership here, as the voters are sure to kill the messenger.
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Or... they would bring it back if they couldn't keep it offshore and continue to defer the taxes. Just because you think lowering the corporate tax rate as an unambiguous ideological 'good', doesn't mean that's the only solution to the problem. We can argue about the appropriate tax rate to apply to offshore earnings - after we solve the idiocy of calling earnings artificially applied to a dummy office in Ireland 'offshore earnings' deserving of different tax treatment in the first place. Supporting that
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...taxes you don't like, that is ;-)
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...taxes you don't like, that is ;-)
If only people could have some say in what their tax money is spent on!
"None of my tax $$$ is to be spent on hookers and blow"
"None of my tax $$$ is to be spent funding overseas military interventions"
etc
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Classical liberals. Those that apply the label 'liberal' today are socialists and oppose liberty.
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We have more rich than transgender people. Now we are having common sense bathroom laws changed by Obama to accommodate them.
So clearly it is all right to do something for a small minority at the detriment of everyone else.
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Because the Swiss won't let us count it?
Didn't know the Swiss were in charge of Panama
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"Why not include the financial sector in this analysis? I'm sure it holds enough corporate cash to make the tech sector seem insignificant."
Because it probably doesn't exist.
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Because so much of the cash that the financial sector holds on their balance sheets isn't their cash at all, but their customers money which they are being lent (by that customer opening an account with them), where as the cash on Google, Apples and Microsofts balance sheets represents their cash and their cash alone.
Re:This is why we had a 90% tax percentile (Score:5, Insightful)
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"confiscatory tax rate"
Thus providing additional evidence that taxes, all of them, are regressive. The poor cannot avoid taxes, and the rich can simply move their money out of reach of government. It is NOT evil to avoid paying taxes using every legal means necessary. It is evil to assume government has a right to your money via Taxes.
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Sorry, but I'm now too old and too experienced with actual business to let this "assumed conceptual buy-in" to pass without noting it.
Using terms like "burned" (or for that matter arguments based on "risk") simply are not the same meaning as applied to the financial sector or successful high-tech companies, as to 99% of the readership you are addressing.
When a Google gets "burned", that means potentially the stockholders end up moving from rich to slightly less rich. For the middle class, "burned" means, a
Those damn thousandaires (Score:5, Insightful)
> When a Google gets "burned", that means potentially the stockholders end up moving from rich to slightly less rich. For the middle class, "burned" means
Those damn stockholders, rich people saving up tthousands of dollars in their 401k. Fuck them. They don't need to retire, to have hundreds of thousands of dollars when they're 72. Tax the hell out them, they can eat dog food when they're old.
You're attempting to draw a distinction between "stockholders" and "middle class". You're missing the fact that "stockholder" means "everyone over 30 who has half a clue". Stockholders ARE the middle class, all middle-class people who aren't ignorant or irresponsible invest for retirement. One day, not too long from now, you'll be old, 60,70,80 years old. You won't be able to work like you do in your twenties. That means you'll need enough savings to last you for 20 years or so - a million dollars or more. How the hell do you save up a million dollars so you can eat and pay bills for 20 years when your retired? You put the first 10%-15% of your income into mutual funds while you're working; you become a stockholder.
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Thank you for posting this, and saving me the trouble of doing so.
Yes, pretty much all of us are "stockholders" in quite a few companies. I certainly am, what with 401K's, IRA's, wife's 401Ks/IRAs, plus the beer stock I bought last week, just because I didn't own any beer stock....
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Again, though, it ends up being a false equivalence due to scale. A Bill Gates or Eric Schmidt in no case are "burned" in the same sense as someone having a questionable path to a livable retirement based on stock or mutual fund investments, those investments being a tiny fraction of the scale.
There is no way such people can be "burned" in a practical personal sense by a financial down
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So what? About half of Americans are stockholders. You've named 2 of over 100 million who won't be burned. What's your point again?
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If you think any financial issue the fact one owns some relatively-marginal amount of stock, they are equivalently "burned" by a negative financial policy or outcome, you are precisely a successful result for the mental hijacking noted earlier.
I do admire your optimism, though, that those 100 million are immune.
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I think you read my post backwards, for you have come to the opposite point I was making. "Stockholders get burned" is the same as "most retirees get burned" (sure, a few people are so rich they don't get burned, but that doesn't make much difference here).
Schmidt 2%, Gates 4% (Score:3)
> A Bill Gates or Eric Schmidt in no case are "burned" in the same sense
You're confusing high-level employees vs stockholders (retirement / home-purchase savings). 2% of Google is owned by Eric Schmidt. 4% of Microsoft is owned by Bill Gates. The vast majority of stock is owned by middle-class people saving up to buy a home, send a kid to college, or retire.
You actually have a very, very important choice to make. You can do what is easy for now and very painful later, or you can do what takes a bit o
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There is no "whining" here, nor am I personally concerned about my financial state. As I said at the outset, the argument can indeed be made that such financial disparities are necessary, or even a net benefit. I am not making a stance on that here, I'm arguing toward using valid criteria to make such determinations.
Avoid the unnecessary, inapplicable, and off-point ad hominem. At issue here is whether the current trend to automatically agree that, almost axiomatically, anything good for the wealthy is b
You make a quick 30% and invest in an index fund (Score:2)
> Every single person I know that owned stocks were all bought back up by the company, and this is happening much more rapidly than one would think.
Do you work front-line support at Dell, and mostly only know other Dell employees? Taking a company private is relatively rare, though it is happening more often since Sarbanes-Oxley increased the cost of being public.
Anyway, when a company goes private, stockholders are generally paid about 30% more than the market value of their shares (they wouldn't vote
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I seriously doubt that even if the corporate income tax were 10%, it'd incentivize companies to repatriate cash.
The real problem with voluntary repatriation is that your competition doesn't have to do it. If both of you have 10B in assets overseas and only one of you brings it into the US, your competition has more cash than you to invest and/or leverage.
This is why all this "Apple/Google should pay taxes outcry" is a bunch of empty BS. The *only* effective way to have companies pay corporate income tax is
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The *only* effective way to have companies pay corporate income tax is to fix the tax laws. That way, everyone's playing by the same rules and it doesn't hurt a company competitively to repatriate cash. This is a Congress problem, not a corporate problem. ... That being said, the current rate of US corporate income tax is kinda ludicrous; it's the highest in the world.
Exactly, and the right way to fix the tax laws would be to eliminate corporate income taxes altogether. Treat dividends and income from sale of shares as ordinary income (after deducting the cost basis, of course), and leave the rest alone. Taxes should not levied against intermediaries—no taxation without representation, etc. The voting citizen should be able to see exactly how much they earn from their investments before taxes, and how much is being taken for public use.
While we're at it, individual
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I seriously doubt that even if the corporate income tax were 10%, it'd incentivize companies to repatriate cash.
The real problem with voluntary repatriation is that your competition doesn't have to do it. If both of you have 10B in assets overseas and only one of you brings it into the US, your competition has more cash than you to invest and/or leverage.
This is why all this "Apple/Google should pay taxes outcry" is a bunch of empty BS. The *only* effective way to have companies pay corporate income tax is to fix the tax laws. That way, everyone's playing by the same rules and it doesn't hurt a company competitively to repatriate cash. This is a Congress problem, not a corporate problem.
That being said, the current rate of US corporate income tax is kinda ludicrous; it's the highest in the world.
What seems odd is that human beings, as opposed to corporations, who are US citizens and who live and work in other countries, have rather onerous requirements on reporting their income to the US and paying tax on it. It is so onerous that the US demands that overseas banks report earnings from their customers who are US citizens, actually driving some overseas banks to tell US citizens that they are not welcome as customers.
And yet US corporations can pretty much ignore this?
WTF? If I were a US citizen I'd
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And yet US corporations can pretty much ignore this?
Why would you call a company incorporated in Ireland a "US corporation?" That's like saying a German citizen is a US citizen. Brands that do business all around the world and are comprised of companies chartered and operated out of multiple countries aren't anything like US citizens. Regardless, if you think that being a publicly traded company means you're not dealing with incomprehensibly onerous reporting requirements and scrutiny, then you need to spend a little time working with such a company and wat
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And yet US corporations can pretty much ignore this?
Why would you call a company incorporated in Ireland a "US corporation?" That's like saying a German citizen is a US citizen. Brands that do business all around the world and are comprised of companies chartered and operated out of multiple countries aren't anything like US citizens. Regardless, if you think that being a publicly traded company means you're not dealing with incomprehensibly onerous reporting requirements and scrutiny, then you need to spend a little time working with such a company and watching what they go through. The real tax they pay is the gigantic (non-productive) cost of compliance in that regard. Untold billions every year, chasing itself around in circles, with only lawyers and CPAs benefiting (well, and the car dealers and realtors that have those people as customers).
Listed on their stock exchanges? But I'd think listing on an exchange in a country is a way for a corporation to declare their national citizenship. As with actual human people, you can have dual or multi-nationality. Thats why they can be multinationals.
But my main issue is with the deplorable situation that US citizens are put in, and their banks too! No other country does this, except North Korea.
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A. Lay off some people
B. Raise prices by 7%
C. Convince people to buy 7% of your product
D. Lower your NRE costs by 7%
(*)If the company does not maintain a 6% profit, people will dump stock and the value of the company goes down
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Academic distinctions about cash (Score:2)
The "cash" they hold isn't held as actual cash, it's just very liquid investments.
A distinction without a real difference. You'll see it on the balance sheet as "Cash and Cash Equivalents". For all practical purposes it is cash and it's well understood that they don't actually have a pile of bills sitting in a vault somewhere. (or at least we should hope they don't)
Even if they did hold it in "cash" it wouldn't be cash, it would be a current account balance with a bank.
Again, largely correct but also an unimportant distinction. The cash is theirs to withdraw whenever they want it. The fact that it is held in a bank or held in coffee can in the back yard is something of an academic disti
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Banks have liquidity requirements.
If 100,000 people deposit $10,000 in a bank, the bank can reasonably assume that they won't all demand all their money at the same time.
If a single company deposits that same $1 billion in a single account, it represents a significant liquidity risk to the bank. If the bank ties up some significant portion of that one account holder's cash as loans to other people or firms and the company decides it needs $500 million right now, the bank has to come up with $500 million.
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The "cash" they hold isn't held as actual cash, it's just very liquid investments. Even if they did hold it in "cash" it wouldn't be cash, it would be a current account balance with a bank.
That bank is VERY busy investing that money elsewhere - so the fact that they hold "cash" (liquid investments) is utterly irrelevant to whether or not that money is ACTUALLY being invested somewhere.
Not a financial expert by any stretch of the imagination but...?
I'd think shares wouldn't count, right? Because if you have a million shares and you start to sell them, the process of selling them could change the price so you couldn't really gauge how much those million shares really were worth in the beginning. Ie you can sell the shares for $10 each. So you might think those million shares means you have 10 million dollars. But say after you've sold the first 100k you can only sell the remaining shares f
Re:This is why we had a 90% tax percentile (Score:4, Interesting)
In the USA, there was never a 90% tax rate on corporate profits, even if you consider the double taxation on dividends. Besides, these are cash holdings, meaning that the companies already paid their f***ing taxes in the process of acquiring the cash.
These companies aren't obstructing economic growth. The Federal Reserve has effectively destroyed the interest rates on cash and cash equivalents for the express purpose of forcing people into more risky investments. If there were positive returns to be had by increasing capacity or making new investments, these companies would most certainly be taking advantage of them. It's not like there's a surplus of new and promising business ventures out there which are starved for cash.
Government policy has ground this economy to a halt by rewarding "financialization" and trying to cure a debt-based recession by doing everything possible to increase outstanding debt.
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Based on your logic all sales taxes and their equivalents should also go away, after all all our money is taxed twice minimum. First we pay taxes when we earn our paychecks then we have to pay tax on those already taxed dollars when we purchase goods.
WAY more than twice. (Score:2)
You earn $100. You pay $30 tax. You pay plumber $70. He pays $21 tax, so YOU get $49 worth of plumbing. The work value of your money at a 30% tax rate is less than 50%.
But wait, there's more!
Plumber pays $49 to electrician. Electrician pays $15 in tax. Plumber gets $35 worth of electrician's service.
So far (and this keeps going) $66 of your $100 has gone for taxes.
Income tax isn't so much "regressive" as it is a near-perfect vacuum.
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No. 30% of your money has gone for taxes, 30% of the plumber's money has gone for taxes, and 30% of the electrician's money has gone for taxes.
Once your money has gone to the plumber, it's the plumber's money, not yours. You' don't get to double-count the taxes paid so that everyone magically has a 66+% tax rate instead of a 30% tax rate.
In effect, your scenario has a GDP of 100 + 70 + 49 = $219 dollars of income and tax revenue of 30 + 21
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You tell me: the plumber has to pay his $21 (or whatever. It's just a reference number so you can follow the money.) So exactly HOW is he going to give you $70 worth of service when he only has $49 income from it???
Oh, right. He isn't.
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He's not, he's going to give you ~$49 worth of service while paying ~$21 for his military defense, surface water protection, the public road network, his parent's social security and medicare coverage, etc.
Because those things are not free, but instead cost about 26.9% of GDP [wikipedia.org].
Again... shocking th
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And you should learn to recognize example numbers used to demonstrate a point when you see them. Cheers.
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Example numbers can't save a point that's idiotic to begin with. US tax rate as a precentage of GDP is 27% [wikipedia.org], not a near perfect vacuum no matter how you slice it. You can't add transfer taxes together like that.
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"Cash" means investments, not $20 bills (Score:3)
The companies don't have a big room with stacks of $20 bills. "Cash" in this sense means investments they can sell quickly.
If Musk OWNS battery research lab and factory, selling that portion of the business might take a year or two. That's considered a long-term, illiquid investment. On the other hand, if Google finances the same type of battery R&D by buying 10% of the stock in a separate battery technology company, they can easily sell that stock within a day or two. That's called a liquid investm
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Your assumption is that the government has a right to the money, at whatever tax rate YOU think is "fair". I would suggest to you, that all taxes are regressive, as the rich can always pay to avoid taxes, while the poor and working classes cannot. Government doesn't have a right to people's hard earned money.
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How many poor and working class people are benifitting from Apple? Lots. Access to the entire worlds knowledge at one's fingertips. And while I understand you said "stock" you're ignoring the obvious. Every person who has access to an extra 97.90 (today's closing price) can benefit from Apple stock. It is their choice, as they have every opportunity to do that (instead of buying 1/2 a pair of Nike's)
OR they could buy six shares of AAPL instead of that iPad.
So, what planet am I from? Earth, grounded in reali
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I am not pretending to be anything.
All I said was Taxes are regressive. Period. I can point to a thousand examples of rich avoiding taxes, while everyday people are stuck with them. They are regressive.
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Maybe, some poor Bernie supporter thinks that Government has a right to all of the money earned by people, and thus is entitled to it via taxes, and can't understand why people would do anything to legally avoid paying confiscatory taxes.
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Actually, it is "billions and billions" that are homeless or hungry around the world. Your use of national lines is quite endearing, but the only way to solve this problem is a worldwide socialistic dictatorship, with confiscatory taxes on everyone. Then the rich can't pay to avoid taxes, and everything will end up being "fair". That is the goal, right?
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"How to detect a person full of shit by the spectrum of limited words that retard can use"
Otherwise known as an Anonymous Coward.
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Yep. And when they are then out of money, do we just move to the next company? Because that's not exactly something you can do multiple times to a company.
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Hmm why not? This is parked cash, from profits, its not the money they use in their day-to-day operations. Presumably if you bleed Apple dry off its treasure it will be royally pissed off, but it will not affect their ability to survive.
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Your comment is a dupe
https://apple.slashdot.org/com... [slashdot.org]