Every US Taxpayer Has Effectively Paid Apple At Least $6 in Recent Years (arstechnica.com) 267
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.
Google, Motorola, Intel . . . (Score:5, Insightful)
also to blame. Picking on Apple for this is really pretty silly. Every large multi-national company does this.
Re:Google, Motorola, Intel . . . (Score:4, Insightful)
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 . . . (Score:4, Informative)
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 . . . (Score:4, Insightful)
> 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?
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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?
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The answer isn't begging for money owed. (Score:2)
All of these are American companies benefiting from our infrastructure, workers, consumers, defense, etc.
Why aren't they simply being made to pay? Close bullshit loopholes. They want to move all their shit somewhere else? Great. Let them be a parasite on some other country.
Re: The answer isn't begging for money owed. (Score:2)
If you closed the loopholes, the corporations that actually paid for them would get upset. The only reason people are in a tizzy about Apple, Google, Amazon, and company is that they were clever enough to realize that, once on the books, the tax laws are available for anyone to use. If they'd paid their Danegeld to the appropriate politicos like Halliburton, Bechtel, Accenture (Arthur Anderson under their new name), and the like have done, there would be no issues raised.
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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.
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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.
This is not correct. The entire issue is that there is at least one country in the entire world that is willing to levy a lower rate. The problem isn't that the rest of the EU countries have lower tax rates than the US, it's that Ireland has a much lower rate. The rest of the EU has zero impact on the Ireland situation (other than ostensibly complaining about Ireland's low rates).
The other issue is that there are advantages to operating in the US. If there weren't, these corporations would simply move e
Re:Google, Motorola, Intel . . . (Score:5, Insightful)
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.
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Re:Google, Motorola, Intel . . . (Score:5, Insightful)
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.
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First, Texas is not "doing better than California".
By "doing better" I mean higher absolute population growth, higher absolute employment growth, and higher absolute GDP growth over the period in question.
Without Houston, Texas would be sucking as bad as Kansas
And California would be sucking pretty badly without Silicon Valley too.
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Like, from a newspaper or a webcite?
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Every GOP dominated state has severely failing economies. See Kansas as a perfect example.
Define "failing". Red states, by and large, have lower economic growth because they are more rural, and urban centers generate more economic activity. That's a generality, though. If you look at a list of states by GDP per capita, some red states rank very highly. https://www.wikiwand.com/en/Li... [wikiwand.com].
If you're talking about fiscal responsibility, it's pretty much exactly the opposite of what you say. The states that are on the edge of bankruptcy are nearly all blue states, while those with the healthiest gov
Re:Google, Motorola, Intel . . . (Score:5, Informative)
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.... [bls.gov]
http://www.kansascity.com/opin... [kansascity.com]
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http://ijr.com/2014/08/163622-connection-political-parties-unemployment-look-graph-judge/ [ijr.com]
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Those numbers are almost three years old. Some red states have gone into the shitter since then.
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Yes, you should make it easier for the US government to steal other countries taxes, is that what you are saying. Those offshore profits were earned offshore, so the taxes should always be paid where the revenue is generated. Not the US being and continuing to be a global economic and resource parasite.
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yup.
I can't live off my dividends of my stock portfolio, but it buys me a modest new car or nice used car every 7 years or so.
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And that's just tech.
How much have we "effectively paid" oil, pharma, and defense contractors?
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How much have we "effectively paid" oil, pharma, and defense contractors?
Also my grandmother. She bought a lot of government bonds during WW2, so she was also "stealing" from taxpayers.
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Also my grandmother. She bought a lot of government bonds during WW2, so she was also "stealing" from taxpayers.
Was she using money she had funnelled offshore to avoid paying US tax on to purchase those bonds? Probably not, because unlike corporations, the US holds private citizens liable for tax on foreign earnings regardless of whether they repatriate the funds or not.
The salt in the wound here is that Apple is making money from the interest on government bonds, which are issued to cover the shortfall in tax revenue caused by Apple avoiding paying their income tax.
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unlike corporations, the US holds private citizens liable for tax on foreign earnings
There is a $90k exemption before that kicks in. Also, any citizen can avoid the tax by incorporating, which can be done on-line in about 20 minutes for about $200.
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Blame the laws and the legislators that pass them, not the corporations who maximize their profits by acting within them.
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Generally the corporations lobby, often with hard cash, for these laws that they've written. Simple free market economics. It's expensive getting elected, corporation finds it cheaper to pay off politician to pass their laws then to compete in other ways. As long as it costs large amounts of money to get elected, corporations will take advantage.
At least in a free market, you are free to pay to get your own legislator and your own laws along with a propaganda machine to convince enough other people to vote
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Generally the corporations lobby, often with hard cash, for these laws that they've written
The Lift America Coalition [liftamericacoalition.com] (including large corporations like 3M, Cisco, Intel, Walmart, etc.) has been lobbying for a territorial [liftamericacoalition.com] corporate tax system rather than a worldwide corporate tax system, which would allow trillions of dollars of profits to be repatriated back to the US, but to date they have not been successful in getting Congress to change the corporate tax regime (which the majority of OECD countries have
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Generally the corporations lobby, often with hard cash, for these laws that they've written.
Not in this case. There is pretty much universal agreement from business and economists that our current corporate tax laws are stupid and need to be reformed, especially the extraterritorial taxation that no other country does.
The problem is that many politician do not want to be seen as "giving in" to corporations, so they just keep the rates high, and then hand out plenty of loopholes to their donors.
Donald says he wants to fix this, but Donald says a lot of things.
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For every "Apple" poster child, there are a hundred other corporations doing the same thing without the public attention.
It needs to be fixed at the legislative level, and that has apparently been impossible for the last 8 years of Democratic administration and the previous 8 years of Republican administration. Even if all Trump does is make a lot of noise and fail to deliver substantial positive change, he won't actually be performing any worse than his two predecessors.
Don't get me wrong, he looks like a
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The law exists to create a predictable playing field for business, one in which they can make elaborate plans to return gains to shareholders. Without predictable rules, there's unpredictable chaos. Can you imagine the turmoil in the stock market if corporations were only able to deliver on their promises 50% of the time and couldn't predict their profits within +/- 50%?
Successful corporations act shitty to lots of people, they screw their customers with higher than necessary prices, they screw their work
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No, the correct person to blame is ourselves for continuing to vote for people who spend massively on our behalf, in exchange for our votes.
Well, they have to borrow for this habit of ours, and that means renting this money. Be happy Apple is doing this rather than more foreign powers.
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also to blame. Picking on Apple for this is really pretty silly. Every large multi-national company does this.
On top of that, who would right-leaning Bloomberg rather buy-up US Treasury bonds?
Foreign Countries? Chinese Mega-conglomerate holding companies? Giant companies based in other countries who don't otherwise do business with the US? Iran?
Stupid, time-wasting hit-piece.
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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.
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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.
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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.
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I was comparing his business savvy to that of HW Bush, the great Republican leader who passed the 10% luxury goods tax that literally gutted the luxury boat business. I wonder if they did it just to make a point that taxes which punish the rich are bad, certainly they could have punished the rich in more creative ways that wouldn't have collapsed industries, but I don't think that was their goal.
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And Calvin Klein has hundreds of thousands of clothing designs under his name... amazing how prolific a single brand can be.
Besides, relatively business savvy isn't saying he's good, just that he's better than a lot of politician/legislators we have had in the past - which is a low bar indeed.
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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/ [thisshouldbethenews.com]
* Fake news. But, hey, this is Slashdot.
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There are 3 possibilities here:
Um, so? (Score:5, Insightful)
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?
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It's not interesting but msmash is attempting to paint Apple buying bonds which the U.S emits to pay for it's deficit as being "bad".
The depths of confusion that these Apple haters have is astounding.
Re:Um, so? (Score:5, Informative)
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.
Politely disagree (Score:3)
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
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It's interesting to hear just how much money Apple has loaned the people of the United States at very low interest rates.
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Re:Um, so? (Score:5, Interesting)
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.
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Well, if the US Federal Govt. didn't keep spending so fscking much.....more than it takes in, we'd not have the debt in the first place.
If they learned to live more within their means, they'd be much better off.
The Feds get PLENTY of tax revenue coming in each year already.
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Because some people want to spend money other people earned. Apple earned a lot. So time to imply Apple "unfairly" keeps their own money. You should support ending this "unfairness" by taking away Apple's money -- so the anointed people can spend it on themselves without the inconvenience of working and earning it.
Sideways repatriation (Score:2)
I think the point is that Apple has effectively repatriated their earnings into the next best thing to US dollars, and done it without paying taxes.
It was one thing when they hoarded cash overseas without repatriating it, at least in some ways they were exposed to some kind of foreign currency risk. But since they've bought Treasuries with it I think to a lot of people it feels like they're beating the system even further.
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I'd have to believe that would be illegal, I'm sure someone's tried to use the domestic company as a borrower and then repay using assets held overseas.
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bonds? really? bonds? (Score:5, Informative)
Oh good grief. That's how bonds work. That's Apple investing in the US.
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That's Apple financing US deficits.
FTFY
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Oh good grief. That's how bonds work.
Amen. That's exactly what I thought when I read the details of this (non-) "story".
The US government has chosen to offer these bonds for its own reasons. One might argue whether the government should be raising money this way, but they (presumably) chose to do that and offer enough of a payout to make it worth investors' time and money.
As you said, that's how it bloody works! Apple just happens to be one of the companies that has taken them up on that.
There's plenty to criticise about Apple, both with
I'm furious!!! (Score:3, Funny)
Apple deserves a lot more than that!!!
Yawn (Score:5, Insightful)
So other than "the rich keep getting richer", is there a point here?
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Biggest debt holders:
Social Security 2.786 trillion ___________ this is bogus, because it's internal to the federal government
Federal Reserve 2.461 trillion ___________ this is bogus because it's internal to the federal government
China 1.157 trillion
Japan 1.136 trillion
Mutual funds: 1.056 trillion
Office of Personnel Management Retirement 0.873 trillion __________ this is bogus because it's internal to the federal government
State and local gov'ts 0.803 trillion
Military Retirement 0.601 trillion _____
Apple lent $20,000 to every taxpayer (Score:4, Interesting)
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. (Score:5, Insightful)
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".
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or Nazis belonging to the Illinois tribe?
Are you referring to that politically motivated twist of logic known as the "Red Aryans"?
Problem is not liberal vs conservative (Score:2, Informative)
the real problem is crony "capitalism", and it happens on both sides, its not a republican or democrat exclusive. Its not a free market when the government picks winners and losers. Say what you will about the Libertarian party but they have been talking about this issue for as long as I can remember, I just hope next time we get an opportunity to shine with two deplorable major party candidates we don't nominate a total stoner!.
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to clarify my comment, I don't think Apple getting tax free interest is wrong because thats how bonds work, but it seems that if im reading correctly, they are buying the bonds with pre tax dollars. Thats the genesis of my comment.
But that's the why the bonds even sell. (Score:2)
Government bonds don't give a very good return, and honestly at this point I start to question their stability a little bit.
So what reasons would anyone have to purchase such bonds? The fact that you could buy them pre-tax s the key, and the reason why the bonds do not have to have much of a yield to find a lot of buyers.
If you "fixed" this problem you would pretty much have to have the government start paying a much higher yield on bonds which would create an immediate cash-flow disaster for the governme
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"if im reading correctly, they are buying the bonds with pre tax dollars."
Foreign earnings are only taxed by the US worldwide tax regime if they are repatriated to the US. Foreign earnings are, of course, taxed by the country where they are earned (generally by a territorial tax regime).
And? (Score:2)
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?
$6? (Score:3)
I've paid them a heck of a lot more than that...
It wasn't tax free money being stashed (Score:2)
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."
The interest on government bonds is tax-free. The money used to buy them is what's left after paying taxes on it. I.e., the earnings were not exempt from taxes because they were used to buy bonds.
And "yawn."
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Wrong, federal bonds (government bonds) are taxable at the federal level, but not at the state or local level.
The point was that the foreign earnings were not being tax sheltered by the purchase of government bonds, which is what the summary alleged. But thank you for the correction.
Fake news (Score:5, Insightful)
Headline should read: "Apple loans U.S. Government money"
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Why?
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I would much rather America be indebted to American companies
The company that is the subject of this discussion is Irish.
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Or even more correctly, "Government borrows money. Apple buys some of that debt."
I own some of the same kinds of bonds Apple does, but the government didn't borrow that money from me. It borrowed it from someone, somewhere, at some point, who then sold that debt on the open market where it traded many hands over time and eventually some of it ended up with me. Actually some of it ended up with a bond index fund that owns and trades many kinds of bonds, and some of that fund, through a similar process, event
That's okay (Score:2)
That's okay, with all the iPads and iPhones I've stolen I figure I'm way ahead of the curve.
Dumb (Score:3)
There are a lot of good reason to hate on Apple's (Score:3)
Who cares? (Score:2)
Any US taxpayer and corporation that buys US Treasury bonds has the same exemption in the US. Also, in most US states the interest from bonds issued by the state are also tax exempt. Who cares?
What I would like to know is how much of the US debt would be offset by Apple not paying corporate taxes. What is the interest paid on that amount? This is part of the real damage that Apple is inflicting on US citizens.
So...??? (Score:2)
Apple invested in US Treasry Bonds (Score:2)
They pay interest. It's not much interest, but it is some. So basically Apple is propping up the finances of the US Government. And it's their fault.
Isn't this normal? (Score:2)
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I haven't. (Score:2)
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This was misfiled - it should be in funfacts.slashdot.org.
Re:Ummm $6 per person? (Score:5, Informative)
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By count of filers? And we'd rather the government default on its debt than to have buyers of bonds? It's a non-issue.
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Statistics don't work that way (Score:2)
600,000,000 / (estimated number of people working and paying into the tax system)
Retired, too young to work, disabled, etc.. don't pay into the tax system. I would agree if you said that the summary was wrong, because it is.
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The key word is "taxpayer." If you don't pay taxes, you are not really a person.
*cough* Trump! *cough*
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If you don't pay taxes, you are not really a person.
You are a JOB CREATOR!
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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.
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