Apple Would Rather Go Into Debt Than Bring Home $100 Billion In Offshore Cash

[Toddsterpatriot]

Pay attention, Simpson and Bowles: There are some things in life worse than going into debt.

For Apple Inc., that worse thing is paying taxes: The company announced plans Tuesday evening to borrow money for the first time ever, despite having nearly $145 billion in cash. The problem is that $102 billion of that cash is parked overseas and would be taxed if Apple tried to use it in its plan to give money back to shareholders.

"We are continuing to generate significant cash offshore, and repatriating this cash would result in significant tax consequences under current U.S. tax law," Apple Chief Financial Officer Peter Oppenheimer said on a conference call discussing Apple's earnings for the quarter that ended in March.

Apple's earnings haven't exactly been setting the world on fire quite enough lately to satisfy finicky shareholders. So the company is under increasing pressure to give its shareholders a taste of its cash. It finally succumbed on Tuesday, saying it plans to pay out $100 billion by the end of 2015, in the form of stock buybacks and a higher dividend. That will amount to about $30 billion per year, according to Oppenheimer, which would just about take up all of Apple's "tax-free" cash flow, as he put it.

If Apple didn't borrow money, then it would have to, gasp, bring cash back home to help pay for its shareholder-greasing. And bringing Apple's offshore cash back home could result in a tax hit of up to $35 billion, assuming it pays the full statutory corporate tax rate (which doesn't happen very often). Analysts for months have been prodding Apple to borrow money to avoid the hit, and Apple has been listening, apparently.

Apple Would Rather Go Into Debt Than Bring Home $100 Billion In Offshore Cash

1). How about electing politicians who actually represent the people vs corporations?

2). How about stop buying their products?

3). So pouting is the least one can do, but any Nd everyone can do something to enact change and force Congress to correct this.

4). How about enforcing some laws that already on the books, like slapping an embargo tax on their products once they arrive into the U.S. for sale? Yes it would make their more expensive than it is already and less people would buy their product, thus losing that same amount or more in sales, thus forcing them to actually build their damn products here.

Borrow at very low rates and write off the interest or pay 35% on the cash?
Hmmmm..........

 

[boedicca]

Let's do the math. What is the coupon % on Apple bonds...a range of 0% to 3.85%.

What's the corporate tax rate to repatriate profits? 35%.

It is much better for Apple shareholders for the company to take on debt. And this is another glaring example of the galactic stupidity of our tax code.

 

[tjvh]

Let's do the math. What is the coupon % on Apple bonds...a range of 0% to 3.85%.

What's the corporate tax rate to repatriate profits? 35%.

It is much better for Apple shareholders for the company to take on debt. And this is another glaring example of the galactic stupidity of our tax code.

And the fact remains, Apple is doing nothing that any other smart business would do, as long as our Tax codes allow it.

 

[AmazonTania]

Let's do the math. What is the coupon % on Apple bonds...a range of 0% to 3.85%.

What's the corporate tax rate to repatriate profits? 35%.

It is much better for Apple shareholders for the company to take on debt. And this is another glaring example of the galactic stupidity of our tax code.

What's even funny is that they're only going into debt to pay it's shareholders...

 

[boedicca]

Let's do the math. What is the coupon % on Apple bonds...a range of 0% to 3.85%.

What's the corporate tax rate to repatriate profits? 35%.

It is much better for Apple shareholders for the company to take on debt. And this is another glaring example of the galactic stupidity of our tax code.

And the fact remains, Aple is doing nothing that any other smart business would do, as long as our Tax codes allow it.

Our tax code ENCOURAGES it. Other countries have far lower, flat taxes, and are not intent on taxing overseas profits. We have the absolute worst, Byzantine, bureaucratic, misguided social engineering, big government crony benefiting tax regime ever on Earth. It is strangling our society.

 

[freedombecki]

Republicans love to protect companies that left so many Republican unemployed.

Democrats love to assault Republican businesses and bankrupt the American government so the Republicans will be called on to do the unpopular work of expensive rehabilitation of the weakened national and international investments and U.S. Treasury so they can swoop down and repeat the same thing of over-regulation, over-taxing, and over-spending for their mutual enrichment of their voter base that depend on those government checks Republican wisdom came up with money to provide.

Gewfball.

 

[OnePercenter]

I don't see any indication that Apple ever paid tax to anyone.

In Q1 they've paid $3 Billion in taxes on $43 Billion of revenue.

Swell! My reference was to the subject of the thread: $100 Billion In Offshore Cash.

 

[OnePercenter]

Let's do the math. What is the coupon % on Apple bonds...a range of 0% to 3.85%.

What's the corporate tax rate to repatriate profits? 35%.

It is much better for Apple shareholders for the company to take on debt. And this is another glaring example of the galactic stupidity of our tax code.

And the fact remains, Aple is doing nothing that any other smart business would do, as long as our Tax codes allow it.

Our tax code ENCOURAGES it. Other countries have far lower, flat taxes, and are not intent on taxing overseas profits. We have the absolute worst, Byzantine, bureaucratic, misguided social engineering, big government crony benefiting tax regime ever on Earth. It is strangling our society.

Corporate effective tax rate in the US is 12.3%

 

[boedicca]

And the fact remains, Aple is doing nothing that any other smart business would do, as long as our Tax codes allow it.

Our tax code ENCOURAGES it. Other countries have far lower, flat taxes, and are not intent on taxing overseas profits. We have the absolute worst, Byzantine, bureaucratic, misguided social engineering, big government crony benefiting tax regime ever on Earth. It is strangling our society.

Corporate effective tax rate in the US is 12.3%

Tell me how that works out for Apple to repatriate profits from overseas?

 

[AmazonTania]

Corporate effective tax rate in the US is 12.3%

The effective tax rate is just the average rate at which an individual or corporation is taxed. It's not the tax rate which all corporations pay. I'm going to assume you understand what average means. The effective rate mainly applies to small/mid cap companies, since they vastly out number large cap companies.

Also, do not forget that you are taxed at the state level as well.

 

[OnePercenter]

Our tax code ENCOURAGES it. Other countries have far lower, flat taxes, and are not intent on taxing overseas profits. We have the absolute worst, Byzantine, bureaucratic, misguided social engineering, big government crony benefiting tax regime ever on Earth. It is strangling our society.

Corporate effective tax rate in the US is 12.3%

Tell me how that works out for Apple to repatriate profits from overseas?

Why would they? If I were sitting on $110M tax free I'd loan it back to myself.

 

[GWV5903]

Republicans love to protect companies that left so many Republican unemployed.

So instead of examining the inherent flaws of the economy and figuring out why companies like Apple chooses not to invest in a unfriendly environment like America, you make it political when it's really not...

That's not surprising.

Don't make it so complicated for Deany...

They will beat their heads against the wall until their last drop of blood drips out if somebody, anybody has more than they do...

 

[OnePercenter]

Corporate effective tax rate in the US is 12.3%

The effective tax rate is just the average rate at which an individual or corporation is taxed. It's not the tax rate which all corporations pay. I'm going to assume you understand what average means. The effective rate mainly applies to small/mid cap companies, since they vastly out number large cap companies.

Also, do not forget that you are taxed at the state level as well.

Effective is ACTUAL.

State tax? How do you know that Apple isn't a Nevada Corporation....Microsoft is.

 

[freedombecki]

Pay attention, Simpson and Bowles: There are some things in life worse than going into debt.

For Apple Inc., that worse thing is paying taxes: The company announced plans Tuesday evening to borrow money for the first time ever, despite having nearly $145 billion in cash. The problem is that $102 billion of that cash is parked overseas and would be taxed if Apple tried to use it in its plan to give money back to shareholders.

"We are continuing to generate significant cash offshore, and repatriating this cash would result in significant tax consequences under current U.S. tax law," Apple Chief Financial Officer Peter Oppenheimer said on a conference call discussing Apple's earnings for the quarter that ended in March.

Apple's earnings haven't exactly been setting the world on fire quite enough lately to satisfy finicky shareholders. So the company is under increasing pressure to give its shareholders a taste of its cash. It finally succumbed on Tuesday, saying it plans to pay out $100 billion by the end of 2015, in the form of stock buybacks and a higher dividend. That will amount to about $30 billion per year, according to Oppenheimer, which would just about take up all of Apple's "tax-free" cash flow, as he put it.

If Apple didn't borrow money, then it would have to, gasp, bring cash back home to help pay for its shareholder-greasing. And bringing Apple's offshore cash back home could result in a tax hit of up to $35 billion, assuming it pays the full statutory corporate tax rate (which doesn't happen very often). Analysts for months have been prodding Apple to borrow money to avoid the hit, and Apple has been listening, apparently.

Apple Would Rather Go Into Debt Than Bring Home $100 Billion In Offshore Cash

1). How about electing politicians who actually represent the people vs corporations?

2). How about stop buying their products?

3). So pouting is the least one can do, but any Nd everyone can do something to enact change and force Congress to correct this.

4). How about enforcing some laws that already on the books, like slapping an embargo tax on their products once they arrive into the U.S. for sale? Yes it would make their more expensive than it is already and less people would buy their product, thus losing that same amount or more in sales, thus forcing them to actually build their damn products here.

Borrow at very low rates and write off the interest or pay 35% on the cash?
Hmmmm..........

So few words said, so many hearts changed.

 

[Toddsterpatriot]

And the fact remains, Aple is doing nothing that any other smart business would do, as long as our Tax codes allow it.

Our tax code ENCOURAGES it. Other countries have far lower, flat taxes, and are not intent on taxing overseas profits. We have the absolute worst, Byzantine, bureaucratic, misguided social engineering, big government crony benefiting tax regime ever on Earth. It is strangling our society.

Corporate effective tax rate in the US is 12.3%

Maybe you can tell us how much extra Apple would pay if they brought back $100 billion tomorrow?
Be sure to show all your work.

 

[OnePercenter]

Our tax code ENCOURAGES it. Other countries have far lower, flat taxes, and are not intent on taxing overseas profits. We have the absolute worst, Byzantine, bureaucratic, misguided social engineering, big government crony benefiting tax regime ever on Earth. It is strangling our society.

Corporate effective tax rate in the US is 12.3%

Maybe you can tell us how much extra Apple would pay if they brought back $100 billion tomorrow?
Be sure to show all your work.

Why would they bring tax free money back? They could start a dummy corporation and loan themselves what they need. Let's wait and see what 'bank' they borrow from.

 

[freedombecki]

Corporate effective tax rate in the US is 12.3%

Maybe you can tell us how much extra Apple would pay if they brought back $100 billion tomorrow?
Be sure to show all your work.

Why would they bring tax free money back? They could start a dummy corporation and loan themselves what they need. Let's wait and see what 'bank' they borrow from.

OnePercenter, why are you zeroing in on taking out Apple Corp?

 

[Toddsterpatriot]

Corporate effective tax rate in the US is 12.3%

Maybe you can tell us how much extra Apple would pay if they brought back $100 billion tomorrow?
Be sure to show all your work.

Why would they bring tax free money back? They could start a dummy corporation and loan themselves what they need. Let's wait and see what 'bank' they borrow from.

Why would they bring tax free money back?

To spend it here. Give it to shareholders here.

 

[OnePercenter]

Maybe you can tell us how much extra Apple would pay if they brought back $100 billion tomorrow?
Be sure to show all your work.

Why would they bring tax free money back? They could start a dummy corporation and loan themselves what they need. Let's wait and see what 'bank' they borrow from.

OnePercenter, why are you zeroing in on taking out Apple Corp?

I'm telling you how it works.

 

[OnePercenter]

Maybe you can tell us how much extra Apple would pay if they brought back $100 billion tomorrow?
Be sure to show all your work.

Why would they bring tax free money back? They could start a dummy corporation and loan themselves what they need. Let's wait and see what 'bank' they borrow from.

Why would they bring tax free money back?

To spend it here. Give it to shareholders here.

As a shareholder I agree....TYVM