#taxes

There is a technical term economists like to use for behavior like this. Unbelievable chutzpah.

Edward Kleinbard, a law professor at USC speaking to NYT about Apple’s overseas tax situation — or lack thereof

One potentially good thing out of all this, Tim Cook will address it directly tomorrow in front of the Senate:

Mr. Cook is expected to emphasize that Apple is most likely “the largest corporate income tax payer in the U.S., having paid nearly $6 billion in taxes to the U.S. Treasury” in the last fiscal year. “Apple does not use tax gimmicks,” Mr. Cook is expected to testify.

He is expected to seek to rebut the Congressional findings by arguing that some of Apple’s largest subsidiaries do not reduce Apple’s tax liability, and to argue in support of a sweeping overhaul of the United States corporate tax code – in particular, lowering rates on companies moving foreign overseas earnings back to the United States. Apple currently assigns more than $100 billion to offshore subsidiaries.

I figured this would lead to a change in tax policy. Now I’m sure of it.

Peter Burrows:

Apple Inc. avoided as much as $9.2 billion in taxes by financing part of a $55 billion stock buyback with debt rather than offshore cash that would have been billed by the U.S. government, Moody’s Investment Services estimates. Based on current rates, Apple will pay interest of about $308 million a year on the $17 billion bond offering, said Gerald Granovsky, a senior vice president at Moody’s.

Crazy.

Jeff Sommer of The New York Times on the U.S. tech companies hoarding money abroad :

Whatever the reason, United States corporations have parked staggering sums abroad. Last year, analysts at JPMorgan Chase estimated that accumulated offshore profits for American companies amounted to $1.7 trillion. This month, Bloomberg News estimated that the mountain of cash had grown to more than $1.9 trillion.

An astonishing amount of money that you’d think the U.S. government would love a piece of, even if they have to give a mild break on the usual corporate tax rate. If Apple repatriated their horde, they would have something like $67 billion to work with after taxes.