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Apple sells bonds while sitting on a huge hoard of cash

JTsyo

JTsyo

Lifer
Why you ask. So they don't have to pay taxes on the money sitting overseas. $17 billion in bonds while they have $144 billion in the bank. On the investor side, this is probably a safe bond since you know they have the money to pay it back. Though it seems odd to take loan to buy back shares and raise the dividend. Guess you have to jump through the loopholes to not pay the taxes.
 
i work in hf, so I see all kind of maneuvers to avoid paying taxes.. like moving money in and out of accounts at certain dates.. its insane but its all calculated.. i guess if you got billions, you try to lose less of it
 
So ultimately the interest they pay on the bonds will be less than the taxes of moving the overseas cash. Pretty smart.
 
Significantly less. It's a no-brainer. Repatriated foreign earnings are taxed at the normal corporate rates (35% for big corps). Bond interest rates for a company as prestigious as Apple are what, maybe 3-4% (guessing)? It's the obvious choice.

The only reason it's been so widely publicized is to put pressure on Congress to enact another foreign earnings tax holiday.
 
Mandres said:
Significantly less. It's a no-brainer. Repatriated foreign earnings are taxed at the normal corporate rates (35% for big corps). Bond interest rates for a company as prestigious as Apple are what, maybe 3-4% (guessing)? It's the obvious choice.

.
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Probably less than that. NPR said the rates they were paying are only a little higher than US Treasury bonds.
 
I mostly work with top fortunate 500 companies (including Apple 🙂 ) and their Tax departments are HUGE.

It's the American way. Wild west as long as you don't get caught....no morals or obligation to "America" hehe
 
LOL our country is in shambles LOL

I think we should treat Apple and similar high-profile tax-dodging shitpile companies like Cubans that float in on rafts. Deport the motherfuckers and make import/export dealings with them illegal.

See how well they do under someone else's flag while they try and compete with Chinese knockoffs [of their Chinese devices] in Europe and Asia.
 
Don't be a fool. Do you pay more than you owe in taxes for "America"? The only moral obligation any person or corporation has is to serve their shareholders, as long as they follow the rules.
 
Mandres said:
Don't be a fool. Do you pay more than you owe in taxes for "America"? The only moral obligation any person or corporation has is to serve their shareholders, as long as they follow the rules.
Click to expand...

The point is that large companies (and generally their highest-paid people) don't pay what they owe. Not even close.

So congrats...since the 'techniques' used are not (or less) applicable to an individual with a 'normal' income...you get to help make up the growing deficit.
 
phucheneh said:
The point is that large companies (and generally their highest-paid people) don't pay what they owe. Not even close.
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They pay exactly what they legally owe, and they hire an army of accountants and lawyers to make sure that amount is as small as possible.
 
Mandres said:
The only reason it's been so widely publicized is to put pressure on Congress to enact another foreign earnings tax holiday.
Click to expand...
And they should. Maybe require the $$ go to job creation/manufacturing to be tax free.

Vdubchaos said:
I mostly work with top fortunate 500 companies (including Apple 🙂 ) and their Tax departments are HUGE.

It's the American way. Wild west as long as you don't get caught....no morals or obligation to "America" hehe
Click to expand...
Correct. The $$ was earned over seas and the tax was paid over seas. Why should the IRS get another cut? IIRC, there is only one other country in the world that double taxes their corps like we do.
 
_Rick_ said:
Those are the real terrorists that destroy America!
Click to expand...

I was gonna mention this angle...

But then I considered how grossly underpaid the number crunchers probably are...our unemployment issues...

The economy of the US, even in comparison to the rest of the western world, seems particular perverse, paradoxical, and cyclical. It scrabbles boggles the mind.

Say the companies DIDN'T pay people to dodge taxes...company would have more money to pay taxes...government would have more money...accounting jobs would not transfer to any other industry (bulk of manufacturering force overseas)...less jobs...more government assistance...higher taxes...

...company hires accountants to dodge taxes?

It's a fiscal perpetual motion machine...
 
phucheneh said:
The point is that large companies (and generally their highest-paid people) don't pay what they owe. Not even close.
Click to expand...

then call the IRS and turn them in. They have very generous rewards for whistle blowers who can point out exactly which provision of the tax code is being violated, and how.
 
Interests rates are so low now that even without any repatriation costs, it would probably make more sense to borrow in the public market and leave their cash hoard invested. Even if it is invested in low-risk securities it is probably returning more than the interest on debt is right now.
 
with all the backpatting going on, i couldn't help but think of this quote by Jon Stewart:
Why is it that if you take advantage of a corporate tax break you're a smart businessman, but if you take advantage of something so you don't go hungry, you're a moocher?
Click to expand...
 
phucheneh said:
I was gonna mention this angle...

But then I considered how grossly underpaid the number crunchers probably are...our unemployment issues...

The economy of the US, even in comparison to the rest of the western world, seems particular perverse, paradoxical, and cyclical. It scrabbles boggles the mind.

Say the companies DIDN'T pay people to dodge taxes...company would have more money to pay taxes...government would have more money...accounting jobs would not transfer to any other industry (bulk of manufacturering force overseas)...less jobs...more government assistance...higher taxes...

...company hires accountants to dodge taxes?

It's a fiscal perpetual motion machine...
Click to expand...

The more taxes a company pays, the less money they have to hire employees. See Obamacare. The government doesn't create jobs, companies do.
 
Rakehellion said:
The more taxes a company pays, the less money they have to hire employees. See Obamacare. The government doesn't create jobs, companies do.
Click to expand...

Last sentence is correct.

BUT the first one is BS.

LESS MONEY THEY HAVE FOR THEMSELVES/PROFITS. They will always hire people as that's what gets the work done.
 
Ns1 said:
They pay exactly what they legally owe, and they hire an army of accountants and lawyers to make sure that amount is as small as possible.
Click to expand...

Agreed. I'd say the most nefarious thing is the use of lobbying efforts to help change the tax laws to something they can more easily manipulate. Its complex and hard for laymen to understand the ramifications and a more complex tax code disproportionately harms smaller companies that can't afford lobbying efforts or easily absorb the cost of a massive internal tax avoidance team.
 
I don't understand this line of thinking.. Corps are doing EXACTLY what they are supposed to do ( assuming they are acting within legal parameters).

The Government on the other hand, is responsible for making sure they don't "cheat" and implementing a tax system than ensures everyone pays their "Fair share".

Pretty clear where the problem is from my perspective.
 
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