Over the past few years, much has been made of Apple's reserves of cash and securities, which are now up to approximately $60 billion and growing rapidly. Some observers have suggested the company initiate a stock buyback or issue dividends to reward investors with some of the profits, while others have preferred that the cash remain in Apple's hands to enable the company to reinvest it into the business at some point in the future for greater returns. Apple CEO Steve Jobs noted during the company's October 2010 earnings conference call that Apple is holding onto the cash in order to take advantage of "one or more unique strategic opportunities" that it believes may present itself.
But all of the money may not be available for immediate use, as Fortune reports that Apple is one of a number of U.S. companies with significant profits generated in international markets that continue to sit abroad as the companies prefer to not pay the 35% federal tax charged on such foreign earnings.
To address this situation, Apple and these other major players are reportedly stepping up lobbying efforts to try to get the federal government to offer a one-year "tax holiday" that would allow them to bring the profits back to the United States while only being subjected to 5% tax, with the rationale being that the money could be put to work in the U.S. to stimulate the economy rather than simply sitting in foreign bank accounts.
A group of tech, pharmaceutical and energy giants is readying a major lobbying blitz for a tax holiday that would allow them to bring home the estimated $1 trillion they've got parked overseas at a steeply discounted rate, Fortune has learned.
The campaign is still in its planning stages, but sources close to the effort say Oracle, Cisco, Apple, Duke Energy, and Pfizer are among the major players looking to bankroll a coordinated, sustained pitch to sell policymakers on the idea. Their aim is to win a one-year tax amnesty on their foreign earnings, allowing them to repatriate that money at a tax rate of about 5%, instead of the 35% they face now.
International markets have become increasingly important to Apple as iOS devices have proliferated around the world. In fact, Apple reported that during its most recent quarter, 62% of its revenue came from international sales. Consequently, billions of dollars in profit are being generated overseas each quarter, and Apple has been loathe to turn over 35% of those sums to the U.S. government.
On a possibly related note, Apple recently hired high-profile lobbying firm Fierce, Isakowitz and Blalock to assist with government dealings, an unusual move for the company that has typically refrained from significant lobbying in Washington, DC.
Top Rated Comments
Likewise, that $7 priority mail package that would've cost me $14 to send UPS ground, arrives in 3 days tops - vs taking a week or so.
Why? Because the USPS is run by a guy that is being grilled left and right by investigators and will probably be kicked out for "fraud" although he makes roughly $200k a year (pulling the figure out of my ass). Meanwhile, the CEO of USPS and the CEO of FedEx are both millionaires that get a huge fortune in yearly revenue and bonuses.
Despite this, USPS workers are treated like kings and queens and sit around - something they're famous for. When was the last time you heard a UPS or FedEx employee sitting around getting paid pretty good to do nothing? And yet USPS does a better job rather regularly.
As for rich people dumping money into the economy.. where? They drive Bentleys, Rolls Royces, Mercedes, Audi - they buy European furniture, love Japanese and Italian food, buy clothing made entirely in other countries, by companies that have never had any representation other than storefronts in the US.
Really though, I think Apple needs to put up or shut up - Steve Jobs should be asked how much of that money he intends to put back into our economy (and how). What? Open another store hiring a bunch of minimum wage employees? Hrm. Whopee.
The company is essentially the richest company in the US right now. They should be publicly shamed for not hiring more people in the US. Hell, they could get a marketing boost from showing that their iPhones are made in the US or something - and they wouldn't have to worry about their precious prototypes randomly leaking on foreign sites.
News sources are a poor substitute for the truth these days as they only talk about the sensational headlines, NOT the underlying FACTS of the matter. I know a lot of people that work at the USPS and have family working there.
Try looking up how much the USPS overpaid into the health care pre-funding (estimates range from $30 BILLION to over $75 BILLION, not 6.9 Billion). Try looking up how many years the USPS earned Billions in profit and the treasury department raided those profits so they could pay down the deficit with it (thus all profits earned magically disappear and cannot be used to pad the expenses in the following year). Try looking up what the profit margins would be if the Bush administration law known as the Postal Accountability and Enhancement Act of 2006 (which was passed by a Republican Congress and signed by a Republican president) requiring the USPS (no other government agency has this requirement) to fully pre-fund their health care for future retirees in advance. These aren't routinely figured into the numbers posted by most news articles these days.
The USPS would have been in the black the past three years in the middle of a recession and the loss of a lot of 1st class mail to e-mail, etc. Look at how postal rate increases MUST be approved by a committee outside the USPS. They cannot make quick changes to market changes like gas prices like UPS and Federal Express can. Now look at the profits of UPS and Federal Express the past couple of years and how much they've hiked prices. Now compare their prices to the USPS.
You've done NONE of that and yet you talk like you know all about the USPS. You don't seem to know a thing. Or perhaps you do and are purposely distorting the truth? Your article from the United Liberty web site isn't even news. It's a Republican tirade to privatize government (in this case the Post Office, which would get the favorable parts cut up and the rest dumped, leaving America without reliable mail delivery to every address).
FYI, the push to end Saturday delivery is the first step the Republicans want to make the Post Office fail against its competition so that it can be piece-meal cut up to make more profit for America's greedy (that's what the Republicans do to everything they get their hands on). It's why health care costs are so darn high. They demand PROFIT from you getting sick.
Here's a few articles that do address some of these things unlike yours:
(overpaid $75 BILLION into retirement)
http://directmag.com/postal/0122-postal-usps/
(overpaid $50-55 BILLION)
http://www.postalreporternews.net/2010/07/02/prc-affirms-usps-overpaid-50-billion-to-retirement-fund/
(Prefunding Articles)
http://www.plansponsor.com/Post_Office_Says_PreFunding_Retiree_Health_Care_is_Reason_for_Loss.aspx
http://www.postalnewsblog.com/2010/12/01/oig-calls-for-reduced-prefunding-requirements/
http://www.hillbillyreport.org/diary/562/republican-incompetence-crashed-the-post-office-too
www.fairtax.org
...Trying to evade paying their taxes is BS! Just goes to show, if ALL the BIG Corporations didn't have so many Loopholes from paying their Taxes, maybe our country wouldn't be in such a huge mess with our debt. PAY YOUR TAXES APPLE LIKE THE REST OF US!!!
Although the US has one of the highest corporate tax rates, it is in keeping with the rate of other countries of the same economic size as the US -- Japan, Germany, France, Canada, etc. See this CBO report, Figure 2.3 or Figure 2.6 (http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf). The richer and more complex the economy, the more taxation it requires to maintain the structures that support such a rich ecosystem of successful corporations.
And for those of you complaining about the high tax rate paid by rich individuals, the effective tax rate -- the total amount of taxes paid including social security and sales taxes as a percent of income -- is almost flat in the US, at about 30%. See the first chart here (http://lanekenworthy.net/2009/01/08/how-progressive-are-our-taxes-follow-up/). And if you look at the total taxes paid by income group compared to their share of total income, that rate is pretty flat too (http://voices.washingtonpost.com/ezra-klein/2010/04/do_the_poor_really_pay_no_taxe.html).
So whether you look at them as a corporation or an individual, trying to weasel out of a paying their 30% share of taxes is pretty low.
For years politicians have been playing class warfare for their own power. They pit poor against rich and its harmful, dishonest, divisive and destructive. The truth is the poor pay no federal taxes. Anyone one who comments that the so called rich get away with everything on the back of the poor has believed the harmful, dishonest, divisive and destructive politicians. It hold poor people back, they are told the system is not "fair" so don't bother try to get ahead just vote for me and I'll take money from the "rich" and hand it to you. Most of the bottom 50% on income earners not only pay no income taxes they get money back (ie cash payments).
Here are the stats:
Top 1% of income earners pay 40% of all taxes
Top 5% of income earners pay 60% of all taxes
Top 50% of income earners pay more than 97% of all taxes
Bottom 50% of income earners pay less than 3% of all taxes (the vast majority pay less than $0 income tax they get cash)