Cash Abroad Rises $206 Billion as Apple to IBM Avoid Tax

[OhioChick]

Source: Bloomberg

Mar 12, 2014 10:42 AM ET

The largest U.S.-based companies added $206 billion to their stockpiles of offshore profits last year, parking earnings in low-tax countries until Congress gives them a reason not to.

The multinational companies have accumulated $1.95 trillion outside the U.S., up 11.8 percent from a year earlier, according to securities filings from 307 corporations reviewed by Bloomberg News. Three U.S.-based companies -- Microsoft Corp. (MSFT), Apple Inc. and International Business Machines Corp. -- added $37.5 billion, or 18.2 percent of the total increase.

“The loopholes in our tax code right now give such a big reward to companies that use gimmicks to make it look like they earn their profits offshore,” said Dan Smith, a tax and budget advocate at the U.S. Public Interest Research Group, which seeks to counteract corporate influence.

Even as governments around the world cut tax rates and try to keep corporations from shifting profits to tax havens, the U.S. Congress remains paralyzed in its efforts. The response of U.S.-based companies over the past few years has been consistent: book profits offshore and leave them there.

Read more: http://www.bloomberg.com/news/2014-03-12/cash-abroad-rises-206-billion-as-apple-to-ibm-avoid-tax.html

[ForgoTheConsequence]

1. In before the usual defenders.

It's not their fault!

You would do it to!

But they have a cute little Apple logo that glows!

[ChromeFoundry]

2. +1 for - *waaah* But everybody else is doing it...

[ForgoTheConsequence]

4. Apple is the second most profitable company in the world.

But it's fan boys still like to pretend that it's some small niche progressive company taking on the giants. They can do no wrong as long as they have a cute little glowing logo.

[kelliekat44]

3. When is enough money enough? No i wouldn't do. How unAmerican.

And to all those giving up their citizenship to avoid paying taxes the same applies. Why should I admire or even give a pass to folks who want to TAKE whatever good things this country has but do not want to CONTRIBUTE to country that gave them the freedom and opportunity to become successful? Are there any people left in the world who feel so grateful for what they have that they are willing to share in the tax burden of a great country to ensure that those who pay their fair share of the tax burden are able to maintain a reasonable good standard of living? I am so sick of wealth worship, privilege worship, greed worship.

[davidpdx]

14. Actually the majority of the people giving up citizenship aren't the rich

They are regular expats that live overseas (most married to a foreigner) for many years. The media makes hay out of the "big fish" that are leaving the US giving the impression everyone that does it is rich and feels entitled.

The tax laws were changed (or rather more strictly enforced) requiring those overseas to report assets over a certain amount to catch these so called "big fish" at the expense of ordinary expats. Now I have no problem with the laws being enforced. Those people should pay taxes.

The issue is that it has snared people who make a hell of a lot less. The threshold is low, even low enough that I may face it at some point in the future (my income would put me in the middle class in the US). It requires banks in foreign countries to report information about Americans to the IRS. We now are required to do additional paperwork that is complex and costly. If any of the information is wrong, even in simple error it could mean thousands of dollars in fines.

As an American living in Korea I am not required to pay taxes as Korea has a tax treaty with the US preventing double taxation.

It's not all about the fatcats.

[azureblue]

5. It's entirely legal

and other international corporations do this on a regular basis, so why single out Apple? if you don't like, it, then change the law.

[ForgoTheConsequence]

6. Because Apple is the second most profitable company in the world.

Maybe posting these stories is part of educating people so we can change the laws.

[lostincalifornia]

12. Perhaps, however, not naming the others, GE 110B, MSFT 76.4B, PFE 69B, AAPL 54.4B, IBM 52.3B,

JNJ 50.9B
XOM 47B
C 43.8B
PG 42B
GOOG 38.9B
HWP 38.2 B
PEP 34.1B
ORCL 33.1B
CVX 31.3B
KO, JPM AMGN UTX, etc. etc. etc.

Does NOT tell the complete story, and only referring to the second most profitable company also does not tell the complete story by leaving out revenue:

http://money.cnn.com/magazines/fortune/global500/2013/full_list/?iid=G500_sp_full

As far as educating people, this story has been posted time and time again, and Congress has their little hearings on this, and nothing gets changed. Apple is always singled out, and the oil companies and banks are almost never mentioned because I suspect because they exert more influence over our bought and paid for Congress than Apple does.

[ForgoTheConsequence]

15. Microsoft was named.

As was General Electric.

Try reading the article first. Apple will be fine, no one is bullying Apple, I promise.

[lostincalifornia]

16. I wasn't defending Apple or any of them. I was just commenting that this should have been changed

by Congress years ago. You are right, the context of my wording implied I didn't read the article, I did.

I was just saying there are a lot of companies involved it is rampant, and every time something like this comes out I do not see it being addressed where something can be done about it.

Hell, since 2000 we knew their were voting problems, and what has Congress done about that.

I know, way different issue.

[ChromeFoundry]

8. And so were upskirt photos in Massachusetts...

but that doesn't make it right. And it doesn't make the photo taker less of a creep.

[okaawhatever]

10. Companies that earn a lot of their income from intellectual property benefit disproportionately from

the laws. Apple is by far the biggest player in that game. I own Apple stock, but this needs to stop. Holding IP rights overseas is very easy because you don't need to actually make the product there. They just have an office with a couple workers and pay royalties to that office. Lichtenstein is a big one. Ditto Luxemborg, Germany and Hong Kong.

[jsr]

7. Which is why we need to cut corporate taxes ASAP

so they can increase their cash hoard and hide it even better.

[Blue_Tires]

9. This is why I laugh when so many businesses plead poverty over high taxes...

[on point]

11. Tax global retained earnings at 10%. That's a reason!

[blkmusclmachine]

13. ,

,