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Comment by downandout | Hacker News Reader

We currently get $0 in tax revenue from the cash Apple is hoarding overseas. This tax “holiday” (a term I dislike because it incorrectly implies that no tax is being paid on the repatriation, when it is simply a reduced rate) is resulting in $38 billion that we would not have otherwise received.

$38,000,000,000 > $0

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If you or I decided we just didn't like the tax rate that applied to us and didn't pay our taxes for decades at a time on income we made overseas, what do you think would happen?

Corporations are treated as people only when it's convenient.

You and I don't have high-powered lawyers, lobbyists, loopholes, offshore accounts, subsidiaries, etc to hide behind.

This is an insult to every U.S. citizen...Apple wouldn't exist if it weren't for the U.S. and its tax-payers providing the environment that allowed Steve Jobs to create his company and become successful.

The rate they're being charged on this money is even lower than the new lower rate that they'll be charged on future income. Must be nice. Yay for corporate oligarchy.

I get your point. Only caveat is corporations also create jobs and pay their workers, but you and I as individuals do not.

I know lots of Apple workers (directly or indirectly) are in China, but I wanted to point out why it's inappropriate to compare personal and corporate taxes.

I create jobs all the time. Companies employ people based on Demand not simply whimsy.

> I get your point. Only caveat is corporations also create jobs and pay their workers, but you and I as individuals do not.

That's like saying the wheat creates work for the mill to make flour.

You can't have one without the other. Can we just get rid of the ridiculous notion that corporations provide more than the workers doing the actual work?

> Can we just get rid of the ridiculous notion that corporations provide more than the workers DOING THE ACTUAL WORK?

Why is this a ridiculous notion?

I don't think it is. If the > workers DOING THE ACTUAL WORK are able to provide more value than the corporation, then why are they working for the corporation instead of providing more value than the corporation by themselves; and paying themselves more than the corporation pays them? I think OP's argument could be an example of reductio ad absurdum.

The balance of power remains at the management level of a corporation, despite the fact that management hardly "does the work" that workers hired would be doing.

The same arguments applied to the peasantry of the feudal age. There are many more peasants than lords, but through an imbalance of power (military in the feudal age, and monetary in the modern age), the higher ups gets to claim the profits of the workers.

It seems to me that management is good at crafting the appearance that they hold power even in cases where they don't.

See also: VUCA

IMHO, corporations don't create jobs any more than the workers and consumers do.

While I agree with you to some degree, we have the system we have. It has somehow survived through both tax-and-spend Democratic and fiscally conservative Republican administrations. It had to be fixed. So what say what you will about the current administration, they managed to get something done that even some of the most tax-hungry politicians in the nation previously failed to do.

> So what say what you will about the current administration, they managed to get something done that even some of the most tax-hungry politicians in the nation previously failed to do.

This is not terribly unique. We had a very similar (slightly more generous) repatriation tax holiday during the Bush Administration, in 2004.

It's been 14 years, which included 8 years of tax-hungry Democratic rule. So it is at least somewhat unique.

The Democrats are tax and spend and the Republicans are borrow and spend. If you borrow and spend then you need inflation to eat away at the interest you are paying on the money. But you can only borrow so much and quantitatively ease (inflate) so much.

Also unique because a simple repatriation holiday is a far cry from restructuring our corporate tax code to make us competitive with the rest of the world from a tax perspective.

"Corporations are people, too!" as in, the people who hold their wealth in the form of corporations and generate their income from capital. Realize that it's not just an inane phrase, they are talking about themselves. They want to escape being taxed and they always succeed. Everybody else can pay, please.

What's incredible is that there are many more of regular people than these "people," yet regular people do not act cohesively to form a political bloc so they bicker amongst themselves.

Regular people own wealth in the form of corporations, too. Half of all Americans own stocks. Public and private sector pension funds own large amounts of stock. University endowments include stock investments and private equity. Sovereign wealth funds, such as the Alaska Permanent Fund, own large amounts of stock.

If we want to tax the rich, let's tax the rich. Let's not tax straw men that intermediate wealth for everyone, because that's what corporations are.

It's amazingly elitist to ignore the fully half of Americans who own none of this capital

My point is that if you want to punish the other half of all Americans (including poor grandmothers living on pensions) as a means of taxing “the rich”—which is exactly what high corporate taxes do—that an injustice has been done. Advocating for the interests of a diverse half of the population is many things, but “elitist” is not one of them.

Half (46% in 2013) of all Americans owned some financial wealth, that's already counting indirect investments -- I believe this number came from a study by Ed Wolff. In the same year (2013), the bottom 80% together owned about 5% of the financial wealth in the US, under the same definition counting indirect investments (80%-99% owned about 50%, 99%-100% owned about 45%). So no, "everyone" does not benefit in the same way from corporate wealth and "regular people" (the bottom 80% seems like a pretty good proxy) have basically nothing to do with it, even in aggregate -- forget about per capita.

As for not taxing corporations at all and instead fully taxing dividends and gains, that's a different discussion with its own merits.

That’s kind of like saying that because I have a house on a tiny plot of land and my rich neighbor owns half the land in town, that property taxes don’t affect me. It doesn’t really follow.

It certainly woudn't affect you as much as your rich neighbour. And if the additional tax on land brought in more community services, you would be all for it, whilst your neighbour would be against (since he'd be paying a majority of that cost to fund said community service).

True it seems we are getting the crumbs here falling between the cracks. But what is another realistic scenario? Tax them even more? Wouldn't they move to another tax haven. Why didn't that work so far, these tax tricks are not new.

The whole point is that earned income should not have to be repatriated to be taxed. If I as a citizen have a bank account in Switzerland that accepts my foreign income then I pay tax on that money in the year it was earned. The exact same rules should apply. Just because the bank account is outside of the US should not make a difference.

If I don't pay my taxes on time, I get fined... If Apple doesn't pay on time, they get a reduced rate.

> The whole point is that earned income should not have to be repatriated to be taxed.

Agree. They used the double Irish paying basically no income tax there. Then were trying to move to Jersey (the island). This isn't new though and other companies were doing it. Is there any realistic short term hope that we'll finally close all the loopholes and the Apples and Googles of this country will start paying their fair share of taxes? Probably not.

But I don't see why not at least be happy with them paying some taxes and investing the money domestically? Yet everyone here is upset. It is not ideal, I'd rather have universal healthcare, basic income even, I'd rather these companies not be able to do these schemes and pay their fair share of taxes, but it is what it is, why not be happy for some positive thing happening.

My guess is that the path outside of the legislature doing anything is through the courts. Since corporations are citizens there must be some kind of constitutional law since human citizens don’t get the same benefit.

I haven't thought of the courts. It might be interesting to see what would happen. Fighting with a hundred billion dollar company in court is tough though. The have infinite legal resources basically.

And yeah, I see the point about it being considered a person but that is mostly what is called "legal fiction" (it is actually a technical term, not just me being silly https://en.wikipedia.org/wiki/Legal_fiction). And that only goes so far. Mostly to benefit the corporate entity not the society. I'd like to put some companies in prison for life for destroying the environment or poisoning its workers but it just won't work. It would be nice to see how far it would go though.

What they do is not illegal, so courts do not help. For example, see Fair Tax Town. https://www.independent.co.uk/news/uk/crickhowell-welsh-town...

I'm describing the US here, not the UK. In the US you can challenge a law or statue as being unconstitutional.

No other country taxes it's citizens this way. Do you think if a US citizen lives and works in Germany, they should still have to file and pay US income taxes even though they were living in Germany and earning a salary working in another country? That makes no sense to me.

If Apple pays double taxes on iPhones sold in Europe to European citizens, after Apple pays taxes to the EU, that's effectively a tax by America on citizens of the EU. The phones are made in China, shipped to Europe and sold to citizens of the EU for Euros, never having stopped on US soil, and being taxed in the EU. Why does it make sense for the US to apply a tax which effectively would amount to an increased tax on purchases by citizens of another country?

There are other forces in play. How likely do you think Apple is to give up their "Designed in California" tagline?

Probably not that but they could keep that even when their "profitable on paper" subsidiaries were spread around tax havens just like before.

But another interesting thing here is the interplay with EU countries. EU recently started to pay closer attention to Apple. Even forced them to look for a new place (they found Jersey I think). From my armchair understanding if they pay taxes in one place, say EU they might not need to pay it in US and vice-versa. Because of double taxation. As long as Apple was hoarding the money quietly and nobody could do anything it all good. As soon as EU started going after the money, it would benefit US to try to get to it sooner.

Whether politicians considered that or not not sure. But if they did, I can see them wanting to capture those taxes before EU got to them.

I for one am happy the part of them investing more in US. Don't see the reason people are upset about it.

If they bring the money back then inevitably they'd spend it back into the US economy either through direct job creation or buying things. If they do create jobs, the US gets most of its money from income tax, which would increase from the more jobs/higher wages. It feels like double dipping if we expect them to pay taxes on repatriating the money and then also taxing the wages that the repatriated money allows them to pay.

Most likely they will buy back stock or issue dividends. They have to do what the majority of shareholders want with the money. If they don't they will be sued.

Boy are you in for a shock when you find out the money that you spend, which you've paid income tax on it, goes to someone who pays income tax on it again!

> It feels like double dipping if we expect them to pay taxes on repatriating the money and then also taxing the wages that the repatriated money allows them to pay.

That is how our federal government constantly engages in double taxation. A corporation makes money + pays taxes, then pays employees who pay taxes. Those employees buy goods and services as well as have their own companies, all of which pay taxes on their incomes.

After five layers of this double-dipping, an initial million dollars only has $327,000 left, with the other two thirds having been paid in taxes (at an average of only 20%). Many people pay far more than 20% in federal taxes. The federal government takes in taxes most of every dollar this way.

> If they bring the money back then inevitably they'd spend it back into the US economy either through direct job creation or buying things.

That is a misconception. It's not like they are storing dollar bills in warehouses on foreign soil. The bulk of the 'overseas' money is already invested, for a large part in the US. See page 49 in Apple's yearly report [1], to see how that money is currently invested: at the end of 2016 almost $42 billion dollars were invested in US treasuries, $131 billion in corporate securities. It doesn't say how much of those corporate securities are US companies, but it's probably the bulk. It's an accounting/tax fiction that it is currently 'overseas'.

[1] http://investor.apple.com/secfiling.cfm?filingid=1628280-16-...

Apple wasn't breaking the law. Lawmakers were split and the majority simply didn't want apple to pay taxes. You can also hide your income from taxes if you are a business owning capitalist and not a commie laborer.

You make it sound like there was no alternative. You can also tax income when it's earned, instead of when it's repatriated. That's how individuals are taxed on their foreign income. There were also other variants proposed.

In any case, the reason that corporations lobbied so hard for this particular tax code change was that they actually needed to repatriate money ASAP. Interest rates are going up. Their operational tactic of borrowing low-interest money against their overseas cash to repurchase shares is ending and they needed their cash. They would have repatriated anyway. Now you can kiss that tax money goodbye, just like you can kiss goodbye to the tax money on the free stepped-up basis that large estates will be passing on for the eight years.

No. Apple has been waiting for the tax holiday because they've seen it before in precedent. The problem is that politicians like the tax holidays because it looks good on them (big capital inflows have an effect on the economy). But if the holiday was eliminated entirely and never expected, Apple would have to slowly repatriate these earnings as their chest grew too large.

That’s in effect what’s happened here - not only is there a one-time repatriation event, but the tax code has been changed so all future foreign cash holdings will be taxed whether or not hey are repatriated.

There are no repatriation taxes anymore. The new law did away with them.

I know tax isn't, like, simple, but it's not that complicated.

Not sure where you're getting your information, but that is simply incorrect. The repatriated cash is simply being taxed at a lower rate. Hence the $38 billion.

Exactly. X% of something is better than (X+Y)% of nothing.

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