Hacker News Reader

Comment by kylec | Hacker News Reader

> If these firms are buying U.S. debt with that money, then U.S. taxpayers are on the hook for hundreds of millions in debt payments to the same U.S. companies they already buy billions of dollars from in iPads, software and routers.

Isn't that the whole point? If it were undesirable for the US to borrow money and pay interest on it, why would the US Treasury issue bonds? And if they are issuing bonds, does it really matter who buys them?

View on HN

Reading the news as of late, there seems to be a new narrative against the tech companies, as if they are the new Wall St. See the bus protests, gentrification protests, aren't involved in their communities, complaining they don't pay enough taxes (while some other companies, such as oil, are receiving tax subsidies), etc.

If someone can spin negative news against them, they will.

The article goes on to criticize American tech companies for not moving overseas funds here; this after they are being criticized for buying Government debt with the money they already have here.

I am at a loss.

The article hypothesizes that they are buying treasuries with their foreign cash.

Note that much of that foreign cash has already been taxed locally, so companies are weary to move it back to the states, especially if they can use it in the country where it was already taxed, or in other countries where it would be counted as foreign investment capital rather than income.

Taxes are freaking confusing with a lot of tax-twice situations, and I don't really blame companies for not wanting to pay taxes twice.

Indeed. Basic rule of wealth, rich people collect interest, poor people pay it. This creates different actual worth on each dollar used.

One who collects interest, well their dollars are actually bigger, sometimes double that of the interest payers dollars due to that very interest. Companies are smart to do this if they can and so are richer individuals, it is banking but it also fuels economies allowing access to money.

Additionally, increased demand for treasuries results in the US being able to borrow at lower rates, decreasing the interest paid.

Reply on news.ycombinator.com