Taxes. US gov wants to take something like 35% in taxes of "repatriated" earnings.
http://www.wired.co.uk/news/archive/2013-05/2/apple-borrowin...
http://www.wired.co.uk/news/archive/2013-05/2/apple-borrowin...
Bringing it back simply allows Tax authorities to "see" it again.
Perhaps the fact that it's even possible for companies to shelter the vast bulk of their earnings from tax is the problem in the first place?
There is an easy solution: Tax the corporation's US payroll. The obvious problem with doing that (or any other thing that causes effective tax rates to increase in response to employing US workers) is that it creates a large monetary incentive to move the "value creation" somewhere else.
The whole problem is that we're trying to tax stupid things. Taxing corporate profits is stupid because profits don't have a nexus with any particular jurisdiction, so they get moved to whichever jurisdiction has the lowest taxes. The only way to avoid that is to tax something other than profits -- something that actually exists in your jurisdiction. Payroll tax, consumption tax, etc. And between them, the consumption tax is better because a disincentive to buy things made in other jurisdictions causes less harm to the local economy than a disincentive to hire the people in your jurisdiction would.
Edit: People who downvote comments without providing any reasoning are cowards.
It also changes who is affected by changes in the tax rate for all the employees whose compensation was negotiated before the rate changed. Making the payee of US payroll taxes the employer rather than the employee would similarly be a de facto raise for almost all US workers at the time of implementation because the employer would effectively begin paying your income taxes.
So what I mean is, make the corporation pay it, not the employee. Assuming you actually want a tax on labor at all, given that it discourages hiring in your jurisdiction.
Sure, but income tax is different than payroll tax, and some payroll taxes (the federal ones that support Social Security and Medicare, particularly) are split between the employee and the employer.
> Making the payee of US payroll taxes the employer rather than the employee would similarly be a de facto raise for almost all US workers at the time of implementation because the employer would effectively begin paying your income taxes.
I think you mean "payer" rather than "payee". The payee of federal income and payroll taxes is the federal government, not either the employee or the employer.
> So what I mean is, make the corporation pay it, not the employee. Assuming you actually want a tax on labor at all, given that it discourages hiring in your jurisdiction.
To the extent the US has a tax on labor qua labor (payroll tax vs. income tax), that's already halfway true (income tax isn't strictly a tax on labor, since its not limited solely to labor income.
The IRS can't touch that money any more than they can touch the money of your Jamaican love-child.
In 2013, the Canadian government expelled the Eritrean consul for illegal efforts at collecting that tax.
http://en.wikipedia.org/wiki/International_taxation#Citizens...
In the U.S. residence is a very straightforward. A company is a resident if it is incorporated in the U.S. An individual is a resident if he is a citizen, a greencard holder, or passes a mathematical "substantial presence" test.
Non-resident U.S. citizens are subject to worldwide taxation...but they have a very generous $100k floor, plus foreign tax credits for foreign taxes paid on their income.
The $100k floor only applies to work done outside of the US. If you work for an American company, you'll invariably go on business trips back home, which mess up your taxes substantially as this isn't covered on the US/China tax treaty.
It's not taxing world wide income. Apple hasn't paid US taxes on these foreign profits. That's the whole point. They only have to pay taxes on that income if they bring it back in the US.
You are surprised that the US wants to tax earnings? The US taxes everyone's earnings. If they want to keep it overseas they can avoid the tax. If they want to bring it back they need to pay a tax on the amount minus the credit for the foreign tax already paid. They would have been taxed if they earned the money in the US, so I'm not sure why this is surprising.