Not to be holier than though, I'm writing this on a Mac Air...and the IPad is on the desk along with the Iphone. But, it did make me think: how many of my dollars did Apple find a way of stashing overseas in its $69.7 billion hoard that sits out of reach of the U.S. government? Not to wag a finger just at Apple, it's a bunch of other tech companies that lead the way on stashing overseas $2.1 trillion in corporate taxes--and the number just swells.
From Bloomberg:
Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home.
Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations. The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles.
This is slightly higher than when I
wrote about this last year. What Bloomberg does nicely is chart out every single company with major holdings and makes the point:
Microsoft, Apple and Google each boosted their accumulated foreign profits by more than 20 percent over the year, the largest increases by any of the 34 companies with at least $16 billion outside the U.S. International Business Machines Corp., Cisco Systems Inc., Oracle, Qualcomm Inc. and Hewlett-Packard Co. each added at least $4 billion.
The profits added by the eight technology companies accounted for 45 percent of the net gain in overseas funds among the corporations surveyed. At the same time, firms in some other industries felt enough pressure to meet domestic needs that they chose to take the tax hit by bringing money home.
Why?:
It’s a measure of accumulated profits, including those reinvested in active businesses and factories. The companies say they won’t repatriate these profits, and they haven’t assumed that they will pay future U.S. taxes that would be owed if they did.
“One of the reasons that they’re holding the hoards of cash abroad is they don’t want to pay the repatriation tax when they bring it back,” said Rosanne Altshuler, a Rutgers University economist who studies international taxation.
The analysis starts with corporations in the Standard & Poor’s 500 Index and excludes purely domestic firms, real estate investment trusts and companies with headquarters outside the U.S. It includes each company’s most recent annual report, many of which were filed over the past month.
The companies owe taxes at the full U.S. corporate tax rate of 35 percent on profits they earn around the world. They get tax credits for payments to foreign governments and don’t have to pay the residual U.S. tax until they bring the money home.[emphasis added]
Oh, paying taxes...that's just for the little guy.
Ok, this isn't going to be easy to stop. But, in the meantime, an easy move would be to simply say: you wanna shift a huge piece of your profits abroad? Well, fuck you, don’t come knocking on the door of the taxpayers looking for federal contracts. That's what a few members of Congress proposed last year, as I wrote here.