Arab Today, arab today big cash stockpile puts us tech firms on the spot
Last Updated : GMT 13:17:54
Arab Today, arab today
Arab Today, arab today

Big cash stockpile puts US tech firms on the spot

Arab Today, arab today

Arab Today, arab today Big cash stockpile puts US tech firms on the spot

Washington - AFP

Apple has more than $81 billion parked overseas. Microsoft has $54 billion, Google $43 billion and Cisco $42 billion. Being flush with cash is a good thing, but it also poses a public relations problem for US technology giants amid an election year debate about economic patriotism. Some say the shifting of profits overseas is a huge tax avoidance scheme, and that loopholes should be closed. Others say the situation calls for a \"tax holiday\" to encourage firms to repatriate funds and invest in the US economy. The cash stockpile is not only a tech phenomenon. Various estimates say more than $1 trillion in US corporate cash is now held overseas. But the most prominent and fastest-growing cash piles come from those tech firms that can easily use transfers among foreign subsidiaries to keep US tax liabilities low. \"Any company with intellectual property, whether it is software or how to make a drug, has the opportunity to assign the ownership to a foreign subsidiary in a tax haven,\" said Robert McIntyre, director of the activist group Citizens for Tax Justice. In examining Apple, McIntyre said, \"what you discover is that essentially all of the money it has offshore has never been taxed by anyone.\" A July report by Moody\'s Investors Service said 22 US-based technology companies had $289 billion, 70 percent of their total cash, overseas at the end of March and forecast this would grow to $400 billion within three years. Moody\'s said companies are reluctant to bring these funds back to US soil where they would be taxed, possibly at the top corporate rate of 35 percent. Under US law, companies get a deferral of these taxes until the money is repatriated. Until recently, some major companies had been lobbying for a new \"tax holiday\" to allow repatriation at a reduced rate, similar to a 2004 effort which allowed firms a tax rate of just 5.25 percent. Microsoft and Cisco, along with other multinationals such as pharmaceutical giant Pfizer joined an effort last year, saying it could create some 2.9 million jobs. The group called WinAmerica suspended its effort as the US presidential election ramped up. But a WinAmerica spokesman said the group \"is committed to working with Congress and the administration after the election to reform the tax code and inject nearly a trillion dollars into the US economy.\" Earlier this year, Apple chief financial officer Peter Oppenheimer expressed a similar view, saying, \"repatriating the cash from offshore would result in significant tax consequences under current US law.\" \"We have expressed our views with Congress and the administration. We think that the current tax laws provide a considerable economic disincentive to US companies that might otherwise repatriate the substantial amount of foreign cash that they have,\" Oppenheimer said. The Obama administration has opposed a tax holiday, saying the 2004 effort failed to deliver on its promise. Former assistant treasury secretary Michael Mundaca said last year of the 2004 tax holiday: \"Unfortunately, there is no evidence that it increased US investment or jobs, and it cost taxpayers billions.\" Presumptive Republican presidential nominee Mitt Romney has proposed replacing the US system of \"worldwide\" taxation with a \"territorial\" system, meaning profits would be taxed only in the jurisdictions earned. A Romney campaign statement says the current rules \"encourage American multinational companies to park their profits permanently overseas.\" But Seth Hanlon of the Center for American Progress said the Romney tax plan would \"enhance the tax code\'s rewards for moving jobs and investments overseas\" and \"provide a gratuitous windfall\" to some firms while cutting US tax receipts. Apple has been a particular target of those seeking new revenues. An analysis by Citizens for Tax Justice found that if worldwide profits are included, Apple\'s effective tax rate in the US is around 12 to 14 percent in the period from 2006 to 2011 instead of the 31 percent in company documents. McIntyre said the only effective way to bring up the rate would be a worldwide tax system without loopholes like deferral, which he said costs the US some $600 billion over 10 years. Jacob Frenkel, a Maryland attorney who specializes in corporate governance, said the effort by Apple and others to keep taxes low in not just fully legal, but also in line with their fiduciary duties. \"Their primary obligation is to their shareholders and to do what is in the best interest of the company,\" Frenkel said. Additionally, Frenkel said that \"more and more American corporations are finding the US regulatory structure to be so burdensome that they almost regret they are US-based corporations.\" Christopher Bergin, a tax lawyer who publishes a series of newsletters on fiscal matters, said blaming companies like Apple misses the point. \"The problem is not Apple, the problem is the US Congress,\" Bergin told AFP. \"The corporate tax system is broken.\" Bergin said that the US tax code for business is so full of loopholes, big firms employ armies of lawyers and experts to determine how to legally reduce taxes. Some of these loopholes have exotic-sounding names like a \"Double Irish\" or \"Dutch Sandwich,\" which refer to specific techniques to transfer among subsidiaries to lower taxes. \"There is nothing wrong with Apple taking advantage of the tax rules as written,\" Bergin said. \"As far as unfair, it\'s the tax code. \"So simplify the tax code, eliminate the loopholes. Maybe it is time to eliminate the corporate tax code and replace it with something else.\"

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today big cash stockpile puts us tech firms on the spot Arab Today, arab today big cash stockpile puts us tech firms on the spot

 



Arab Today, arab today
Arab Today, arab today Kanye West puts hijab-wearing model

GMT 12:22 2017 Monday ,20 February

Kanye West puts hijab-wearing model
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today To release new antiques collection

GMT 20:33 2017 Friday ,17 February

To release new antiques collection
Arab Today, arab today Optimism on the front line

GMT 07:24 2017 Monday ,20 February

Optimism on the front line
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic

GMT 16:23 2017 Sunday ,19 February

Global energy news

GMT 16:05 2017 Sunday ,19 February

Trudeau calls for wider social benefit from economy

GMT 05:57 2017 Sunday ,19 February

How do you say déjà vu in Greek?

GMT 05:26 2017 Sunday ,19 February

US natural gas market tightens

GMT 05:06 2017 Sunday ,19 February

Merkel: Euro is too low for Germany

GMT 04:58 2017 Sunday ,19 February

Swedish PM: Brexit deal in 2 years is unlikely
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Porsche reveals new 2018 Panamera

GMT 17:31 2017 Wednesday ,15 February

Porsche reveals new 2018 Panamera
Arab Today, arab today Egypt to hold first session of Arab film festival

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 16:08 2017 Wednesday ,15 February

Shawsh reveals her collection "Jewelry of dreams"

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 14:04 2017 Tuesday ,14 February

"Lagom" new Swedish concept in interior design

GMT 12:07 2017 Thursday ,16 February

Bite-mimicking malaria vaccine

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 17:36 2017 Monday ,13 February

Designer prepares to present 2017 collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday