Apple has gotten away with paying so little in taxes every year that the CEO has been called to testify tomorrow to the Senate about how to fix the problem. Apple reported a pretty low tax rate of 25% this year. However the Financial Times points out today that Apple's real tax rate was 15%.
The 25.2 per cent tax rate Apple shows in its accounts is boosted by billions of dollars it sets aside each year to cover future tax liabilities, which would fall due if it repatriated part of its $102.3bn of overseas cash holdings. The figure is an accounting entry and has no effect on the actual amount of taxes paid.
Last month Apple chose to borrow 17 billion rather than spend it's own cash currently being held offshore. That would have been repatriating 17 billion and thus the government would want 35% of that. Borrowing the money and then paying it back almost immediately saved Apple several billion in tax liabilities.
The CEO Tim Cook has already given several interviews about what he plans to say tomorrow. The gist is that the U.S. needs a lower tax rate for businesses.
“If you look at it today, to repatriate cash to the U.S., you need to pay 35 percent of that cash. And that is a very high number. We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable.”
There is currently 1.7 trillion dollars sitting offshore in the bank accounts of the 1000 largest US companies. Currently they pay the US nothing on that money. What if we gave them a sweetheart deal of say 10% to repatriate it now? I know not every company would take the bait, but let's say we got 1 trillion back in to our system. Put 100 billion down towards the debt. But most importantly got that money in to our system.
Last year Japan dropped their corporate tax rates which left the United States with the highest tax rate in the world as think progress.org hated to report. But they tried to put the progressive kibosh on that by pointing out that most corporations don't pay that much. Then they brought out this tidbit. Even as profits for American corporations hit a 60-year high in 2011, their effective tax rate hit a 40-year low, and the U.S. collects less in taxes as a percent of the total economy than every industrialized country in the world save Iceland.
Can they not see the answer pimp slapping them? They are ticked off that the companies are paying lower tax rates, so they propose tougher tax laws to force companies to chose between 100 other countries and the U.S. Those companies, if forced to choose between billions in profits and staying here, will obviously choose the billions. The liberals look at this like we're in a marriage. The wife can tell the husband that his behavior isn't going to be tolerated. And if he doesn't shape up she will divorce him and clean out his bank account. But we're not married. We're more like a hooker trying to sell our services. There's plenty of other countries working our block. We may be the prettiest one but the documentary "American Pimp" taught us that when it comes to saving money, business men will make some sacrifices. And the most successful girls on the block aren't the hottest ones but the ones willing to hustle! America needs to get over itself and realize these bidness men got lots of options! And like we learned in that other documentary about hookers, "Pretty Woman", we don't have to kiss Apple or any other corporation on the lips. We'll save that for the corporation who really loves us. 
