
Microsoft Has Nearly $93B in Overseas Cash - cl8ton
http://www.businessinsider.com/microsofts-offshore-cash-2014-8
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cpursley
This is a good case why the US should lower corporate taxes to a rate that is
competitive with other jurisdictions, or just get rid of them all-together.
Corporations don't actually pay taxes even when they do; it's the consumers
who pay for them in the form of increased prices (tax is just passed on as an
expense). Better to collect the tax at time of sale (VAT) - perhaps on a
sliding scale.

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downandout
_> or just get rid of them all-together_

We should, indeed, eliminate taxes on foreign corporate earnings. Most of that
money would wind up back here, in the relative safety of US banks &
investments. A substantial portion of that money would go to paying dividends,
which would directly generate capital gains taxes, and much of the rest would
wind up being invested here in the US.

We would be doing what we should be as a center of innovation: importing cash
from the rest of the world and using it to improve the US economy. Considering
that today this money not only generates $0 in taxes, but does not benefit our
economy in any way in terms of investment etc, this seems like something that
even politicians could wrap their heads around. Yet, it is unlikely that it
will ever happen.

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richardw
Five minutes later the argument would be "why should we pay taxes on US
earnings but zero overseas? Why discriminate against US consumers? Why are US
products cheaper overseas?"

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ryandrake
I wish I could use the same shenanigans that these companies get away with
using to avoid paying their taxes. I could just imagine my conversation with
the IRS:

"No, no, no, IRS, you don't understand! My employer didn't hire me. They hired
my fictitious doppleganger who lives in the Bahamas, where there's no income
tax. I license my name and know-how to him for a monthly fee. My invisible
clone then does all the work remotely and earns the pay check. But, since
we're really the same person, he should be able to transfer those earnings
here to me tax free! Why should I have to wait for a tax holiday to use all
this money? It's so unfair!!!"

These companies pulling this B.S. need to man up and pay their taxes like the
rest of us.

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tartuffe78
If you lived in a different country for 3 months of every year, and you had a
job, dual-citizenship, and bank account there, would you bring your money back
to the US every time you came back so that the IRS could have their share? Or
would you wait to spend it the next time you were away?

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brightsize
In the US we (individuals) pay taxes on our worldwide incomes. You'll have to
file with the IRS every year and claim this income. There's no need to "bring
your money back" for the IRS to get its share.

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hkmurakami
As usual, this is the key takeaway, imo:

 _" None of this is illegal. Far from it. A corporation owes it to its
shareholders to keep its tax bill as small as possible."_

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seanmcdirmid
And all of that money was earned overseas. It is up to the company to
repatriate it or throw it back into overseas operations. This is kind of fair:
if say Germans pay money to buy Windows, why not use some of the profit there
in Germany rather than bringing back to the states?

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bilbo0s
This makes sense to me. If you make this money overseas... shouldn't you use
the money in whatever nation you made it in to make that nation better ???? I
think people who talk about taxes really miss this point. Because the taxes
talk is all predicated on a foregone conclusion that bringing money to the US
is the best thing you can do for shareholders. I'm not sure that's true.

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tonfa
In the case of Apple or Microsoft, most of the value (r&d) is generated in the
US, so it would be fair to tax them there. Other countries already have sales
tax.

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seanmcdirmid
Most? Microsoft has 128,000 employees worldwide, 61,000 of them in the USA.

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ronnier
>Apple reported it had $137.7 billion in offshore accounts. The CTJ report
also found that Cisco had $48 billion, HP had $38 billion, Google nearly $39
billion, and Oracle $26 billion offshore

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djloche
Perhaps this is another incentive to start/incorporate companies in countries
where larger companies have large cash piles and low taxes where a higher
priced acquisition might happen compared to what would happen in the United
States. I'm not sure, but Skype could be a good example here.

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zzleeper
Don't they have to bring it back at some point if they want to pay that as
dividends? (i.e. if the shareholders want that money?)

Or are they counting on an eventual tax break on repatriations?

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Danieru
Or acquire overseas companies. Microsoft has already done this with Skype.

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nlh
I know this is oversimplified and there are unintended consequences I haven't
considered, but:

Seems like a tax holiday, structured with the right incentives (ie X% must be
invested in US-based stuff .. Real estate, jobs, etc.) would be a win for
everyone. Politicians get an economic stimulus that doesn't directly cost
taxpayers money from the budget/treasury, and the companies get to bring back
that foreign $$ at a reduced rate.

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rgbrenner
No, it wouldn't be a win for everyone. What it's really saying is that once
every decade or so, large companies that do not immediately need capital
during that period, are free to repatriate their earnings at a reduced rate.

Meanwhile, smaller companies and companies that are less profitable (and need
those funds to stay in business) are forced to repatriate funds at a
higher/normal rate.

And that difference amounts to a subsidy to large established multinational
businesses OR a surcharge to their smaller competitors (depending on how you
want to look at it).

If the rates are so high that we need a tax holiday, then they are simply too
high, and need to be lowered or restructured.

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dataminer
Is it possible for shareholders to force corporations to repatriate money back
to US?

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ayrx
What incentives do shareholders have for doing this? How does getting a
company to bring money back to the US and paying taxes on it benefit them?

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tedunangst
Dividends.

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mikehc
LOLed at Tim Cook's photo on the article.

