[ixtli]

This is exactly the thing that renders me speechless every time this comes up in casual conversation. People generally agree that apple and other tech companies hoarding money in Ireland to avoid tax is Bad™. Then, in the next breath, they say that removing the tax burden to get them to move that money back into a US bank is somehow Good™. But what does it matter if the government can't take a cut? Why do people who don't profit off of apple care which bank it's in?

[jaredhansen]

Nobody cares "which bank it's in" - but if a company has $1B in out-of-US cash not currently subject to US tax, and bringing it into the US will cost them 30% of it, they may (sensibly, in many cases) just elect to leave it sitting wherever it is.

As to "what does it matter if the government can't take a cut?" --- the government does take a cut, and the reason it matters is that the lower rate will, on the margin, encourage cash repatriation.

Remember too that firms know they will be taxed in the future at (unknown, but estimable) rates, and today's rate will be compared against firms' estimates of current rates.

So in terms of the government's cut I forget the numbers in the current plan but say the corporate tax rate goes from 30% to 20%, and Apple decides that 20% is As Good As It's Likely To Get, and decides therefore to bring $1B of cash into the US that at a 30% rate it would have left elsewhere -- the US gov now gets 200M, rather than the 0 it would have gotten if the tax rate had stayed where it was.

[danjayh]

Also you seem to be under the incorrect assumption that capital will just sit in a warehouse as bricks of $100 bills collecting dust. Nothing could be further from the truth. In reality, one of a few things will happen:

1) Apple will spend it on capital investments (factories, campuses, data centers, etc.) in its business. Doesn't benefit the government, but benefits the country.

2) Apple will spend it on R&D / employees. Doesn't benefit the government directly, but benefits the country.

3) Apple will dump it into an American bank. That bank has a reserve ratio that is relatively low. It will lend several times the amount that Apple deposits to people or corporations who will do 1) or 2)

4) Apple will spend it on buybacks and dividends, which ultimately ends up in the hands of Apple's owners (you and me through our 401(k)'s, and probably a bunch of rich people as well), who will do 1), 2), or 3)

So, whether or not the government gets a cut, it benefits everyone who actually lives here.

[pg314]

You seem to be under the incorrect assumption that it is currently sitting in a foreign warehouse as bricks of $100 bills collecting dust. Nothing could be further from the truth. According to page 49 of Apple's yearly report [1] at the end of 2016 its cash and equivalents were invested as follows (amounts in millions): * U.S. Treasury securities 41,697 * U.S. agency securities 7,543 * Non-U.S. government securities 7,609 * Certificates of deposit and time deposits 6,598 * Commercial paper 7,433 * Corporate securities 131,166 * Municipal securities 956 * Mortgage- and asset-backed securities 19,134

The repatriation is just a tax/accounting fiction. Yes, Apple now has more flexibility to do with that cash what it wants (mostly return capital to shareholders through dividends and buybacks), but on aggregate for the economy it doesn't make a huge difference.

[1] http://investor.apple.com/secfiling.cfm?filingid=1628280-16-...

[danjayh]

I know this post is a few days old, but having that cash invested in treasuries, bonds, CDs, etc. is as close to a warehouse as it can possibly get. I strongly suspect that a good chunk of it will be spent on capital investments once it's repatriated.