Apple (NASDAQ:AAPL) has finally publicly called on the government to lower taxes on repatriating cash held overseas, but the White House has no plans to hear it out.
Apple is getting ready to spend $45 billion to reward shareholders, but will not touch its overseas fund, where it keeps most of its cash. The California-based company increased its overseas reserves by 82 percent from a year earlier during this fiscal quarter, but the $64 billion will stay there until the Congress changes tax rules.
“Repatriating the cash from offshore would result in significant tax consequences,” Apple’s Chief Financial Officer Peter Oppenheimer told investors and analysts on Monday. “We think that the current tax laws provide a considerable economic disincentive to U.S. companies that might otherwise repatriate,” he said.
When companies bring back cash from abroad, they receive credit for taxes paid overseas, but still have to pay tax in the U.S., where corporate tax rates are among the highest in the world. Under current regulations, Apple stands to lose 35 percent of the money it repatriates to the U.S.
Senator Kay Hagan (D-N.C.), who introduced the Foreign Earnings Reinvestment Act to bring down taxes, told Talking Points Memo that she was hoping for a reconsideration from Congress. “Today’s announcement by Apple only highlights the need to pass commonsense legislation that would allow American companies to put $1 trillion of foreign earnings back to work in the U.S. economy,” Hagan said.
However, a White House official said there were no plans for a permanent legislation, or even a repatriation holiday. Instead, there were plans to introduce “a comprehensive corporate tax reform plan that simplifies the code, levels the playing field for American businesses and encourages investment here at home,” the official told TPM.
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