Apple Joins Group Pushing Corporate Tax Holiday

Great Big Bags of Cash
Apple has joined a group of other major corporations looking to fund a lobbying effort to get a major tax holiday on the enormous amount of money being earned (and held) in overseas banks.

According to Fortune magazine, Apple, Oracle, Cisco, as well as energy and pharmaceutical firms want to convince lawmakers to give them a one year tax holiday that would allow them to bring some $1 trillion back to the U.S. at a 5% tax rate, instead of the 35% those funds would be subject to today.

Apple has one of the largest cash hoards on the planet, officially at $59.7 billion, but that amount has likely passed the $60 billion mark this quarter. Much of that money is earned outside the U.S., which is the case for many large U.S.-based multinationals.

While outside the U.S., it’s difficult to put that money to work in U.S. R&D and other U.S. capital expenditures, and it’s also harder to pass the money on to shareholders (not that Apple ever passes its profits over to shareholders). Fortune lays out the history of a successful 2004 effort at a similar tax holiday, and how companies are using that experience to make their case.

In 2004 a similar measure passed on the belief that companies would put that money to work in the form os R&R and other investments (as noted above), but a study found that between $0.60 and $0.92 of every dollar of the $362 billion that came back into the U.S., companies went back to shareholders, instead of investments into the companies involved.

Senator Barbara Boxer (D) of California was a sponsor of past tax holiday measures, and many of the firms involved with the new effort are based in her state, including Apple. According to her, the measure being worked on currently puts tighter restrictions on those funds.