David Rosenbloom Comments on Americans Paying Apple Millions to Shelter Overseas Profits
Over the years, Apple Inc. has become the poster child for U.S. multinationals accused of sheltering overseas profits to avoid the IRS. What's gone largely unnoticed is that it's been paid more than half a billion dollars by the U.S. government to do just that.
Whatever the case, the need to address companies' untaxed profits may be one of the few things Republicans and Democrats can agree on. During the campaign, both Trump and opponent Hillary Clinton proposed one-time tax breaks on overseas earnings (a so-called repatriation tax holiday) to help fund competing infrastructure plans.
Yet absent a wholesale tax overhaul to close the repatriation loophole, such one-offs are Band-Aids that will only make things worse over time, according to H. David Rosenbloom, an attorney at Caplin & Drysdale and the director of the international tax program at New York University School of Law.
He pointed to a similar 2004 tax holiday under President George W. Bush, which ultimately led companies to accumulate more profits abroad after it expired. Almost all the repatriated cash during that time was used for shareholder rewards and executive bonuses-rather than investment and hiring in the U.S. that many companies promised.
Last time, "it just encouraged companies to send more money abroad and wait for the next amnesty," he said. "It would be really foolish to do."
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Excerpt taken from the article "Americans Are Paying Apple Millions to Shelter Overseas Profits" by Andrea Wong for WealthManagement.com.