Taxpayers Pay $163 Billion In Interest To Apple, Cisco, Google, Microsoft In Offshore Accounts
United States taxpayers make large interest payments to the top four technology firmsfor the $163 billion in US government debt the companies own and shelter in tax-freeoffshore accounts.
Apple, Cisco Systems, Google, and Microsoft legally hold $124 billion in US Treasury securities and $39 billion in US government agencydebt in accounts overseas, allowing them to avoid the 35 percent (maximum) corporate tax rate in the United States, according to new Securities & Exchange Commission reports.
Together, the companies would be the 14th biggest overseas holder ofTreasury securities, just ahead of countries like Norway, Singapore, and India.
“If a US multinational puts its offshore cash into a US bank and uses the money to buyUS treasuries, stocks and bonds, those funds ought to be treated as having been repatriated and subject to US tax,” Sen. Carl Levin, chair of the Senate permanent subcommittee on investigations told the Bureau of Investigative Journalism.
These four top technology giants have $255 billion in “cash, cash equivalents, and marketable securities…in their foreign subsidiaries,” the Bureau of Investigative Journalism reported. (Emphasis added, The Dispatch)
If that total amount was held onshore, making it subject to being taxed by the US government, it would yield $89 billion – or 17 percent of America’s projected $514 billion budget deficit this year.
Overall, the companies hold $333 billion in domestic and foreign accounts, making them the most lucrative American firms outside the financial sector.
The companies also hold $93.3 billion of corporate, municipal, and sovereign debt.
“This is a ridiculous situation,” said University of Michigan professor of law, Reuven Avi-Yonah. “The result is US taxpayers pay interest on this money as opposed to the government receiving taxes. Bringing this cash onshore and taxing it at 35% would significantly help reduce the annual deficit of theUS government.”
Credit: The Global Dispatch