Apple hasn’t exactly seen eye-to-eye with president-elect Donald Trump, responding dismissively to Trump’s call for a boycott of Apple products, and witholding support from the GOP convention. But it seems they do agree on one topic: allowing companies to repatriate profits from overseas subsidiaries at a reduced rate of tax.
Apple has repeatedly called for tax reform to permit this, and last month Trump promised (video below) to do so while speaking at the Economic Club of New York prior to the election …
This wealth that’s parked overseas, nobody knows how much it is, some say it’s $2.5T, I have people that think it’s five trillion dollars. We’ll bring it back, and it’ll be taxed only at the rate of 10% instead of 35%. And who would bring it back at 35%? Obviously nobody, because nobody’s doing it […] By taxing it at 10% rather than 35%, all this money will come rolling back into our country.
As of its latest earnings report, Apple had cash reserves of $237.6B, much of which is sitting overseas. Tim Cook said back in 2013 that 35% was a ‘very high’ cost to repatriate cash to the USA.
If you look at it today, to repatriate cash to the U.S., you need to pay 35 percent of that cash. And that is a very high number,” Cook said in an interview Thursday. “We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable.
Trump is not the first to propose a tax break for companies in Apple’s position. The Senate considered a tax holiday, though nothing came of it.