From the Bureau of Investigative Journalism:
“The US government makes vast interest payments to technology giants including Apple and Microsoft on the billions of dollars they shelter from tax offshore.
A trawl of Securities & Exchange Commission (SEC) disclosures shows that Apple, Microsoft, Google and Cisco Systems hold $163 billion in US government debt, earning these companies substantial sums in interest.
This means American taxpayers in effect pay interest to tech giants on their offshore cash which is held there for tax reduction purposes.”
How big is the problem? Well, yesterday we gave an indication of the sheer scale of it for tech and non-tech companies.
“The Bureau estimates the cash-rich digital companies hold $124bn in US Treasury securities – the remaining $39bn is held in US government agency debt. The amount invested by Apple, Microsoft, Google and Cisco is so large they would collectively be the 14th biggest overseas purchaser of Treasury securities, above Singapore and Norway.
In total, the four leading US digital firms have accumulated cash, cash equivalents and marketable securities worth $255bn in their foreign subsidiaries, which they state in SEC filings could be liable for corporation tax if repatriated to the United States.”
Financial globalisation is utterly broken. This is not how it was supposed to work: in the textbooks, or in the minds of ordinary people. This is why we exist: to push for changes that would tackle problems such as this.
“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 the US government,’ said Avi-Yonah.”
Now read on.