Apple, others lobby for tax holiday
Fortune is reporting that Apple is one of many major multinational corporations that are banding together to lobby the US government for a one-year "tax holiday" on foreign cash that is repatriated back to the country.
At the present time, repatriated cash is taxed at a 35 percent rate. The companies, which include Cisco, Duke Energy, Pfizer and many others in addition to Apple, are looking for a one-year window in which the rate would drop to 5 percent. Cisco CEO John Chambers has advocated the idea for years, saying that allowing the cash to be repatriated at a lower rate would stimulate investment in the US and allow shareholders to reap the rewards of their investments in the form of higher dividends (note: Apple does not pay shareholder dividends).
These companies currently have about US$1 trillion in cash parked overseas, and bringing that money home at a lower tax rate would be expected to have a positive effect on the US economy. A previous tax holiday in 2004 didn't necessarily result in new investment, but it did create an increase in shareholder payouts of between 60 and 92 cents for every dollar repatriated.
Lobbyists for the group are expected to try to attempt to have the repatriation tax become part of any corporate tax reform bill that Congress tries to pass this year.
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