Re: Rules are not equal
Santa from Exeter,
The US corporation tax scheme doesn't quite work like that. At least where the US have a dual-tax agreement - in which case you can set local taxes paid off against your US ones - and only pay the difference. Which is broadly what you can do for income tax - it's just terrible when you're in a country without one.
So US corp taxes may be deferred on foreign profits held off-shore. Until those profits are repatriated. Which is why Apple were borrowing money in order to pay dividends and leaving so much cash invested abroad.
Then as soon as the Irish payment was forced, they agreed to repatriate a load off cash to the USA and pay tax on it. Knowing this would be offset against the EU bill - and thus make it a political issue in the ongoing campaign to get US corp taxes reduced.
One of the reasons all this money was sloshing round in Europe was that stupid deferrment rule. If you had to pay the tax anyway, there would be no incentive to do this. But because you can, you stick the money in bonds and hope for a lucky day when you can persuade a US government to give you a one-off tax holiday. Then bring it all back, rinse and repeat.
The correct answer is to stop deferrment, but for the US to lower corporation tax and/or dividend tax - both being high at around 35%. An effective tax rate on dividends of 70%-ish encourages companies to hold inefficient huge piles of cash, rather than spend it or give it back to shareholders to spend. Deferrment made a bad situation worse. Oh and without dividends, companies are incentivised to reward shareholders by boosting stock values, leading to all sorts of horrible short-termism - where regular dividend payments (hopefully) encourage more long-term thinking.