The FT has reported this morning that Apple raised $6.5 billion in new loan capital yesterday.
Apple did not, of course, need the money. It has well over $100 billion of cash held offshore. But that's the point: the money is offshore and so can't be used in the USA without tax being paid there. And so the world ends up with the absurd position that Apple said of its new loan, again according to the FT, that the funds would be used for:
general corporate purposes, including repurchases of our common stock and payment of dividends under our programme to return capital to shareholders, funding for working capital, capital expenditures and acquisitions and repayment of debt.
It's not the first time Apple has borrowed money for this purpose. It apparently bought back nearly $45bn in stock in the 12 months to December 2014, following $26bn of such purchases in the previous year and about $2bn in 2012. A significant part of his programme has been paid for by US borrowing precisely becuase it can't use its own money to pay shareholders as that would mean it was taxed.
Instead the absurd reality is that Apple can borrow in the US, and get US tax relief on interest paid, when the sole reason for the borrowing in that country is that it does not want to pay tax there on money it already has. In other words, the US taxpayer is now subsidising Apple's tax avoidance through tax relief given, and is in the process subsidising the accumulation of wealth by those who own Apple.
Lobbyists argued the measures would damage the competitiveness of big companies.
No it wouldn't. It would damage the ability of large companies to play tax systems off against each other whilst claiming tax subsidies from states for which there is no justification barring reinforcement of their ability to ensure smaller business cannot compete with them.
It's time to get real here. And to remind those big business lobbyists that they are not supporting competition, fair or otherwise. They are supporting monopoly. It's tax justice that supports fair and open competition by opposing such abuses. The media should take note.