Professor Elam

Monday Feb 2, 2015

Apple AAPL has a cash stash of about $178 B. So why is Apple selling $5 B in notes and bonds?

If Apple brought the money back to the US it would pay 35% income tax. It is cheaper to borrow at these low rates and avoid the tax.

The President wants a 14% tax on that money now and 19% on future earnings.

I think the better idea is a  2015 Tax Holiday. Let companies bring the money back tax free and invest in property plant and equipment.

If the government gets the money it will vanish into favored pockets just as the QE money did. What happened to all those shovel ready projects?