Apple Chief Executive Officer Tim Cook threw his support Tuesday behind President Donald Trump’s proposal for a one-time repatriation tax on company’s capital held overseas.
Cook believes that any new, low-rate federal tax on U.S. capital held overseas should be mandatory for all companies and that the proceeds should be used to upgrade U.S. infrastructure, Bloomberg reports.
“It should be a required tax,” the Apple CEO told Bloomberg in an exclusive interview. “And so you’re not asking the people that have had earnings from their international subsidiaries if they’d like to bring back money. You’re saying that, you must pay the government X percent now or over some period of time.”
The proceeds from said tax should be used “for a significant infrastructure spend in the U.S. because it creates jobs.”
Apple holds over a quarter of a trillion dollars in liquid cash — an amount greater than the total market capitalization of Ford, Tesla and Fiat Chrysler combined. Some 90 percent — roughly over $250 billion — of Apple’s anticipated cash holdings are stockpiled outside the U.S. (RELATED: Will Trump Help Apple Recoup Its $250 Billion?)
Trump promised on the campaign trail to offer U.S. firms a one-time 10 percent repatriation tax on capital held overseas. (RELATED: A Comprehensive Look At Donald Trump’s Tax Plan)
The U.S. levies an exorbitant 35 percent corporate income tax rate to earnings not only within U.S., but globally as well. Companies choose to defer these payments overseas to areas that have more favorable tax rates. For example, Ireland has been a tax haven for many U.S. firms, including Apple, although the European Commission is increasingly cracking down. (RELATED: EU Slams Apple With $14.5 Billion Tax On Apple)
The rate of the proposed repatriation tax remains largely unclear. Trump has proposed a 10 percent rate, but Speaker of the House Paul Ryan – -a notorious fiscal policy wonk — proposes an 8.5 percent rate on cash, liquid assets and a 3.5 percent tax on less-liquid investments.
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