The strange case of Apple’s huge hoard of dead capital
Richard Wolff tweeted this gem last week:
Exec admits Apple evades taxes; says US laws allow it. Buffoon thinks we don’t know corps buy such laws from pols: yhoo.it/1J2AzHA
In case you been living in a cave, you’ll know Wolff is talking about Apple’s massive cash hoard. It is widely estimated that Apple is sitting on something in excess of $135 billion of capital that is presently just lying around idle. Wolff argues Apple has been able to accumulate this vast hoard of uninvested capital because tax laws are written in such a way to allow it to accumulate vast sums of profit that are not taxed.
A tragedy, right? Apple is sitting on billions of uninvested capital that could be paid out in food stamps, while Washington is so short of funds, it is running massive deficits just to make ends meet.
Of course, the relevant question Wolff should be trying to answer is not why this huge hoard is not taxed by Washington, but why Apple is not investing billions of essentially tax free profits to make even more tax free profits. Aren’t capitalist firms supposed to be maximizing their profits? Why is apple just sitting on the cash, rather than investing it? Read the rest of this entry »