back to article Apple has THREE TIMES as much cash as US govt, TWICE the UK

Apple has three times as much cash on hand as The US government, and over twice as much as the UK. These figures come to us from the Bank of America's wealth-management arm, US Trust, as reported by London's Telegraph. In its most recent quarterly SEC filing, Apple reported that it had $158.8bn (£94.9bn) in cash and cash …

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  1. Anonymous Coward
    Anonymous Coward

    The UK and US Gov

    Doesn't have any cash, just IOUs

    1. Destroy All Monsters Silver badge
    2. ZanzibarRastapopulous

      Re: The UK and US Gov

      Yep, real wealth is about credit worthiness.

  2. Eddy Ito

    "What's wrong with this picture?"

    It's that if an individual tried to offshore a few bucks the IRS would be harassing everyone they know in the quagmire that is the US tax code. Why can't I be a multinational conglomerate?

    $DIETY help the US expat who marries a non USian abroad.

    1. Stuart Castle Silver badge

      Sounds like something I once heard. It went something like this;

      If you owe the bank £200, they've got you by the balls. If you owe them £200 million, you've got them by the balls.

      I think the problem is that people or corporations with a lot of money also tend to end up with a lot of power. Even if they don't, the perception is often that they have power, which still makes people a little scared.

      Look at Vodafone. They owe 10s if not 100s of millions in VAT, yet HMRC was proud to announce that they'd reached a deal with Vodafone even though that deal involved Vodafone paying a fraction of what they owed. Yet, a local businessman I know of owes around £8 million and they are going after the lot. Don't get me wrong: He owes the money, he should pay it back, so I am not defending him. It just seems that when people do bad things at that high a level, those in power suddenly don't know how to deal with it.

      1. Sir Runcible Spoon Silver badge

        "those in power suddenly don't know how to deal with it."

        Personally I think they know *exactly* how to deal with it, it just isn't for *our* benefit.

      2. Anonymous Coward
        Anonymous Coward

        But if the bank owes £20bn, then they've got us by the balls again :-(

      3. Bullseyed

        "If you owe the bank £200, they've got you by the balls. If you owe them £200 million, you've got them by the balls."

        Makes sense. If you owe them 200, they can make you sell your car or grab your paycheck or whatever and get the money. Chances are you have no actual possessions worth 200 million that they can just come take, so they're much more dependant on you playing nice with them and being successful so you can afford to pay them back.

  3. Anonymous Coward
    Anonymous Coward

    Maybe the US government should make a Cyprus style bank raid....

    1. Destroy All Monsters Silver badge

      Currently they are pumping the cash from the print shop INTO the banks to keep Wall Street going. Do not expect anything to happen before this goes really sour.

  4. Tom 35 Silver badge

    "US Congress is too paralyzed to overhaul and too fractious to rationally orchestrate any sort of repatriation strategy."

    So time for another tax free holiday for billionaires?

    1. Vociferous

      > So time for another tax free holiday for billionaires?

      What would fix the problem is a tax on financial transactions. It's currently much more profitable to speculate in the financial sector than to actually make something.

      1. Anonymous Coward
        Anonymous Coward

        A tax on financial transactions.....yey! Hang on - what's that going to do to things like pensions? Oh.. right....good job we all like working then.

    2. NeilMc

      Most of those in the Senate are the so called billionaires or are on the payrole of the Billionaires.

      So those Turkeys will not be voting for Christmas

  5. RTNavy

    What Cash?

    Just bunches of 1's and 0's, no actual real paper, it can disappear just like your Bit Coin :)

  6. JassMan Silver badge
    Flame

    They have to keep all that moolah offshore

    so that they can buy jollies for the congressmen who they rely on to write the laws that let them get away with all the loopholes.

    Whoever wrote "Government by the rich for the rich" may have thought he was being sarcastic but never has a truer word been written in jest.

    1. RobHib
      Thumb Up

      @JassMan -- Re: They have to keep all that moolah offshore

      "Whoever wrote "Government by the rich for the rich" may have thought he was being sarcastic but never has a truer word been written in jest."

      Right, it's fucking disgusting! If we did the same by tiny fractions then they'd lock us up for life and chuck away the key.

      Modern 'democracy'—if it can be called that—has always preferentially benefited the rich.

  7. ecofeco Silver badge

    Eff you!

    We got ours!

    1. Vociferous

      Re: Eff you!

      Ah, the battlecry of Libertarianism!

  8. Vociferous

    "What is wrong with this picture"?

    At a wild guess, that it's more profitable to speculate with money than to invest them in manufacturing.

    This money isn't just backup for a rainy day, laying around in a vault, they're working, generating more money -- and investing the money into production facilities has lower return than leaving them in the financial system.

    In short, these enormous "reserves" indicate perverse incentives.

    1. ptmmac

      Re: "What is wrong with this picture"?

      Apple's money is sitting in US Treasuries making about 1.5-2% per year. As of result of this Apple is very slowly losing it's money to the ultimate tax-- inflation. Apple has no interest in investing the money per se. The cash on hand sitting in their accounts works as a strategic reserve that allows them to purchase entire factories that are a critical part of their supply chain. Apple purchases the equipment necessary for making their devices and keeps the tax benefits of depreciation on their tax return. Apple also pays more in taxes in America as a percentage of sales then 99% of the population pays on their own income (I am not counting Social Security as a tax since there is a financial payback given after age 65). Many individuals have equal marginal tax rates, but very few pay more that 25% in effective tax rates. 26% is Apple's effective tax rate after all the management of taxation risks world wide.

  9. Fan of Mr. Obvious

    "American government has reserves of just $48.5bn..."

    ...and dropping. The just keep taxing the snot out of us, trying to get more people to get on government assistance. So long as they keep raising taxes, and they will keep raising taxes-- or inciting penalties that are not taxes until challenged in court, which then magically become taxes so they can stay on the books --companies will continue to play the shell game, tax paying citizens will keep losing ground to becoming self sufficient with their own income, and the kings (um-sorry, meant government officials - please don't drone me), will blindly continue on as if they had just pulled a kitten from a tree.

    1. Vociferous

      Re: "American government has reserves of just $48.5bn..."

      FYI, you've got lower taxes than at any point in modern history, and lower taxes than most of the industrialized world.

      1. Fan of Mr. Obvious

        Re: "American government has reserves of just $48.5bn..."

        I have heard that, but I guess when I look at my check and add up everything they take, including the things that are the traditional "income tax" I have to say it is a very big number. Not saying it is apples to apples, but I question if the notion includes everything I, along with my employer, is forced to cough up as a result of my having a decent job.

        So to be clear, not saying your statement is not true. Just saying that the actual percentage taken beyond "income tax" is significant.

        1. Irony Deficient

          Re: “American government has reserves of just $48.5bn…”

          Fan of Mr. Obvious, the only things that your employer is forced to cough up to the Federal government for employing you is matching your Social Security (6.2% of first $117,000 of income) and Medicare (1.45% of all income) taxes, and a Federal unemployment insurance tax (theoretical maximum of $434 per year, but most employers pay $56 per year) which isn’t shown on your paycheck.

          Your own cough-ups to the Feds include your own Social Security and Medicare taxes, a possible additional Medicare tax (0.9% of income above $200,000), and your income tax, with the percentage increasing by income bracket, with a maximum rate of 39.6% for income above $409,000 if single, $460,050 if married.

          Compare this to another industrialized nation, such as the Netherlands. A Dutch worker would pay taxes of 1.1% to a survivor’s pension, 12.15% to long-term medical care, and 17.9% to an old age pension (if under age 65), all of these on the first €33,363 of income. An additional 7.1% tax of the first €50,064 of income goes to short-term medical care. The highest income tax bracket is 52%, which starts at only €55,992, regardless of marital status. Now compare some of the taxes that aren’t found on paychecks: Dutch value-added tax is 21% on most items (compare that to our state sales tax rates, never mind our absence of a Federal sales tax). Gasoline and diesel fuel in the Netherlands are taxed at far higher amounts per liter than they are here.

          I agree that the actual percentage taken beyond income tax is significant. If everything that the Federal government takes from your paycheck surpasses what the Netherlands takes from a Dutch worker’s paycheck, I’d be curious to learn what the breakdown of those takings is.

  10. Joe Gurman

    Ought to point out

    ....that the deadline for filing US tax returns is April 15, and a lot of people who owe taxes wait until the last minute to file, or even request extensions (which are usually grants automatically), so early is April is probably the time of year when the US Treasury has the lowest cash reserves of the year. Just sayin'.

    1. Anonymous Coward
      Anonymous Coward

      Re: Ought to point out

      It really doesn't matter. Since the US spends more than it takes in, it sells treasuries to make up the difference. They've got a pretty good idea of how much will be coming in and plan sales based on that. So on average they'll have around the same amount of cash on hand year round.

      1. Joe Gurman

        Re: Ought to point out

        That's true, but not relevant. The comparison was of cash on hand, not he issuance of paper (bonds). Apple can't print money, but they can issue bonds (with the help of a bank) if they want to, though I can't see why they'd want to other than taking advantage of near-zero interest rates. Governments, on the other hand, almost all issue bonds both to cover deficit spending (if they need it) and help pay interest on earlier bond issues.

        And no, the US Treasury does not have the same amount of cash on hand all year round. The cash total includes the Federal Reserve Account (and remember, they get to print money if they want) and "tax and loan note" accounts.... which vary radically from month to month during the year. There are other categories of liquid assets, as well, but they tend to be smaller.

        All these numbers are pretty small beer compared with the ~ $3.65T (as in trillion) total outlays planned for the next US fiscal year.

    2. Bullseyed

      Re: Ought to point out

      I'm a bit puzzled as to why the cash reserves of the US even matter. If the government were running at optimal efficiency, their cash reserves would be zero.

      Now realistically they need to be liquid enough to pay wages and whatnot, but any company holding $100BN+ is being financially irresponsible and not getting good ROI. Now caveat there is if they're gathering cash for M+A move or for investment in working capital or whatever, but based on how long we've been hearing about Apple's piles of cash, that is not the case.

      Finally, kind of interesting how Apple is always compared to the US gov when you hear about this kind of stuff instead of other tech companies. I guess fanboys can feel good when they say Apple has 3 times the cash of the government, but not as good when they say about 2 times as much as Microsoft.

  11. southpacificpom
    Megaphone

    Monopoly

    From the borrowing governments to the high-tech start ups "worth millions" but never turn a profit - the money they have is worth as much as Monopoly money...

  12. Random Q Hacker

    but you don't understand...

    Taxes are TOO HIGH! If only we taxed multinationals less, they would hire more, train new graduates, and put more back into the economy! Oh, wait, they are already sitting on hundreds of billions?

    Maybe some of those graduates they didn't hire will learn how to hack foreign banks.

    1. Bullseyed

      Re: but you don't understand...

      "Taxes are TOO HIGH! If only we taxed multinationals less, they would hire more, train new graduates, and put more back into the economy!"

      If Apple's profit rate fell slightly, it could trigger a mass sell of of their stock. Apple's market cap at EOD yesterday was $463.03BN, at $519.61 a share. Therefore, with their $158.8B on hand, they could keep their market cap the same (if they needed to) if the stock fell as low as $341.41 a share.

      I suspect this kind of "insurance" is why they keep that much cash on hand. It is also part of why you hear investors demand stock buy-back programs.

  13. localzuk Silver badge

    Waiting for the corporate bailout

    When the corporations bail out the government and take over... Then we only have to wait a few decades until time travel comes in handball form...

  14. Anonymous Coward
    Anonymous Coward

    Modern Monetary Theory!

    "What's wrong with this picture?"

    You mean, aside from that it's completely insane to ask how much money a government that uses a fiat currency has? It's like asking whether the scoreboard at a football match has enough goals.

    Governments with a fiat currency can create money whenever they feel like it, and any government running a surplus is removing money from the private sector.

    The idea that fiat currencies work the same as your household accounts, so should be "balanced" is insane...

  15. Ossi

    Should say 'currency reserves'.

    The government reserves referred to here are actually currency reserves. Holding another country's currency is effectively giving the country a free loan - if you want to hold $1 billion dollars of reserves, you have to sell the US 1 billion dollars' worth of stuff, and then just sit on the money that's paid to you. They've got stuff, and you've got $1 billion not earning any interest. In other words, there is a cost involved in holding foreign currency. So, the rational thing is to hold the minimum necessary reserves. The US and the UK don't need large reserves, because they have stable currencies which are themselves held as reserves by other countries (a particularly nice situation for the US as it's getting lovely free loans from all over the world). Their reserves are small not because they're in some dire economic situation, but because they don't need them.

  16. codejunky Silver badge

    The difference

    The govs didnt earn the money and apple did. I am not a fan of apple tech at all and generally avoid it out of preference, but they have a fan base. Same applies to any successful private company.

    On the other hand we have gov's who take money by force. People generally agree with certain public services but we dont tend to condone the waste and abuse our money takes. In the UK we are still watching an ongoing expenses issue. Outside of that we have private companies surviving purely on public funds but 'officially' not public sector.

    1. codejunky Silver badge

      Re: The difference

      So 2 people like giving tax money but dont choose to buy anything from private business? I wonder if they volunteer to over pay tax and of course have no ISA or any other legal tax reduction?

      Is it wrong that the people we choose to give money to have more money than those who take peoples money by force?

  17. David Glasgow

    Er wha?

    The UK has 1.5 times the reserves of the US? Really? What does that work out per capita? Or per square Kilometre?

  18. johnwerneken

    typical of mobs

    USA got mobs and interests now, not voters...most anything to do with the public's support is corrupt, by the public unfortunately. So we have an allegedly peaceful and egalitarian and rights-respecting government spreading poveryy, was, assassination, and espioage. Oh yea the tax system is ass-backwards as well.

  19. kmac499

    Modest Proposal

    Dear Taxman;

    If you are really that pissed off with multi nationals parking cash out of your reach, why not get your colleagues in the Patent Office to withdraw their support for said multi-nationals patents on

    Rounded corners

    Tiles

    Swipe to move etc...

    If for no other reason than the sheer visceral joy of seeing limo fulls of corporate patent lawyers being made redundant..

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