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Washington Post columnist Allan Sloan observes that Apple’s plan to buy back $60b of its own stock will reduce the company’s tax bill by more than the cost of the loans it will take out to fund the share repurchase program.

If you’re wondering why a company with a cash balance of $145b would need to borrow $60b, it’s all about tax …

Around two-thirds of that cash hoard is held by Apple subsidiaries outside the USA, and if Apple brought the cash back home it would have to pay 35% corporation tax. Borrowing the money means Apple pays interest, but the tax saving more than cancels this out, points out Sloan.

Let’s say Apple borrows money at an interest rate of 3 percent a year (which is more than it would probably pay), and uses it to buy back stock at the current price of about $410 a share. Each share that Apple buys back will reduce its annual dividend obligation by $12.20 a share, at the company’s current dividend rate. The interest on the borrowed money would be $12.30 a share — about the same as the dividend. But interest is tax-deductible, and dividends aren’t.

At a 35 percent tax rate, the borrowed money would cost Apple $8 after taxes for each share it bought back. That’s significantly less than the $12.20 after-tax cost of its $12.20 dividend.