Apple CEO Tim Cook Credits GOP Tax Plan For Future $350 Billion US Investment
Thanks, Trump?
Apple has more money than they know what to do with. Their cash horde sits at over $200 billion, but much of it resides in overseas bank accounts. That apparently is set to change as Apple's CEO Tim Cook has announced a plan to repatriate most of their cash horde to the United States. "Planned capital expenditures in the US, investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $75 billion of Apple's direct contribution," the company said. The record tax payment is said to amount to approximately $38 billion.
President Donald Trump took some credit for the news via a tweet.
I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA! https://t.co/OwXVUyLOb1
— Donald J. Trump (@realDonaldTrump) January 17, 2018
Cook further detailed this plan in an ABC News interview with Rebecca Jarvis. Apple claims that they will create 20,000 new Ameican jobs and build a second campus somewhere in the states. Cook confirmed that the new campus will not be located in California or Texas, two states where the company already has a massive presence.
Cook also sent out a letter to Apple employess regarding an increased stock bonus for existing employees. Clearly, Apple will be using some of this repatriated cash for share buyback and dividends, but they are trying to spin the PR towards creating jobs and investing in America.
Team,
This morning we announced a new set of investments Apple will be making over the next several years, including expanding some of our existing campuses and establishing a new one. Were also extending our efforts in support of coding education, ConnectED and STEAM programs. I encourage you to read about these announcements on AppleWeb.
Im excited to let you know that were also increasing our investment in our most important resource our people. You are the heart and soul of Apple and we want you to share in the success made possible through your efforts. Your dedication helps Apple make the best products in the world, surprise and delight our customers, and ultimately make the world a better place.
To show our support for our team and our confidence in Apples future, well be issuing a grant of $2,500 in restricted stock units to all individual contributors and management up to and including Senior Managers worldwide. Both full-time and part-time employees across all aspects of Apples business are eligible. Details are available on AppleWeb.
We also know how much our employees value giving back to the communities where we all work and live. Im happy to announce that starting immediately and running through the end of 2018, Apple will match all employee charitable donations, up to $10,000 annually, at a rate of two to one. In addition, Apple will double the amount we match for each hour you donate your time. Last year, your generosity helped people around the world through causes that are important to you. Im proud that this year well be able to build on that tradition of giving.
Apple's success comes from our people and I am proud to work alongside each of you. On behalf of the Executive Team, thank you for your hard work and dedication.
Tim
Cook commented to Jarvis in the ABC News interview that he does believe that the GOP corporate tax reform plan will help create jobs in the United States, but only time will tell if this is more smoke and mirrors from one of the world's most secretive companies. At the very least, Apple shareholders will be happy to see the money that had been previously sitting overseas back home and available for investment, acquisitions, share buybacks and dividends.
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replyAsif Khan posted a new article, Apple CEO Tim Cook Credits GOP Tax Plan For Future $350 Billion US Investment
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I am more concerned that they are straight up lying about this and will just use the repatriated cash primarily for buybacks and dividends. That would not help the economy as they are trying to say it will.
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That makes me sad.
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Perhaps I’m missing something, but I’m imagining a board contemplating a nebulous, long-term “good for the economy” proposition vis a vis a short-term, concrete “good for the bottom line” plan and having a hard time concluding that the reasonable board member would go with the former rather than the latter.
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Agreed, I mean, they've said they're going to use it to hire another 20k workers in the US and what not, but we'll have to see what they actually do with it.
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There's zero chance they are going to hire 20k workers that they weren't already planning to hire. The only difference is now they're paying for it with repatriated cash instead of borrowing, with that cash as collateral, at insanely low rates like they could have done before.
The expatriated status of those profits has never prevented a company from effectively using them for investment purposes.-
True, I guess it just means demand for loans would be lower for a bit with companies like Apple repatriating, which theoretically would mean more bank competition, but I doubt that will end up being the case.
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are you talking about CAPEX across the industry? Like how does AWS factor into capex? A bunch of companies no longer buy servers and such to host their own services, they use AWS/Azure. So capex became opex and it may even be net cheaper now over time (given the scale advantages AWS enjoys compared to you buying a few servers and dynamic capacity etc) but it would be hard to argue that's some sign of decreased business success/investment.
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Apple is also paying a $38 billion one time tax fee to bring the money in. The 15.5% tax is paid on all overseas profits, regardless if they transfer the money back or not.
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A lot of tax reform bills come with cuts to services the poor use. In general it's not going to effect their annual tax burden though of course.
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Cuts to services to pay for the tax cuts of the wealthy and corporations.
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company likes corporate tax cut, woah
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Congratulations on ignoring the commitment to invest $350 billion in the US economy.
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Apple building a new campus and hiring 20k people has exactly nothing to do with US tax strategy. But yes, companies are also smart enough to know that they should make sure to give the appearance that a corporate tax cut is good for us too so they continue to get them. See also AT&T, Comcast, etc.
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Did you read the article? I have quite a bit of healthy skepticism in it.
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The best part of the tax plan is it has caused some behind the scenes discontent especially with the office trump-tards that companies are announcing raises or reinvestment and our plan is fuck you got mine.
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