Apple to Invest $350B in US over 5 Years & Pay $38B in Repatriation Taxes

FrgMstr

FrgMstr

Just Plain Mean
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Apple is bringing a huge amount of its capital back into the USA and paying federal taxes on that money. It is looking to boost its domestic image with over $350B in American manufacturing over the next 5 years. Apple is also suggesting that 20,000 new jobs will open at new campus that will be dedicated to its AppleCare services.


For years the company infamously refused to repatriate billions in overseas cash unless it was granted a tax "holiday," but the company is presumably going ahead because of lower corporate tax rates advanced by the Republican Party and U.S. President Donald Trump.
 
Not a surprise. Money is all it took to get Apple to put some money in U.S. banks. easy-peasy. Well, until some other country lowers the corporate tax rate lower than what we have now, then all bets are probably off.
 
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More PR bullshit.

Apple is one of the defining global grandmasters of tax avoidance schemes among other major U.S. multinationals - they pay practically nothing while giving hundreds of millions to firms that do nothing but find and help their clients exploit tax loopholes abroad. It's pretty disgusting actually, especially when ordinary Joe gets his paycheck tax raped for every last cent with no such tax avoidance schemes available to him.

Irish officials began to crack down on the tax structure Apple had exploited. So the iPhone maker went hunting for another place to park its profits, newly leaked records show. With help from law firms that specialize in offshore tax shelters, the company canvassed multiple jurisdictions before settling on the small island of Jersey, which typically does not tax corporate income.

Apple has accumulated more than $128 billion in profits offshore, and probably much more, that is untaxed by the United States and hardly touched by any other country. Nearly all of that was made over the past decade.
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I guess they are still selling their product well. Most that I work and hang out with that used to be Apple fans don't even care about them anymore. I feel like their declining but maybe my view of them is skewed. On average there are very few people that use Apple products around me these days.

What is Apple doing lately to stay relevant?
 
I think app store revenue grew almost 40% last year so there is that. I think they had more revenue than McDonalds, and will be larger than the global movie industry sometime in 2018 (forecasted).

Rahh said:
I guess they are still selling their product well. Most that I work and hang out with that used to be Apple fans don't even care about them anymore. I feel like their declining but maybe my view of them is skewed. On average there are very few people that use Apple products around me these days.

What is Apple doing lately to stay relevant?
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Retronym said:
I wish they would bring back the real ipods.
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You mean the HDDs that would only work on Macs, only allow you to use it for music, and even then only if you bought them through iTunes or were DRM free?

I mildly kid because for as good as the iPods eventually became (Which they did), they were a mess for the first few gens. Which is to be expected. I just remember people freaking out over them while they were still so limited in what they offered.
 
I freaked out. I grew up on walkmen and discmen and even minidisc players.

Listening to Steely Dan in crystal clear audio without physical media was a revelation I will never ever forget.
 
the 38 billion is not a tax on 350 billion "effect" on the economy. Reading is fundamental. They did not disclose the amount brought back which resulted in the 38 billion tax payment.

According to the OP article they said they "only" expect to directly spend about 75 billion in those 5 years - the rest is "impact" to the economy.

Better article (warning - autoplay video ads) - https://www.cnbc.com/2018/01/17/apple-announces-350-billion-investment-20k-jobs-over-5-years.html

cnbc said:
The headline from Apple is that it will make a $350 billion "contribution" to the U.S. economy over the next five years, although it's unclear exactly how the company came to that number.
....
....
It said it expects to pay about $38 billion in taxes for the horde of cash it plans to bring back to the United States. This implies it will repatriate virtually all of its $250 billion in overseas cash.
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So... about 15% according to cnbc estimates. What we don't know was how much, if any, taxes were initially paid or how much exactly they're bringing over

BB
 
DPI said:
More PR bullshit.

Apple is one of the defining global grandmasters of tax avoidance schemes among other major U.S. multinationals - they pay practically nothing while giving hundreds of millions to firms that do nothing but find and help their clients exploit tax loopholes abroad. It's pretty disgusting actually, especially when ordinary Joe gets his paycheck tax raped for every last cent with no such tax avoidance schemes available to him.
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Wow.

First of all, Joe’s paychecks are not raped. A portion determined by him filling out his w4 is withheld then when he files his taxes with the IRS and takes all the deductions he is entitled to the government refunds any excess that was withheld.

Second, nothing that Apple has done was against the law. There are many reasons tax law has been written but deductions are there to be taken. Also, Apple earned that money by providing products to people and you make it sound like they stole it from the government.

The simple fact is that high taxes have consequences. At the high 35% tax rate the US got 35% of nothing. Now they get a smaller percentage of a ton of cash. Also, that money will be going back in to the economy as wages and bonuses which will cause spending that results in more tax revenue. Its simple economics.

I think maybe your just mad because it works when you wish that it didn’t.
 
Apple have done more for the U.S. economy than Samsung ever has, yet Apple is evil, and Samsung is great in this forum.
 
Lizard Testes said:
About half the rate I'm taxed at.

This is fine.
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Apples to Oranges.


That is just the repatriation tax. There will be additional taxes levied on this money,

1. If Apple pays dividends with some of the repatriated cash, stockholders will have to pay income tax on those.

2. If Apple uses the cash as capital investment (which looks likely), their stock price will most likely increase. If a stock holder takes a profit on this increase in value, they will pay capital gains tax of 15-20% depending on their income level.
 
tgom222 said:
Apples to Oranges.


That is just the repatriation tax. There will be additional taxes levied on this money,

1. If Apple pays dividends with some of the repatriated cash, stockholders will have to pay income tax on those.

2. If Apple uses the cash as capital investment (which looks likely), their stock price will most likely increase. If a stock holder takes a profit on this increase in value, they will pay capital gains tax of 15-20% depending on their income level.
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It's gonna trickle down this time, we promise!
 
docmal said:
Wow.

First of all, Joe’s paychecks are not raped. A portion determined by him filling out his w4 is withheld then when he files his taxes with the IRS and takes all the deductions he is entitled to the government refunds any excess that was withheld.

Second, nothing that Apple has done was against the law. There are many reasons tax law has been written but deductions are there to be taken. Also, Apple earned that money by providing products to people and you make it sound like they stole it from the government.

The simple fact is that high taxes have consequences. At the high 35% tax rate the US got 35% of nothing. Now they get a smaller percentage of a ton of cash. Also, that money will be going back in to the economy as wages and bonuses which will cause spending that results in more tax revenue. Its simple economics.

I think maybe your just mad because it works when you wish that it didn’t.
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Please be just as specific for your own point, as that is what you are asking of his...

35% was not the effectual rate... many corp did not pay close to that (similar to how many poorer people pay 0% fed income).

Only a portion of that money will make it areas of the "economy" people would typically assume as beneficial or is currently advertised (lower class jobs and increased wages). Parts of it will certainly will, some will go to stock holders (upper 50% as well), the devil is in the details as this is always the case. Just like when you give to a charity you look up and see % that is actually going to the people in need vs administrative costs. The same type of evaluation has to occur here. We have to give X billion tax break to get Y billion to the intended targets... with Z billion going to the "administrators/others". Is the ratio acceptable (remember the reason is to get money into the economy, raise wages etc not just stay competitive, which is not a bad reason by itself but don't blow smoke)?



The idea of competition in tax rate is 100% on point imo... at the end of the day I agree I would rather be pragmatic and collect realistic % that would have better odds companies comply vs dodging etc.

Originally Trump mentioned removing deductions, indicating the new rate was also part of a normalization. Sometime I also completely agree with. Though I have heard this did not happen and companies maybe be paying much much less than the 21% that is on the table (remember effectual tax rate), if true this then starts to get into the corp give-away area etc.

Yes I believe even companies should have some tax obligations, we can debate what % that is and rate vs effectual rates make that more difficult (especially on the interwebs).

Another not really related point I sort of find funny in this situation... When its corporate taxes, its ok to forgive and allow these companies to fix things for pennies on the dollar... But when its illegal immigrants then tough love is in order even if they are small business owners tax payers etc. I agree with truing up clearing the books in both cases... for exactly the same reason. Its just he more reasonable action imo to get to the end state you want. Yes I understand legal loop hole vs illegal immigrant, I just don't think that technicality bears much when looking at the attitude in general.
 
Lizard Testes said:
Any company that receives a massive tax boon to the tune of many billions of dollars and doesn't at least do something for their employees is going to get publicly pilloried for it. Apple is not dumb.

That doesn't mean it's ultimately going to be a good thing. The primary beneficiaries of it are undoubtedly the people that are already wealthy, in a country that already has massive wealth and income inequality that'll just make it worse. Meanwhile reduction in tax income will likely be used as an excuse to cut things like social services and education funding, which the wealthy don't give a fig about but are enormously important to the lower and middle classes.
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Why should somebody who has done nothing but sit at home get a payout from a company that was going bankrupt ~20 years ago and ended up becoming the most valuable company in the world?

I didn't realize bringing back money from abroad was going to face backlash, then again this is Apple so logic usually goes straight out the window(s).
 
-Strelok- said:
Why should somebody who has done nothing but sit at home get a payout
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Huh?

from a company that was going bankrupt ~20 years ago and ended up becoming the most valuable company in the world?

I didn't realize bringing back money from abroad was going to face backlash, then again this is Apple so logic usually goes straight out the window(s).
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Yeah it's not really the repatriation thing that's the problem, it's not like this is the first time there's been a repatriation holiday, it's more the rest of the tax plan.
 
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