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Apple plans new U.S. campus, to pay $38B in foreign cash taxes

369 points by chollida1 9y ago

muninn_ 9y ago
Would like to see more investment in manufacturing here in the United States. Apple has to recognize that unstable relations between the United States, the EU, and China (along with South Korea and others)could leave them in a precarious position with their physical manufacturing capabilities. If China says, give us U.S. user data, or give us the capability to build your new 3D camera or we shut your facilities down, what will Apple do? Not to mention South Korea's antics with raiding Apple's South Korean offices and whatnot. The same goes for other US firms - EU you better watch out too.
- samfisher83 9y ago
  It would need a lot of investment. You need glass makers, metal shops, semiconductor shops all close together to emulate what is there in China right now. I don't know if its really possible in the US.
  - adventured 9y ago
    It's possible. It's expensive to build out and would take a decade to do comprehensively. Apple can easily afford to do it (How badly do their shareholders want that? Not that badly I suspect). Most of the things in question have already previously been manufactured in the US at one point or another. The specialization / knowledge is already here. The base manufacturing capability, the buildings/plants, the inexpensive energy, the automation capabilities, the software, the access to cheap commodities, is already here. The US is the world's second largest manufacturer, by a very wide margin to the others down the list. Only China compares in scale globally. Call up Texas and Corning, make a deal backed with billions in investment, build the plants, and you'll be making as much glass in the US as you want within three or four years. http://variety.com/2017/digital/news/apple-corning-investment-1202424778/ http://variety.com/2017/digital/news/apple-corning-investmen...
  - leggomylibro 9y ago
    You'd need a sort of 'motor city' for electronics. Something like what Detroit was for cars, or like what Shenzhen is now. I'm surprised that no stateside port cities have tried to encourage that sort of thing; there are plenty of negative externalities, but I would still LEAP to move to such an initiative. It's like...I want to create something that could make a difference for people, but all that I see in our current tech cities is faux do-goodiness, iniquity, and seething resentment. It's a bunch of people saying that they want to save the world while reaching into the pockets of people who can't afford it, and it hurts to be unfailingly lumped into that sort of behavior.
draw_down 9y ago
All hail the job creators.
mudil 9y ago
"Apple Plans to Pay $38 Billion in Repatriation Taxes. " Imagine headline like this under Obama, how much praise he would get.
- matthewmcg 9y ago
  You could also write the headline as "Most Profitable Company on Earth To Receive $42B Repatriation Tax Break"
  - coolso 9y ago
    By the same token you could also rewrite a lot of comments in this thread, possibly including yours, as "Trump's Tax Bill Is Having Positive Effects Despite The Narrative And I Don't Like That".
  - adventured 9y ago
    That money was never coming back otherwise. So no, you couldn't reasonably write that. You'd have to enter an alternate reality where US corporations like Apple voluntarily paid the backwards, high US global profit tax.
    - ejstronge 9y ago
      This doesn't quite make sense - the decision/cost to bring the money 'into the US' depends on a variety of factors. I am not a domain expert, but the availability of cheap credit must have been a principal consideration, as well as the knowledge that a potential Republican president would offer an effective repatriation holiday. In short, there are many conceivable situations in which it might make sense to pay such a tax - we're just not in one of those at the moment. I won't address your last assertion, not having data, but I've read in many publications that the effective corporate tax rates in the US are far lower than rates in other countries.
      - adventured 9y ago
        > the decision/cost to bring the money 'into the US' depends on a variety of factors No it doesn't. Apple has been lobbying aggressively for years, including during most of the Obama Administration, to change the backwards US global tax policy (the US being one of the few countries to utilize such an approach) and or to arrange a one-time repatriation holiday. They finally got what they wanted and they're repatriating the money immediately thereafter. It depended on one thing: getting a low enough rate to make bringing the cash home modestly punishing. Apple was always clear about that, Tim Cook spelled it out in numerous interviews over several years.
krebby 9y ago
I love it. Apple gets to avoid paying taxes for years through accounting slight of hand, and then when they finally pay for part of what they owe they want a pat on the back for doing so. Corporations, man.
- IBM 9y ago
  The taxes are only one part of this announcement. >Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one. All of this is discretionary spending.
- crusso 9y ago
  they finally pay for part of what they owe You only owe the taxes that the law compels you to pay. There's no obligation whatsoever to pay a dime more. Do you personally look to pay the maximum amount of taxes that you could possibly justify through various readings of the tax code? Because I guarantee that your tax software or your tax accountant are not "taking advantage" of opportunities for you to pay more unless you look to.
  - krebby 9y ago
    No but I also don't set up a pretend subsidiary in Ireland that owns my intellectual property and pays me dividends for my freelance work. To pretend that they didn't go above and beyond to avoid paying taxes is lunacy.
    - deleted 9y ago
      [deleted]
    - sigstoat 9y ago
      > No but I also don't set up a pretend subsidiary... do you pay your state government the sales tax you owe it for all of your online purchases?
      - 9y ago
samfisher83 9y ago
If you read through the articles numbers don't seem to add up to 350B: The Tax repatriations count for 38 bil. The new capital is 30 billion. Supposed the 20000 people are all making a 200000 dollars/ years thats 20 biliion. Where does the other 250 billion come from?
- IBM 9y ago
  It comes from how much they spend with US suppliers. They're basically highlighting what their economic impact is to the US.
- adventured 9y ago
  From the link: "Apple will spend an estimated $55 billion with US suppliers and manufacturers in 2018"
  - samfisher83 9y ago
    How much of that is made here? If you look at their ICs even if its an American company most of their chips are made in Taiwan. For example apple might design CPU here, but its made in Hsinchu.
    - adventured 9y ago
      Very likely an impossible number to unravel (without Apple providing the detail). Their cost of revenue for 2017 was $144b out of $229b in sales. How much room is in there for $50b in the US and all manufacturing overseas? It would seem theoretically possible to fit all of that in. Here's their supplier list: https://images.apple.com/supplier-responsibility/pdf/Apple-Supplier-List.pdf https://images.apple.com/supplier-responsibility/pdf/Apple-S... 3M for example has six US location references. Broadcom has two US locations. Corning has one. Flextronics has one US location. Intel has three US locations. Samsung has one US location listed. Texas Instruments has several. And so on; about 40 locations in all. Does it add up to $50 billion in real US manufacturing and supplier activity? Who knows.
      - 9y ago
maxxxxx 9y ago
I hate the phrase "job creation". It sounds almost like the "job creators" are of divine nature. How about "hiring"?
- jdoliner 9y ago
  Job creation and hiring mean different things. I can hire someone for a job that already existed and was previously filled by someone else. If I bring a new job into existence, that hasn't been filled by anyone before then saying I created that job doesn't seem particularly untoward.
  - maxxxxx 9y ago
    I anybody creates jobs it's the people who buy stuff and create demand. Then someone will meet that demand and potentially hire someone. I don't think Apple "creates" jobs. It hires people for certain needs that have been created by the market. If they don't fill the need somebody else will do in a market economy.
    - jerkstate 9y ago
      I disagree, I would suspect that most Apple employees are probably engaged in creating new products that have not been bought yet..
      - jasonlotito 9y ago
        Ignoring Apple retail employees, that might be true if you assume that the new products are running a version of either iOS or macOS and that those people working on that are considered part of creating that product.
    - rdtsc 9y ago
      > I don't think Apple "creates" jobs. Can nitpick it for sure. It has billions of dollars sitting around, it can choose to open a new data center, new manufacturing plant, start a cloud offering, Uber-for-dogs, whatever. Or it can continue sitting on that money. It's not automatic. That's what people mean by "job creation". Choosing to invest the money usually involves creating new positions. Another way to look at it, is that it is location dependent. Since it is an American company, it might "hire" for a position that used to be filled in China, but the new hire is US. On the global market it "hired" someone in the US market it "created" a job.
tooltalk 9y ago
I'd like to know who those 9,000 American suppliers and manufacturers are. Other than Corning who supplies the Gorilla Glasses for almost all smartphone makers, I can't really name any significant domestic suppliers who would make up $55B of their "spending."
- zjaffee 9y ago
  Apple wants to create competition for the components they need to drive down prices throughout the supply chain. Most of their investments relate to this from camera tech to oled screens.
- dx034 9y ago
  A supplier is also the company delivering fruit for offices or cleaning utensils.
- sigstoat 9y ago
  i expect intel gets a little bit of apple money. couple of bucks surely go micron's direction.
- ErikVandeWater 9y ago
  I'm guessing they are also counting suppliers for their infrastructure. So they are counting it when they buy 2x4s for a corporate office from a US wood supplier.
  - matmann2001 9y ago
    Technically, the structural components for an Apple corporate office are likely to also come from Corning.
- milcron 9y ago
  They're building domestic datacenters, not iPhone factories.
- hugs 9y ago
  Sometimes, it might be robotics companies whose products Apple uses to test their devices. You can't really name them because maybe you're not the target market for those products.
bob_theslob646 9y ago
>Apple is already responsible for creating and supporting over 2 million jobs across the United States and expects to generate even more jobs as a result of the initiatives being announced today What percentage of jobs of these are full time versus part time? Why do large corporations and politicians love to toot their horns about 'jobs', but refuse to go into details? Oh wait, there public. >Employees:As of September 30, 2017 , the Company had approximately 123,000 full-time equivalent employees.(http://investor.apple.com/sec.cfm?DocType=Annual&ndq_keyword=#filings http://investor.apple.com/sec.cfm?DocType=Annual&ndq_keyword...) 123k divided by 2 million equals 6.15% of employees are full-time, whereas 93.85% are part-time.
- eppsilon 9y ago
  They're counting app developers, who may be working full-time for themselves or another employer.
- josinalvo 9y ago
  They are also probably considering a number of indirect jobs (say, waiter at a restaurant near their campus) so that 6% figure is incorrect
- kinkrtyavimoodh 9y ago
  toot
- missingcolours 9y ago
  Both your numerator and your divisor are incorrect. The 2 million number is "creating and supporting", i.e. not direct Apple employees. The 123k number is "full-time equivalent", i.e. "total number of hours worked by employees / 40", where 2 employees @ 20 hours/week = 40 hours = 1 full-time equivalent. So actual full-time employees might be a small portion of the 123k, due to the workforce ofApple retail stores, etc.
  - deleted 9y ago
    [deleted]
nikofeyn 9y ago
these corporations are just so full.of themselves. it's at least a little funny that this article gives me a steve holt vibe, being written in first person, but i feel apple has just created the headline and story they want the media to copy. i feel like apple would improve my life more (better phrased as stop impacting my life negatively) if they would spend as much time making their products work better instead of boning up on their marketing and propaganda and giving themselves a pat on the back.
- 111_1_111 9y ago
  What makes you think Apple spends more time on marketing than product development? Anybody could make their product better by diverting all their marketing budget into product development. It's not a particularly good business strategy, though.
downandout 9y ago
I find it fascinating that a tax plan proposed by a President reviled throughout the Valley is the one thing that finally convinced Apple to repatriate much of its overseas cash and invest it here in the US. They of course give no credit to him in this press release, but the proof is in the pudding. Of the many heavy handed ideas and efforts made by the previous administration to convince Apple to do this, exactly 0 of them worked. Only time will tell whether the recent reduction in corporate tax rates will have a long-term net positive effect, but this move by Apple alone seems like a good sign that it will. If other US corporations follow suit with repatriation, the American economy will experience unprecedented corporate reinvestment.
- eridius 9y ago
  Once corporations have exhausted their large hoard of overseas cash, the amount they repatriate will go down significantly. So isn't this really just a short-term boost?
  - rdtsc 9y ago
    The idea I think was to lower the corporate tax in general which will also give companies an incentive to stay and pay taxes here. Don't know how that will work long term. Maybe it will, until there would be another tax haven country advertising a better tax deal.
    - adventured 9y ago
      Fortunately it's more elaborate than that. Ideally the US begins stealing corporations and manufacturing from the rest of the world, whereas previously the flow had been going the other direction, with dozens of large companies abandoning the US for lower tax locations. For example, the lower corporate tax rate, combined with very inexpensive US energy (cheap natural gas), makes manufacturing in the US even more appealing. You don't have to beat all the other tax havens, you just have to get low enough to be competitive on the overall value proposition. The UK is at or going down to 17.5%, that 3.5% variance with the new US rate becomes mostly meaningless as an issue (17.5% vs 35% however is a drastic gap).
coolso 9y ago
So is this actually a bad thing, or are all of the skeptical/negative comments just due to the fact that it's yet another example of the new tax bill having immediate, positive, real effects on the US economy?
- dguaraglia 9y ago
  $1.5 trillion - $29bn... yeah, still not seeing the "positive effect" in the long term.
  - mabdre 9y ago
    150 - 2.9 is definitely a step forward...
    - dguaraglia 9y ago
      Except that it took 1 bill to create the 1.5 trillion in debt and decades to create the 29bn in profits. This kind of "big windfall" is only happening this tax cycle, and won't happen ever again. It's almost like people really focus on whatever positive input they get and cling to it no matter what.
nodesocket 9y ago
All the comments seem to be sketpical or negative. I think it's funny if you go back right before tax reform passed and look at all the comments on articles here on HN almost all were blasting tax reform. Saying it won't work, it does not help the economy, does not create jobs, and repatriation only leads to stock buybacks and executive bonuses. So far we've seen company after company giving substantial bonuses to all employees, announcing expansions, repatriating large amounts of capital from overseas back to America. Funny the nerative always seems to stay negative even though facts say otherwise.
- southphillyman 9y ago
  To be fair the bonuses I've heard about have been laughable so far and accompanied by large lay offs in two cases (Walmart and Comcast).
  - Clanan 9y ago
    $1,000 is not laughable to most people.
    - protomyth 9y ago
      3 car payments on 2 rent payments in a lot of the country. Its like the folks poo-pooing the Youtube folks earning a couple hundred off their channels. That little bit helps quite a lot.
    - pg314 9y ago
      If you're talking about Walmart, they announced a one-time bonus of up to $1,000. Walmart estimates that it will cost about $400 million [1], and they employ 2.3 million people [2], so the average bonus is under $200. Meanwhile Walmart will save about $1.8 billion a year in taxes, every year, thanks to the tax cut. [1] https://www.bloomberg.com/news/articles/2018-01-11/wal-mart-raises-u-s-hourly-wage-to-11-in-wake-of-tax-overhaul https://www.bloomberg.com/news/articles/2018-01-11/wal-mart-... [2] https://www.google.be/search?q=number+of+employees+walmart https://www.google.be/search?q=number+of+employees+walmart
joering2 9y ago
Lesson to self: build empire even if it means not paying taxes and hoarding money offshore. Wait until favorable political winds change that allow easy and cheap transfer from offshore. Come up as a winner to masses, because now I can hire more people. Rinse and repeat.
- propman 9y ago
  Global minimum tax. No more rinse and repeat thanks to the tax bill. 11% tax on all foreign profits so this eradicates tax havens in Ireland and the islands because if you are paying 2% then you pony up the other 9% to Uncle Sam. Last repatriation, the companies did exactly what you said but now that is no longer possible.
zghst 9y ago
Trump’s tax plan kicks ass.
lbrdn 9y ago
Of course lowering taxes would encourage companies to repatriate large overseas cash hoards, but if that's the only goal, why have a tax at all? As a country the US has obligations to its current citizens and its future citizens and those obligations cost money. If we overly celebrate these windfalls every time the tax rate is lowered, we might not realize that what we owe the citizen is being forgot and allowed to erode because the means to pay for it just aren't available.
- ixtli 9y ago
  This is exactly the thing that renders me speechless every time this comes up in casual conversation. People generally agree that apple and other tech companies hoarding money in Ireland to avoid tax is Bad™. Then, in the next breath, they say that removing the tax burden to get them to move that money back into a US bank is somehow Good™. But what does it matter if the government can't take a cut? Why do people who don't profit off of apple care which bank it's in?
  - jaredhansen 9y ago
    Nobody cares "which bank it's in" - but if a company has $1B in out-of-US cash not currently subject to US tax, and bringing it into the US will cost them 30% of it, they may (sensibly, in many cases) just elect to leave it sitting wherever it is. As to "what does it matter if the government can't take a cut?" --- the government does take a cut, and the reason it matters is that the lower rate will, on the margin, encourage cash repatriation. Remember too that firms know they will be taxed in the future at (unknown, but estimable) rates, and today's rate will be compared against firms' estimates of current rates. So in terms of the government's cut I forget the numbers in the current plan but say the corporate tax rate goes from 30% to 20%, and Apple decides that 20% is As Good As It's Likely To Get, and decides therefore to bring $1B of cash into the US that at a 30% rate it would have left elsewhere -- the US gov now gets 200M, rather than the 0 it would have gotten if the tax rate had stayed where it was.
  - danjayh 9y ago
    Also you seem to be under the incorrect assumption that capital will just sit in a warehouse as bricks of $100 bills collecting dust. Nothing could be further from the truth. In reality, one of a few things will happen: 1) Apple will spend it on capital investments (factories, campuses, data centers, etc.) in its business. Doesn't benefit the government, but benefits the country. 2) Apple will spend it on R&D / employees. Doesn't benefit the government directly, but benefits the country. 3) Apple will dump it into an American bank. That bank has a reserve ratio that is relatively low. It will lend several times the amount that Apple deposits to people or corporations who will do 1) or 2) 4) Apple will spend it on buybacks and dividends, which ultimately ends up in the hands of Apple's owners (you and me through our 401(k)'s, and probably a bunch of rich people as well), who will do 1), 2), or 3) So, whether or not the government gets a cut, it benefits everyone who actually lives here.
progressivebaka 9y ago
Please everyone who wants to pay more taxes you can gift it to the govt. Match me Bernie Bros!!!
rambleraptor 9y ago
I feel like this potentially buried the lede. Apple is planning on opening up a new campus in the USA. I feel like Amazon's HQ2 search is going to open the floodgates for tech companies asking for public incentives. Tech companies in the Bay Area have been creating tens of thousands of jobs for years without asking for much publicly. Expect that to change now.
- mnglkhn2 9y ago
  Or maybe it will open the floodgates for tech companies to escape high costs of SV/California/West Coast. It is a hedging against increasingly expensive work force.
  - larkost 9y ago
    According to the article the new campus would be for support. Most of that in the U.S. is currently part of the Apple Texas campus. So this would not really alter much in Silicon Valley.
    - rlanday 9y ago
      > The company plans to establish an Apple campus in a new location, which will initially house technical support for customers. Key word being "initially."
  - Mountain_Skies 9y ago
    It would do many tech companies some good to have a larger percentage of their workforce in states with cultural values different from that of the bay area. That would be valuable diversity that would help them better understand their customers.
- ericabiz 9y ago
  Strange that they would announce this now, after having already built a huge campus in Austin: http://fortune.com/2016/09/01/apple-austin-campus/ http://fortune.com/2016/09/01/apple-austin-campus/ Austin is where many of their support workers are now, as well as engineers. Apple's main Cupertino campus is 2.8 million sq.ft., but the Austin campus is also huge at 1.1 million sq.ft. for the main set of buildings and another 216K for a smaller campus in southwest Austin. So is this announcement for a third campus, or another expansion in Austin? I guess time--and incentives--will tell.
dmode 9y ago
Giant PR move. Amazon was already doing all of these and opening a new HQ without all this "tax" bill PR.
- yueq 9y ago
  but Trump is going after Bezos..?
cromwellian 9y ago
How realistic is it that a $5 billion fund can move a non-trivial amount of iPhone manufacturing to the US? Most of the BOM supply chain is in Asia, and assembly at FoxConn I heard amounts to 3% of the cost. It seems like Apple would have to build mostly automated assembly in the US or suffer severe margin reduction, and they'd suffer turnaround issues with the crucial components being still sourced in China. However, given the issue with iCloud, you can see that they've now realized they have to reduce the leverage China has over time, but $5 billion seems way too small to move an entire logistics manufacturing chain, they need a moonshot for this. Apple spends way too much on stock buybacks and dividends and not enough on reinvestment. Elsewhere in this thread, the pro-Trumpists don't seem to get why people were opposed to the tax plan: The fear many people have is that this repatriation will mostly go to stock buybacks, dividends, and executive compensation just like the last 3 times there was a repatriation event. The last repatriation event didn't make a dent in national income growth or GDP, it barely moved the needle. The Democrats wanted the funds to be spent on infrastructure, or education as an offset. The GOP decided to spend any increased revenue on lowering the estate tax and marginal tax rate cuts to avoid the cutoff for reconciliation. Since Democrats, backed by tech companies, had long supported repatriation. The GOP had a chance to pass a clean corporate tax bill that left everything else alone. Everyone knows the reductions for marginal rates at the high end and the estate tax changes aren't going to affect GDP much, and the net result of that was to impose double taxation on some states due to SALT deduction changes, and increase the deficit by $1.5 trillion. Apparently, double taxation is bad if it's the estate tax, but not if you're in California, New York, etc. A practical, clean, corporate tax reform bill would have been better, especially if it was synchronized with international partners to try and close loopholes. For this reason, although the tax plan had some good aspects to it, overall, it's a very bad bill and I doubt the positives to Apple are going to offset the negatives to the rest of the economy.
- spoiledtechie 9y ago
  If its stock buy backs, then why is Apple creating jobs and a new campus with the capital?
  - Scipio_Afri 9y ago
dang 9y ago
Url changed from https://www.apple.com/newsroom/2018/01/apple-accelerates-us-investment-and-job-creation/ https://www.apple.com/newsroom/2018/01/apple-accelerates-us-.... Some of the comments below make a bit more sense if you know they were replying to that one. This is a bit of an exception to the HN guidelines' call for original sources. We generally prefer a high quality third party report on news like this to the company's own press release. The latter tend to read like press releases.
- Jerry2 9y ago
  dang, why a double standard? If this was a story about Google, HN would have changed links to the official Google PR.
  - deleted 9y ago
    [deleted]
  - dang 9y ago
    Are there many, or even any, examples of that? If so I'd like to see one. Really, all we care about is having the best article on a topic, where by 'best' I mean something like 'most substantive, while remaining accessible to a general audience'. By that standard it seemed obvious that the Reuters url was better. Anti-Apple bias doesn't enter into it, and frankly the idea feels a little absurd to me.
    - Jerry2 9y ago
      dang, every time there's a story about Google, admins here link to official Google blogs. Every time it hits the front page. And if thee's a negative story about Google, it's quickly buried/flagged/disappeared.
      - dang 9y ago
        I'm sorry, but that's an absurd thing to claim. All I can really take from what you've said there is that you dislike Google. For any $bigco there are lots of HN users who strongly feel for or against it, and they all have competing beliefs about which $bigco is secretly favored or secretly suppressed here. People come up with highly charged claims about HN all the time and they're never true. They're in the eye of the beholder, reflecting how you feel, not how HN actually is, and driven by cognitive bias. I don't mean to criticize you personally—tons of HN readers do it, and I've written about the phenomenon a lot. https://hn.algolia.com/?sort=byDate&dateRange=all&type=comment&storyText=false&prefix=false&page=0&query=by:dang%20cognitive%20bias https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...
eclectic 9y ago
Apple to MAGA.
blinkingled 9y ago
I wonder if through it all Tim Cook has political ambitions.
SapphireSun 9y ago
This is a diversion tactic. They're grabbing 252.3B and spending less than a fifth of it. Let's imagine a different world. 200B, divided by 50k + 1.5x overhead (75k) could create about 2.6M decent jobs for one year (or 1.3M for two years etc). 2.6M jobs is equal to 0.8% of the total US population. The total labor force size is about 160M (~1/2 the total population) and the U6 measure of unemployment is about 8%. A healthy U6 is probably closer to 6% (from around 2000). That 2% of 160M is 3.2M jobs. Thus, in one fell swoop without even affecting operations overly much, Apple could reduce the magnitude of the economic crisis by a little over 2/3. These are astonishing numbers that would have real impacts on people's lives. Imagine what we could do with the profits of the other large conglomerates. Instead, they're spending a tiny amount on PR and reduced taxes that they lobbied heavily for to do what? Probably stock buy backs. The adulation of the rich and powerful continues at the expense of the working class. EDIT: added some comparison numbers EDIT: You guys are too much! So many questions, keep on asking, but I'll have to let others answer. I have other things to do today. Keep thinking critically about the political economy of the system. :)
- TearsInTheRain 9y ago
  What is their fair tax rate? How much do they owe the working class?
  - SapphireSun 9y ago
    All of their profits is what the socialist would respond. :) They produce nothing without the working class. Managers can earn a modest salary.
    - civilian 9y ago
      It's important to have incentives to reward success. How would a business even grow if it could never keep profits? The working class does benefit from Apple, in the form of high-quality technology that even they can purchase.
      - 9y ago
NelsonMinar 9y ago
Alternate headline: "Apple dodges $49B in taxes by waiting for a tax holiday". They reduced their rate on $250B of earnings from 35% to 15.5% by waiting for a new tax policy. https://arstechnica.com/tech-policy/2018/01/apple-plans-to-pay-38-billion-in-us-taxes-to-bring-overseas-cash-home/ https://arstechnica.com/tech-policy/2018/01/apple-plans-to-p...
- chrischen 9y ago
  Alternate headline: Trump policies enable Apple to re-invest in US jobs and economy.
  - jriot 9y ago
    A headline that will never see the light of day.
    - SapphireSun 9y ago
      Mainly because it's hard to suppress laughter if you think about it at all beyond a surface level. See discussion in another thread. I don't want to repeat myself.
      - WatermelonApe 9y ago
        Nobody cares enough about your "discussion" to CTRL F a rant that you're not even confident enough to link to. I doubt you can think about this topic beyond a surface level given that it's unlikely you understand tax code beyond a surface level. The net result is that Apple pledged to invest $350 billion in the US economy, capital expenditures that would have instead gone to their operations in China and Europe were it not for the long overdue change in US tax code as it relates to cross border taxation.
  - maximumkek 9y ago
    I think that headline would be classified as bigotted..?
  - 9y ago
bzadoroz 9y ago
Good but not nearly enough. I'm just glad they're paying something.
benjaminl 9y ago
This discussion is missing context. The whole reason that Apple has to pay taxes on foreign income is because unlike almost every other developed nation the US has a worldwide tax system. Almost every other nation has a territorial tax system. The rest of the world with their territorial system taxes income earned within that country, the US rather taxes income worldwide, regardless of where it is earned. For example, if a British company earns income in Germany, its pays German taxes on its German income. But if a US company earns income in Germany it pays both German taxes and US taxes. What is little known about this tax bill is that it normalizes our tax system with the rest of the world by moving to a territorial tax system. This is not about Apple avoiding tax on profit earned in the US, they will continue to pay US taxes, they won't pay taxes on income earned outside of the US going forward. [0] That means that there won't be any more hordes of overseas profits. And means the end of those tax inversions or corporate inversions you have been hearing about. [1] So now that foreign profits aren't going to be taxed, something needed to be done with all the profits generated under the old system. The 23% repatriation tax is a compromise between the new rate of effectively 0% and the old rate of 39%. This BTW happens to be very close to the OECD, the developed world's, average tax rate of 24%. Edit: As was astutely pointed out below the US only pays additional taxes to the US if their US tax bill was higher than their German one. And they paid the difference between to two to the US. [0] - https://news.ycombinator.com/item?id=11430290 https://news.ycombinator.com/item?id=11430290 [1] - https://news.ycombinator.com/item?id=11429859 https://news.ycombinator.com/item?id=11429859
- anilshanbhag 9y ago
  => But if a US company earns income in Germany it pays both German taxes and US taxes. This is not portrayed accurately. If you pay German taxes, you claim exception for that amount. So if you pay more taxes than the rate in US, you owe no tax for that income in US. If the rate is less in the country than in US, you pay the difference.
  - adw 9y ago
    If there's a double taxation treaty for corporate income in place. I have no idea, but it's somewhere in https://www.irs.gov/pub/irs-trty/germany.pdf https://www.irs.gov/pub/irs-trty/germany.pdf ...
aceon48 9y ago
I wonder how many of these type of headlines of companies investing in America, giving bonuses to workers, stock market and economy roaring, until it breaks the cognitive dissonance out of liberals.
cpollard0 9y ago
An important distinction re: territorial taxes is that if there is no settlement of the difference between a foreign tax rate and a home country tax rate then companies are incentivized to artificially earn as much of their income as possible in low tax jurisdictions.
deleted 9y ago
[deleted]
dingo_bat 9y ago
It's a nice feeling when your president and government actually work for you! Hats off to the American voter.
sparkling 9y ago
Thank you president Trump.
bcheung 9y ago
Did I miss something? I thought from the title of the article mentioning WHERE the campus would be built would be a fairly important detail to include.

369 points by chollida1 9y ago

Would like to see more investment in manufacturing here in the United States. Apple has to recognize that unstable relations between the United States, the EU, and China (along with South Korea and others)could leave them in a precarious position with their physical manufacturing capabilities. If China says, give us U.S. user data, or give us the capability to build your new 3D camera or we shut your facilities down, what will Apple do? Not to mention South Korea's antics with raiding Apple's South Korean offices and whatnot. The same goes for other US firms - EU you better watch out too.

samfisher83 9y ago
It would need a lot of investment. You need glass makers, metal shops, semiconductor shops all close together to emulate what is there in China right now. I don't know if its really possible in the US.
- adventured 9y ago
  It's possible. It's expensive to build out and would take a decade to do comprehensively. Apple can easily afford to do it (How badly do their shareholders want that? Not that badly I suspect). Most of the things in question have already previously been manufactured in the US at one point or another. The specialization / knowledge is already here. The base manufacturing capability, the buildings/plants, the inexpensive energy, the automation capabilities, the software, the access to cheap commodities, is already here. The US is the world's second largest manufacturer, by a very wide margin to the others down the list. Only China compares in scale globally. Call up Texas and Corning, make a deal backed with billions in investment, build the plants, and you'll be making as much glass in the US as you want within three or four years. http://variety.com/2017/digital/news/apple-corning-investment-1202424778/ http://variety.com/2017/digital/news/apple-corning-investmen...
- leggomylibro 9y ago
  You'd need a sort of 'motor city' for electronics. Something like what Detroit was for cars, or like what Shenzhen is now. I'm surprised that no stateside port cities have tried to encourage that sort of thing; there are plenty of negative externalities, but I would still LEAP to move to such an initiative. It's like...I want to create something that could make a difference for people, but all that I see in our current tech cities is faux do-goodiness, iniquity, and seething resentment. It's a bunch of people saying that they want to save the world while reaching into the pockets of people who can't afford it, and it hurts to be unfailingly lumped into that sort of behavior.

draw_down 9y ago

All hail the job creators.

mudil 9y ago

"Apple Plans to Pay $38 Billion in Repatriation Taxes. " Imagine headline like this under Obama, how much praise he would get.

matthewmcg 9y ago
You could also write the headline as "Most Profitable Company on Earth To Receive $42B Repatriation Tax Break"
- coolso 9y ago
  By the same token you could also rewrite a lot of comments in this thread, possibly including yours, as "Trump's Tax Bill Is Having Positive Effects Despite The Narrative And I Don't Like That".
- adventured 9y ago
  That money was never coming back otherwise. So no, you couldn't reasonably write that. You'd have to enter an alternate reality where US corporations like Apple voluntarily paid the backwards, high US global profit tax.
  - ejstronge 9y ago
    This doesn't quite make sense - the decision/cost to bring the money 'into the US' depends on a variety of factors. I am not a domain expert, but the availability of cheap credit must have been a principal consideration, as well as the knowledge that a potential Republican president would offer an effective repatriation holiday. In short, there are many conceivable situations in which it might make sense to pay such a tax - we're just not in one of those at the moment. I won't address your last assertion, not having data, but I've read in many publications that the effective corporate tax rates in the US are far lower than rates in other countries.
    - adventured 9y ago
      > the decision/cost to bring the money 'into the US' depends on a variety of factors No it doesn't. Apple has been lobbying aggressively for years, including during most of the Obama Administration, to change the backwards US global tax policy (the US being one of the few countries to utilize such an approach) and or to arrange a one-time repatriation holiday. They finally got what they wanted and they're repatriating the money immediately thereafter. It depended on one thing: getting a low enough rate to make bringing the cash home modestly punishing. Apple was always clear about that, Tim Cook spelled it out in numerous interviews over several years.

krebby 9y ago

I love it. Apple gets to avoid paying taxes for years through accounting slight of hand, and then when they finally pay for part of what they owe they want a pat on the back for doing so. Corporations, man.

IBM 9y ago
The taxes are only one part of this announcement. >Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one. All of this is discretionary spending.
crusso 9y ago
they finally pay for part of what they owe You only owe the taxes that the law compels you to pay. There's no obligation whatsoever to pay a dime more. Do you personally look to pay the maximum amount of taxes that you could possibly justify through various readings of the tax code? Because I guarantee that your tax software or your tax accountant are not "taking advantage" of opportunities for you to pay more unless you look to.
- krebby 9y ago
  No but I also don't set up a pretend subsidiary in Ireland that owns my intellectual property and pays me dividends for my freelance work. To pretend that they didn't go above and beyond to avoid paying taxes is lunacy.
  - deleted 9y ago
    [deleted]
  - sigstoat 9y ago
    > No but I also don't set up a pretend subsidiary... do you pay your state government the sales tax you owe it for all of your online purchases?
    - 9y ago

samfisher83 9y ago

If you read through the articles numbers don't seem to add up to 350B: The Tax repatriations count for 38 bil. The new capital is 30 billion. Supposed the 20000 people are all making a 200000 dollars/ years thats 20 biliion. Where does the other 250 billion come from?

IBM 9y ago
It comes from how much they spend with US suppliers. They're basically highlighting what their economic impact is to the US.
adventured 9y ago
From the link: "Apple will spend an estimated $55 billion with US suppliers and manufacturers in 2018"
- samfisher83 9y ago
  How much of that is made here? If you look at their ICs even if its an American company most of their chips are made in Taiwan. For example apple might design CPU here, but its made in Hsinchu.
  - adventured 9y ago
    Very likely an impossible number to unravel (without Apple providing the detail). Their cost of revenue for 2017 was $144b out of $229b in sales. How much room is in there for $50b in the US and all manufacturing overseas? It would seem theoretically possible to fit all of that in. Here's their supplier list: https://images.apple.com/supplier-responsibility/pdf/Apple-Supplier-List.pdf https://images.apple.com/supplier-responsibility/pdf/Apple-S... 3M for example has six US location references. Broadcom has two US locations. Corning has one. Flextronics has one US location. Intel has three US locations. Samsung has one US location listed. Texas Instruments has several. And so on; about 40 locations in all. Does it add up to $50 billion in real US manufacturing and supplier activity? Who knows.
    - 9y ago

maxxxxx 9y ago

I hate the phrase "job creation". It sounds almost like the "job creators" are of divine nature. How about "hiring"?

jdoliner 9y ago
Job creation and hiring mean different things. I can hire someone for a job that already existed and was previously filled by someone else. If I bring a new job into existence, that hasn't been filled by anyone before then saying I created that job doesn't seem particularly untoward.
- maxxxxx 9y ago
  I anybody creates jobs it's the people who buy stuff and create demand. Then someone will meet that demand and potentially hire someone. I don't think Apple "creates" jobs. It hires people for certain needs that have been created by the market. If they don't fill the need somebody else will do in a market economy.
  - jerkstate 9y ago
    I disagree, I would suspect that most Apple employees are probably engaged in creating new products that have not been bought yet..
    - jasonlotito 9y ago
      Ignoring Apple retail employees, that might be true if you assume that the new products are running a version of either iOS or macOS and that those people working on that are considered part of creating that product.
  - rdtsc 9y ago
    > I don't think Apple "creates" jobs. Can nitpick it for sure. It has billions of dollars sitting around, it can choose to open a new data center, new manufacturing plant, start a cloud offering, Uber-for-dogs, whatever. Or it can continue sitting on that money. It's not automatic. That's what people mean by "job creation". Choosing to invest the money usually involves creating new positions. Another way to look at it, is that it is location dependent. Since it is an American company, it might "hire" for a position that used to be filled in China, but the new hire is US. On the global market it "hired" someone in the US market it "created" a job.

tooltalk 9y ago

I'd like to know who those 9,000 American suppliers and manufacturers are. Other than Corning who supplies the Gorilla Glasses for almost all smartphone makers, I can't really name any significant domestic suppliers who would make up $55B of their "spending."

zjaffee 9y ago
Apple wants to create competition for the components they need to drive down prices throughout the supply chain. Most of their investments relate to this from camera tech to oled screens.
dx034 9y ago
A supplier is also the company delivering fruit for offices or cleaning utensils.
sigstoat 9y ago
i expect intel gets a little bit of apple money. couple of bucks surely go micron's direction.
ErikVandeWater 9y ago
I'm guessing they are also counting suppliers for their infrastructure. So they are counting it when they buy 2x4s for a corporate office from a US wood supplier.
- matmann2001 9y ago
  Technically, the structural components for an Apple corporate office are likely to also come from Corning.
milcron 9y ago
They're building domestic datacenters, not iPhone factories.
hugs 9y ago
Sometimes, it might be robotics companies whose products Apple uses to test their devices. You can't really name them because maybe you're not the target market for those products.

bob_theslob646 9y ago

>Apple is already responsible for creating and supporting over 2 million jobs across the United States and expects to generate even more jobs as a result of the initiatives being announced today What percentage of jobs of these are full time versus part time? Why do large corporations and politicians love to toot their horns about 'jobs', but refuse to go into details? Oh wait, there public. >Employees:As of September 30, 2017 , the Company had approximately 123,000 full-time equivalent employees.(http://investor.apple.com/sec.cfm?DocType=Annual&ndq_keyword=#filings http://investor.apple.com/sec.cfm?DocType=Annual&ndq_keyword...) 123k divided by 2 million equals 6.15% of employees are full-time, whereas 93.85% are part-time.

eppsilon 9y ago
They're counting app developers, who may be working full-time for themselves or another employer.
josinalvo 9y ago
They are also probably considering a number of indirect jobs (say, waiter at a restaurant near their campus) so that 6% figure is incorrect
kinkrtyavimoodh 9y ago
toot
missingcolours 9y ago
Both your numerator and your divisor are incorrect. The 2 million number is "creating and supporting", i.e. not direct Apple employees. The 123k number is "full-time equivalent", i.e. "total number of hours worked by employees / 40", where 2 employees @ 20 hours/week = 40 hours = 1 full-time equivalent. So actual full-time employees might be a small portion of the 123k, due to the workforce ofApple retail stores, etc.
- deleted 9y ago
  [deleted]

nikofeyn 9y ago

these corporations are just so full.of themselves. it's at least a little funny that this article gives me a steve holt vibe, being written in first person, but i feel apple has just created the headline and story they want the media to copy. i feel like apple would improve my life more (better phrased as stop impacting my life negatively) if they would spend as much time making their products work better instead of boning up on their marketing and propaganda and giving themselves a pat on the back.

111_1_111 9y ago
What makes you think Apple spends more time on marketing than product development? Anybody could make their product better by diverting all their marketing budget into product development. It's not a particularly good business strategy, though.

downandout 9y ago

I find it fascinating that a tax plan proposed by a President reviled throughout the Valley is the one thing that finally convinced Apple to repatriate much of its overseas cash and invest it here in the US. They of course give no credit to him in this press release, but the proof is in the pudding. Of the many heavy handed ideas and efforts made by the previous administration to convince Apple to do this, exactly 0 of them worked. Only time will tell whether the recent reduction in corporate tax rates will have a long-term net positive effect, but this move by Apple alone seems like a good sign that it will. If other US corporations follow suit with repatriation, the American economy will experience unprecedented corporate reinvestment.

eridius 9y ago
Once corporations have exhausted their large hoard of overseas cash, the amount they repatriate will go down significantly. So isn't this really just a short-term boost?
- rdtsc 9y ago
  The idea I think was to lower the corporate tax in general which will also give companies an incentive to stay and pay taxes here. Don't know how that will work long term. Maybe it will, until there would be another tax haven country advertising a better tax deal.
  - adventured 9y ago
    Fortunately it's more elaborate than that. Ideally the US begins stealing corporations and manufacturing from the rest of the world, whereas previously the flow had been going the other direction, with dozens of large companies abandoning the US for lower tax locations. For example, the lower corporate tax rate, combined with very inexpensive US energy (cheap natural gas), makes manufacturing in the US even more appealing. You don't have to beat all the other tax havens, you just have to get low enough to be competitive on the overall value proposition. The UK is at or going down to 17.5%, that 3.5% variance with the new US rate becomes mostly meaningless as an issue (17.5% vs 35% however is a drastic gap).

coolso 9y ago

So is this actually a bad thing, or are all of the skeptical/negative comments just due to the fact that it's yet another example of the new tax bill having immediate, positive, real effects on the US economy?

dguaraglia 9y ago
$1.5 trillion - $29bn... yeah, still not seeing the "positive effect" in the long term.
- mabdre 9y ago
  150 - 2.9 is definitely a step forward...
  - dguaraglia 9y ago
    Except that it took 1 bill to create the 1.5 trillion in debt and decades to create the 29bn in profits. This kind of "big windfall" is only happening this tax cycle, and won't happen ever again. It's almost like people really focus on whatever positive input they get and cling to it no matter what.

nodesocket 9y ago

All the comments seem to be sketpical or negative. I think it's funny if you go back right before tax reform passed and look at all the comments on articles here on HN almost all were blasting tax reform. Saying it won't work, it does not help the economy, does not create jobs, and repatriation only leads to stock buybacks and executive bonuses. So far we've seen company after company giving substantial bonuses to all employees, announcing expansions, repatriating large amounts of capital from overseas back to America. Funny the nerative always seems to stay negative even though facts say otherwise.

southphillyman 9y ago
To be fair the bonuses I've heard about have been laughable so far and accompanied by large lay offs in two cases (Walmart and Comcast).
- Clanan 9y ago
  $1,000 is not laughable to most people.
  - protomyth 9y ago
    3 car payments on 2 rent payments in a lot of the country. Its like the folks poo-pooing the Youtube folks earning a couple hundred off their channels. That little bit helps quite a lot.
  - pg314 9y ago
    If you're talking about Walmart, they announced a one-time bonus of up to $1,000. Walmart estimates that it will cost about $400 million [1], and they employ 2.3 million people [2], so the average bonus is under $200. Meanwhile Walmart will save about $1.8 billion a year in taxes, every year, thanks to the tax cut. [1] https://www.bloomberg.com/news/articles/2018-01-11/wal-mart-raises-u-s-hourly-wage-to-11-in-wake-of-tax-overhaul https://www.bloomberg.com/news/articles/2018-01-11/wal-mart-... [2] https://www.google.be/search?q=number+of+employees+walmart https://www.google.be/search?q=number+of+employees+walmart

joering2 9y ago

Lesson to self: build empire even if it means not paying taxes and hoarding money offshore. Wait until favorable political winds change that allow easy and cheap transfer from offshore. Come up as a winner to masses, because now I can hire more people. Rinse and repeat.

propman 9y ago
Global minimum tax. No more rinse and repeat thanks to the tax bill. 11% tax on all foreign profits so this eradicates tax havens in Ireland and the islands because if you are paying 2% then you pony up the other 9% to Uncle Sam. Last repatriation, the companies did exactly what you said but now that is no longer possible.

zghst 9y ago

Trump’s tax plan kicks ass.

lbrdn 9y ago

Of course lowering taxes would encourage companies to repatriate large overseas cash hoards, but if that's the only goal, why have a tax at all? As a country the US has obligations to its current citizens and its future citizens and those obligations cost money. If we overly celebrate these windfalls every time the tax rate is lowered, we might not realize that what we owe the citizen is being forgot and allowed to erode because the means to pay for it just aren't available.

ixtli 9y ago
This is exactly the thing that renders me speechless every time this comes up in casual conversation. People generally agree that apple and other tech companies hoarding money in Ireland to avoid tax is Bad™. Then, in the next breath, they say that removing the tax burden to get them to move that money back into a US bank is somehow Good™. But what does it matter if the government can't take a cut? Why do people who don't profit off of apple care which bank it's in?
- jaredhansen 9y ago
  Nobody cares "which bank it's in" - but if a company has $1B in out-of-US cash not currently subject to US tax, and bringing it into the US will cost them 30% of it, they may (sensibly, in many cases) just elect to leave it sitting wherever it is. As to "what does it matter if the government can't take a cut?" --- the government does take a cut, and the reason it matters is that the lower rate will, on the margin, encourage cash repatriation. Remember too that firms know they will be taxed in the future at (unknown, but estimable) rates, and today's rate will be compared against firms' estimates of current rates. So in terms of the government's cut I forget the numbers in the current plan but say the corporate tax rate goes from 30% to 20%, and Apple decides that 20% is As Good As It's Likely To Get, and decides therefore to bring $1B of cash into the US that at a 30% rate it would have left elsewhere -- the US gov now gets 200M, rather than the 0 it would have gotten if the tax rate had stayed where it was.
- danjayh 9y ago
  Also you seem to be under the incorrect assumption that capital will just sit in a warehouse as bricks of $100 bills collecting dust. Nothing could be further from the truth. In reality, one of a few things will happen: 1) Apple will spend it on capital investments (factories, campuses, data centers, etc.) in its business. Doesn't benefit the government, but benefits the country. 2) Apple will spend it on R&D / employees. Doesn't benefit the government directly, but benefits the country. 3) Apple will dump it into an American bank. That bank has a reserve ratio that is relatively low. It will lend several times the amount that Apple deposits to people or corporations who will do 1) or 2) 4) Apple will spend it on buybacks and dividends, which ultimately ends up in the hands of Apple's owners (you and me through our 401(k)'s, and probably a bunch of rich people as well), who will do 1), 2), or 3) So, whether or not the government gets a cut, it benefits everyone who actually lives here.

progressivebaka 9y ago

Please everyone who wants to pay more taxes you can gift it to the govt. Match me Bernie Bros!!!

rambleraptor 9y ago

I feel like this potentially buried the lede. Apple is planning on opening up a new campus in the USA. I feel like Amazon's HQ2 search is going to open the floodgates for tech companies asking for public incentives. Tech companies in the Bay Area have been creating tens of thousands of jobs for years without asking for much publicly. Expect that to change now.

mnglkhn2 9y ago
Or maybe it will open the floodgates for tech companies to escape high costs of SV/California/West Coast. It is a hedging against increasingly expensive work force.
- larkost 9y ago
  According to the article the new campus would be for support. Most of that in the U.S. is currently part of the Apple Texas campus. So this would not really alter much in Silicon Valley.
  - rlanday 9y ago
    > The company plans to establish an Apple campus in a new location, which will initially house technical support for customers. Key word being "initially."
- Mountain_Skies 9y ago
  It would do many tech companies some good to have a larger percentage of their workforce in states with cultural values different from that of the bay area. That would be valuable diversity that would help them better understand their customers.
ericabiz 9y ago
Strange that they would announce this now, after having already built a huge campus in Austin: http://fortune.com/2016/09/01/apple-austin-campus/ http://fortune.com/2016/09/01/apple-austin-campus/ Austin is where many of their support workers are now, as well as engineers. Apple's main Cupertino campus is 2.8 million sq.ft., but the Austin campus is also huge at 1.1 million sq.ft. for the main set of buildings and another 216K for a smaller campus in southwest Austin. So is this announcement for a third campus, or another expansion in Austin? I guess time--and incentives--will tell.

dmode 9y ago

Giant PR move. Amazon was already doing all of these and opening a new HQ without all this "tax" bill PR.

yueq 9y ago
but Trump is going after Bezos..?

cromwellian 9y ago

How realistic is it that a $5 billion fund can move a non-trivial amount of iPhone manufacturing to the US? Most of the BOM supply chain is in Asia, and assembly at FoxConn I heard amounts to 3% of the cost. It seems like Apple would have to build mostly automated assembly in the US or suffer severe margin reduction, and they'd suffer turnaround issues with the crucial components being still sourced in China. However, given the issue with iCloud, you can see that they've now realized they have to reduce the leverage China has over time, but $5 billion seems way too small to move an entire logistics manufacturing chain, they need a moonshot for this. Apple spends way too much on stock buybacks and dividends and not enough on reinvestment. Elsewhere in this thread, the pro-Trumpists don't seem to get why people were opposed to the tax plan: The fear many people have is that this repatriation will mostly go to stock buybacks, dividends, and executive compensation just like the last 3 times there was a repatriation event. The last repatriation event didn't make a dent in national income growth or GDP, it barely moved the needle. The Democrats wanted the funds to be spent on infrastructure, or education as an offset. The GOP decided to spend any increased revenue on lowering the estate tax and marginal tax rate cuts to avoid the cutoff for reconciliation. Since Democrats, backed by tech companies, had long supported repatriation. The GOP had a chance to pass a clean corporate tax bill that left everything else alone. Everyone knows the reductions for marginal rates at the high end and the estate tax changes aren't going to affect GDP much, and the net result of that was to impose double taxation on some states due to SALT deduction changes, and increase the deficit by $1.5 trillion. Apparently, double taxation is bad if it's the estate tax, but not if you're in California, New York, etc. A practical, clean, corporate tax reform bill would have been better, especially if it was synchronized with international partners to try and close loopholes. For this reason, although the tax plan had some good aspects to it, overall, it's a very bad bill and I doubt the positives to Apple are going to offset the negatives to the rest of the economy.

spoiledtechie 9y ago
If its stock buy backs, then why is Apple creating jobs and a new campus with the capital?
- Scipio_Afri 9y ago

dang 9y ago

Url changed from https://www.apple.com/newsroom/2018/01/apple-accelerates-us-investment-and-job-creation/ https://www.apple.com/newsroom/2018/01/apple-accelerates-us-.... Some of the comments below make a bit more sense if you know they were replying to that one. This is a bit of an exception to the HN guidelines' call for original sources. We generally prefer a high quality third party report on news like this to the company's own press release. The latter tend to read like press releases.

Jerry2 9y ago
dang, why a double standard? If this was a story about Google, HN would have changed links to the official Google PR.
- deleted 9y ago
  [deleted]
- dang 9y ago
  Are there many, or even any, examples of that? If so I'd like to see one. Really, all we care about is having the best article on a topic, where by 'best' I mean something like 'most substantive, while remaining accessible to a general audience'. By that standard it seemed obvious that the Reuters url was better. Anti-Apple bias doesn't enter into it, and frankly the idea feels a little absurd to me.
  - Jerry2 9y ago
    dang, every time there's a story about Google, admins here link to official Google blogs. Every time it hits the front page. And if thee's a negative story about Google, it's quickly buried/flagged/disappeared.
    - dang 9y ago
      I'm sorry, but that's an absurd thing to claim. All I can really take from what you've said there is that you dislike Google. For any $bigco there are lots of HN users who strongly feel for or against it, and they all have competing beliefs about which $bigco is secretly favored or secretly suppressed here. People come up with highly charged claims about HN all the time and they're never true. They're in the eye of the beholder, reflecting how you feel, not how HN actually is, and driven by cognitive bias. I don't mean to criticize you personally—tons of HN readers do it, and I've written about the phenomenon a lot. https://hn.algolia.com/?sort=byDate&dateRange=all&type=comment&storyText=false&prefix=false&page=0&query=by:dang%20cognitive%20bias https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...

eclectic 9y ago

Apple to MAGA.

blinkingled 9y ago

I wonder if through it all Tim Cook has political ambitions.

SapphireSun 9y ago

This is a diversion tactic. They're grabbing 252.3B and spending less than a fifth of it. Let's imagine a different world. 200B, divided by 50k + 1.5x overhead (75k) could create about 2.6M decent jobs for one year (or 1.3M for two years etc). 2.6M jobs is equal to 0.8% of the total US population. The total labor force size is about 160M (~1/2 the total population) and the U6 measure of unemployment is about 8%. A healthy U6 is probably closer to 6% (from around 2000). That 2% of 160M is 3.2M jobs. Thus, in one fell swoop without even affecting operations overly much, Apple could reduce the magnitude of the economic crisis by a little over 2/3. These are astonishing numbers that would have real impacts on people's lives. Imagine what we could do with the profits of the other large conglomerates. Instead, they're spending a tiny amount on PR and reduced taxes that they lobbied heavily for to do what? Probably stock buy backs. The adulation of the rich and powerful continues at the expense of the working class. EDIT: added some comparison numbers EDIT: You guys are too much! So many questions, keep on asking, but I'll have to let others answer. I have other things to do today. Keep thinking critically about the political economy of the system. :)

TearsInTheRain 9y ago
What is their fair tax rate? How much do they owe the working class?
- SapphireSun 9y ago
  All of their profits is what the socialist would respond. :) They produce nothing without the working class. Managers can earn a modest salary.
  - civilian 9y ago
    It's important to have incentives to reward success. How would a business even grow if it could never keep profits? The working class does benefit from Apple, in the form of high-quality technology that even they can purchase.
    - 9y ago

NelsonMinar 9y ago

Alternate headline: "Apple dodges $49B in taxes by waiting for a tax holiday". They reduced their rate on $250B of earnings from 35% to 15.5% by waiting for a new tax policy. https://arstechnica.com/tech-policy/2018/01/apple-plans-to-pay-38-billion-in-us-taxes-to-bring-overseas-cash-home/ https://arstechnica.com/tech-policy/2018/01/apple-plans-to-p...

chrischen 9y ago
Alternate headline: Trump policies enable Apple to re-invest in US jobs and economy.
- jriot 9y ago
  A headline that will never see the light of day.
  - SapphireSun 9y ago
    Mainly because it's hard to suppress laughter if you think about it at all beyond a surface level. See discussion in another thread. I don't want to repeat myself.
    - WatermelonApe 9y ago
      Nobody cares enough about your "discussion" to CTRL F a rant that you're not even confident enough to link to. I doubt you can think about this topic beyond a surface level given that it's unlikely you understand tax code beyond a surface level. The net result is that Apple pledged to invest $350 billion in the US economy, capital expenditures that would have instead gone to their operations in China and Europe were it not for the long overdue change in US tax code as it relates to cross border taxation.
- maximumkek 9y ago
  I think that headline would be classified as bigotted..?
- 9y ago

bzadoroz 9y ago

Good but not nearly enough. I'm just glad they're paying something.

benjaminl 9y ago

This discussion is missing context. The whole reason that Apple has to pay taxes on foreign income is because unlike almost every other developed nation the US has a worldwide tax system. Almost every other nation has a territorial tax system. The rest of the world with their territorial system taxes income earned within that country, the US rather taxes income worldwide, regardless of where it is earned. For example, if a British company earns income in Germany, its pays German taxes on its German income. But if a US company earns income in Germany it pays both German taxes and US taxes. What is little known about this tax bill is that it normalizes our tax system with the rest of the world by moving to a territorial tax system. This is not about Apple avoiding tax on profit earned in the US, they will continue to pay US taxes, they won't pay taxes on income earned outside of the US going forward. [0] That means that there won't be any more hordes of overseas profits. And means the end of those tax inversions or corporate inversions you have been hearing about. [1] So now that foreign profits aren't going to be taxed, something needed to be done with all the profits generated under the old system. The 23% repatriation tax is a compromise between the new rate of effectively 0% and the old rate of 39%. This BTW happens to be very close to the OECD, the developed world's, average tax rate of 24%. Edit: As was astutely pointed out below the US only pays additional taxes to the US if their US tax bill was higher than their German one. And they paid the difference between to two to the US. [0] - https://news.ycombinator.com/item?id=11430290 https://news.ycombinator.com/item?id=11430290 [1] - https://news.ycombinator.com/item?id=11429859 https://news.ycombinator.com/item?id=11429859

anilshanbhag 9y ago
=> But if a US company earns income in Germany it pays both German taxes and US taxes. This is not portrayed accurately. If you pay German taxes, you claim exception for that amount. So if you pay more taxes than the rate in US, you owe no tax for that income in US. If the rate is less in the country than in US, you pay the difference.
- adw 9y ago
  If there's a double taxation treaty for corporate income in place. I have no idea, but it's somewhere in https://www.irs.gov/pub/irs-trty/germany.pdf https://www.irs.gov/pub/irs-trty/germany.pdf ...

aceon48 9y ago

I wonder how many of these type of headlines of companies investing in America, giving bonuses to workers, stock market and economy roaring, until it breaks the cognitive dissonance out of liberals.

cpollard0 9y ago

An important distinction re: territorial taxes is that if there is no settlement of the difference between a foreign tax rate and a home country tax rate then companies are incentivized to artificially earn as much of their income as possible in low tax jurisdictions.

deleted 9y ago

[deleted]

dingo_bat 9y ago

It's a nice feeling when your president and government actually work for you! Hats off to the American voter.

sparkling 9y ago

Thank you president Trump.

bcheung 9y ago

Did I miss something? I thought from the title of the article mentioning WHERE the campus would be built would be a fairly important detail to include.