6 ms·

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

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).
- gramstrong 9y ago
  A short term domestic investment for a long-term tax benefit. The headlines made immediately after the new legislation is passed are what will stick with people the most. I'm not saying this is definitely the case, and I would love to be proven wrong. I just don't see how a tax cut would have corporations scrambling to return jobs to the U.S., instead of having both a tax cut AND cheap foreign labor.
- downandout 9y ago
  No. These types of investments don’t simply wash away - they go to building long term value for the corporations that make them, which creates good jobs, demand for housing, etc. Further, as long as this tax plan remains in place, corporations will continue to allow international profits to flow back into the US. Even if Trump is unseated in the next election, given the positive reaction among corporations to his tax plan, it may be politically impossible for the next Administration to return to punitive tax rates despite their predilection for them.
- j4ship 9y ago
  you are asking that question , but the answer is "who knows" ... your reasoning is apt , but its not a prediction of the future.
- seanmcdirmid 9y ago
  The USA has moved to a territorial tax system for corporations, so any income earned abroad will no longer be subject to US tax (only taxed by the country where the income was generated), and so can be freely moved back to the USA if the companies wish. There is no longer a distinction to be made concerning where money can be spent without being US taxed.
  - vasilipupkin 9y ago
    There was little distinction before as companies could borrow against their overseas cash to invest in the US
    - seanmcdirmid 9y ago
      They would still have to pay those loans back out of their US income (or any income repatriated). Bankruptcy would be weird, in that case.
gjacolby83 9y ago
Apple is a one of a kind company. In my opinion, I don't think most US Corporations are concerned with the needs of the many.
- icebraining 9y ago
  And you think Apple is? Why?
- akvadrako 9y ago
  Apple is a significant percentage of the economy all by itself.
  - module0000 9y ago
    What do you think a "significant percentage" is? Is it 10%? 1%? 0.005%?
    - saagarjha 9y ago
      I wouldn't call it a "significant percentage", but by a straightforward calculation of revenue/GDP shows that it's about 1% of the US's economy.
IBM 9y ago
Nobody had to convince Apple or any other company to do anything. The repatriation is deemed, i.e no company has a choice in it. And while you may believe it was "proposed" by Trump, it has actually been in the works for years by both parties in Congress and by Obama [1]. They could just never pass a bill (because what else did you expect with Obama in the WH and Republicans in control of Congress) because Democrats wanted to spend it on infrastructure, and Republicans wanted to cut taxes for corporations, which is what they ended up doing. The repatriation of Apple's overseas cash would have happened regardless of who became President. [1] https://www.reuters.com/article/us-usa-budget-tax/obama-targets-foreign-profits-with-tax-proposal-republicans-skeptical-idUSKBN0L51IX20150201 https://www.reuters.com/article/us-usa-budget-tax/obama-targ...
- j4ship 9y ago
  you couldnt pass this bill becuase liberals didnt want it , because liberals dont want to see this kind of legislation. You have it now becuase liberals have less stopping power.
- downandout 9y ago
  >The repatriation is deemed, i.e no company has a choice in it. Incorrect. There is a repatriation tax holiday that enables them to pay lower rates than normal on repatriated cash. It is designed to encourage repatriation. They are not required to do so.
  - IBM 9y ago
    >Incorrect. There is a repatriation tax holiday designed to encourage repatriation. They are not required to do so. Unfortunately, you're incorrect. https://www.pwc.com/us/en/tax-services/publications/insights/tax-reform-readiness-us-mandatory-deemed-repatriation-issues.html https://www.pwc.com/us/en/tax-services/publications/insights...
    - hateduser2 9y ago
      No u
magicalist 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. Why is that fascinating? It's the tax holiday the tech megacorps have been asking for since the last one in 2004.
- downandout 9y ago
  And yet nobody gave it to them until now, which resulted in trillions of dollars that should have been benefitting the US economy sitting unused in places like Ireland.
  - magicalist 9y ago
    Let's say I thought I was paying too much in taxes, and now I'll pay less in taxes next year due to this tax cut. No one gave me that tax cut until now! Nothing about that is "fascinating". You're trying to make a narrative out of "hey, we want this." "OK, here it is." You'd have more of a point if you were trying to say that all the doomsayers were wrong about the downsides of a tax holiday and here's the proof, but it's a bit early for that.
  - jonknee 9y ago
    You do know that the money isn't literally sitting overseas right? It is invested (Apple would be the largest bond fund in the world [1] if they accepted outside money). So they'll sell the investments, pay a little tax and then probably do a massive buy back of their shares and a special dividend. A little switching around on paper, but certainly not a stimulus of any sort. [1] https://www.bloomberg.com/news/articles/2017-05-04/apple-buys-more-company-debt-than-the-world-s-biggest-bond-funds https://www.bloomberg.com/news/articles/2017-05-04/apple-buy...
    - WalterBright 9y ago
      Of course there is no Apple cash hoard, it's all invested. The difference is it being invested in foreign countries, or invested in America.
eqmvii 9y ago
> a tax plan proposed by a President The corporate tax changes weren't his idea - they have been kicking around Capitol Hill with more or less bipartisan support for years, and it almost happened while Obama was president. The full package of changes wound up being highly politicized and controversial, but the corporate changes were always seen as very likely to pass sooner or later.
- notyourday 9y ago
  They may have been kicked around the Capitol Hill for years but while (D)s had control of the presidency it did not happen. There was a time when (D)s had control of Congress, Senate and Presidency with Obama as a President and it did not happen. To claim this tax cut is a result of bipartisan legislation is rather odd. [Edit] It must be really painful to downvote reality.
  - pageandrew 9y ago
    They only claim bipartisan responsibility when the tax plan seems to do good for the country (billions of dollars in new investments, tax revenue, repatriation etc.)
- zghst 9y ago
  He was pretty much the only finalist candidate that proposed cutting taxes, and not just by a bit, Trump by his nature wanted the greatest change
  - threeseed 9y ago
    This is factually baseless nonsense. Jeb Bush: https://taxfoundation.org/details-and-analysis-governor-jeb-bush-s-tax-plan/ https://taxfoundation.org/details-and-analysis-governor-jeb-... Marco Rubio: https://taxfoundation.org/presidential-hopeful-marco-rubio-already-has-tax-plan/ https://taxfoundation.org/presidential-hopeful-marco-rubio-a... You can compare all candidate plans here: https://taxfoundation.org/comparing-2016-presidential-tax-reform-proposals/ https://taxfoundation.org/comparing-2016-presidential-tax-re... In fact it was Ben Carson who proposed cutting the tax rates the most (corporate tax rate -> 14.9%).
untog 9y ago
> the one thing that finally convinced Apple to repatriate much of its overseas cash and invest it here in the US That doesn't really seem too surprising. The previous administration tried to force them to do it, they refused. The current administration gave them what they wanted, they did it. > If other US corporations follow suit with repatriation, the American economy will experience unprecedented corporate reinvestment. Yes, but "corporate reinvestment" can mean a great many things. Endless rounds of share buybacks (as many CEOs have indicated they want to do) won't really benefit the broader economy (or actual citizens) all that much.
- seanmcdirmid 9y ago
  The repatriation isn’t optional, so you could say the current administration succeeded in forcing them to do it.
khana 9y ago
Truly yes. Personally, I am happy to hear this encouraging news. USA.
arrrg 9y ago
This might be the most brilliant tax plan in the universe. The president wouldn’t be any less revolting because of that. I’m not sure why you are connecting these two ideas. It is true that the partisan extremism of everything leads to people irrationally hating everything someone does (or, as in this case, is loosely associated with), but that doesn’t mean the opposite. This does not and should not wash this revolting presidency clean.
- zghst 9y ago
  Amen!
- ogre_magi 9y ago
  You are very virtuous and your political opponents are very gross.
  - archagon 9y ago
    Yep, everything is Totally Normal™ in American politics!
  - prklmn 9y ago
    I heard Stalin was good on taxes as well. There are bigger issues than taxes, my friend.
    - ogre_magi 9y ago
      We probably disagree on the big issues too. I'm not gonna call you "revolting," though.
guyzero 9y ago
The $1B Reno datacenter expansion was announced in May of 2017. So it has nothing to do with cash repatriation really. http://www.rgj.com/story/news/2017/05/10/breaking-apple-announces-1-billion-data-center-expansion-east-reno/316884001/ http://www.rgj.com/story/news/2017/05/10/breaking-apple-anno...
- thetinguy 9y ago
  Apple has a couple of data centers across the us. The opening of one in Reno is not the new campus.
- WalterBright 9y ago
  The stock market rally started on election day. Clearly it was not based on what Trump had done, but anticipated what Trump with a GOP Congress would do. The expectation of a large corporate tax cut was certainly there throughout 2017, and may very well have had a large influence on the Reno decision.
  - threeseed 9y ago
    > The expectation of a large corporate tax cut was certainly there throughout 2017 No it wasn't. Most people thought that after the health care debacle that Trump would've pivoted to infrastructure. Especially given the tax cuts were so fiscally reckless which would've alienated moderate Senators like Collins or McCain. > and may very well have had a large influence on the Reno decision Apple has other data centres. They were largely driven by their own needs and not to do with macro economic effects.
    - WalterBright 9y ago
      > No it wasn't. Most people thought What matters was what investors thought. And as a follower of the financial/investing news, there was very much an expectation of a large corporate tax cut. > alienated moderate Senators like Collins or McCain Both voted for it. > not to do with macro economic effects The size of the tax cut was certainly enough to significantly affect the economics of a datacenter investment.
jasonlotito 9y ago
> I find it fascinating that a tax plan proposed by a President reviled throughout the Valley Not quite. The proposal has been on the table for years. The difference has been how to use the proceeds from repatriation. Republicans wanted lower corporate taxes. Democrats wanted something else. This wasn't new, it wasn't unique, and it wasn't Trump. Believing this was a plan proposed by Trump ignores history and facts. Sure, he signed the bill into law, but the same thing would have effectively happened had Democrats been in charge instead of Republicans.
- xienze 9y ago
  > but the same thing would have effectively happened had Democrats been in charge instead of Republicans. Wasn't that the case when Obama was first elected? And yet, it didn't happen. They've kind of painted themselves into a corner with the "the rich and corporations aren't taxed enough" rhetoric, not sure how they'd successfully sell a corporate tax holiday to their base.
- WalterBright 9y ago
  The buck stops with the President. If the GOP Congress won't work with the President, it's the President's job to find a way to get enough of them on board. LBJ was a master at getting "impossible" legislation through Congress, so I don't believe it was impossible for Obama. I suspect this is where his inexperience in politics showed. An example of this was outlined on Frontline a few years back. Obama crafted a bill, and included a number of items the GOP said they wanted. He then presented it to the GOP, and was surprised when the GOP soundly rejected it. This is a failure of Sales 101, in that it was set up so Obama would get the credit. Of course the GOP rejected it. A craftier technique is to invite the GOP to write those sections of the bill themselves, and give the GOP the credit. Same bill, but totally different approach. Again, the buck stops with the President.
  - specialist 9y ago
    Obama also failed to fulfill many appointments, including a Supreme Court Justice. What, in your opinion, should he have done differently?
tootie 9y ago
Any rational skeptic was couching their criticism that this was net loss for taxpayers, not a total loss. While Apple and others can publicly crow about new investment and jobs and give the president and GOP a PR coup in terms of their bill, you have to consider how much they were paid to do this. The dynamic score said that of the $1.5T in lost revenue, we will likely recoup about a third in new revenue. This will be a sizable amount of stimulus especially for companies like Apple that have enormous profits. If Apple are investing $30B in new capital, it's probably because they are being handed twice that much in tax breaks.
Shivetya 9y ago
Long term should benefit as well as the short term. The US had one of the highest tax rates on corporations in the world and all it did was cause the money to stay out of the country. Just like very rich individuals, when you are not bound to one country you can just keep elsewhere. The US even experiences it on a smaller scale with people moving from state to state. Obama Administration did propose 28% in 2012 and get taxes for those under 200k down as well. The current plan that is in effect has a lot of similarities but it did not set a 200k high limit. The US really needs to figure out a way to handle small business taxes that get caught up in the way personal taxes are done. Less tax burden is always a win. What the US really needs for explosive growth is a cap on spending. Many other countries to include a few European countries have rules in place to keep it below growth for a reason, because it pays off fast.
jayd16 9y ago
And all it took was another $1 trillion in deficit spending. Color me unimpressed.
pg314 9y ago
> to repatriate much of its overseas cash and invest it here in the US. Where in the article does it state that they will invest the repatriated cash in the US? The only concrete number is the $38 billion tax payment upon repatriation, which is a direct result of the tax plan. If you read carefully they state nowhere how much of the repatriated cash will be invested instead of simply returned to shareholders. They just added up what they were already planning to invest anyway in the next 5 years. It might have increased slightly with the tax cuts, but not a whole lot. They weren't constrained by cash before, only by meaningful investment opportunities. Keep an eye on their quarterly and yearly reports to get the real story. I expect a large chunk of the repatriated cash will be used to pay off the debt they took on to finance past dividends and share repurchases. The rest will be used for future share buybacks.
- vasilipupkin 9y ago
  Well, if it's simply returned to the shareholders, then the shareholders will invest it. Economy wide it makes no difference, the money will be invested
  - pavlov 9y ago
    What makes you think they’ll invest it in the US? Rich person/fund X will get a larger dividend than before, and they’ll invest in the same way as before. It’s not like this money is somehow earmarked. If giving more money to the rich were the solution to America’s problems, it would have worked by now.
    - vasilipupkin 9y ago
      it shouldn't matter where they invest it. investing it in the US when the optimal thing to do is to invest it elsewhere is bad overall, regardless of which entity is doing the investing. World economy is not a zero sum game.
  - pg314 9y ago
    > then the shareholders will invest it. Or use it for consumption. And that consumption or those investments are not necessarily in the US. Where do you think that money is now? It's not like it is stored as dollar bills in some warehouse abroad. The 'repatriation' they are talking about is purely an accounting/tax fiction. If you look at Apple's yearly report [1], on page 49, it details how its cash and equivalents are invested. Most of it is in US treasury securities ($42 billion) and commercial securities ($131 billion). Repatriating it will not magically make it somehow more productively invested in the US. In some cases, quite the opposite: as a foreign Apple shareholder, any dividends I receive are spent outside the US. [1] http://investor.apple.com/secfiling.cfm?filingid=1628280-16-20309 http://investor.apple.com/secfiling.cfm?filingid=1628280-16-...
banku_brougham 9y ago
Its not fascinating. The contents of the tax plan were only known to corporate CFOs during the week of the vote, there hasn’t been time for due diligence since then to change direction of a top 10000 US company. Any corporate announcement you read in january has been under corporate review at least since end Q3 2017.
mozumder 9y ago
This has nothing to do with the tax plan. It's a $5 billion additional investment in US operations over 5 years, most likely due to competitive pressures and regular business growth. If you want to thank anyone, thank Google/Amazon/Microsoft for forcing Apple to do this. That $5 billion over 5 years is nothing for Apple, since they get about $100 billion in revenue each year from the US alone, with a large percentage of that in pure profit. They don't need repatriated cash for this $1 billion/year investment. It's a pretty small US investment, really. That's why they spend their cash on dividends. Dividends basically means they a company has better idea on what to spend their money on than to just give it back to their shareholders.
pvelagal 9y ago
I have a question : What is the difference between Apple paying taxes to Trump's Govt, which will make sure that the funds will be used to create jobs. Vs Apple getting all the money and using to create jobs on its own.
KallDrexx 9y ago
Most people haven't given the real reason this is happening. https://www.ft.com/content/789e69f6-e1ea-11e7-a8a4-0a1e63a52f9c https://www.ft.com/content/789e69f6-e1ea-11e7-a8a4-0a1e63a52... If it's behind a paywall the interesting part is: > Senate and House leaders unveiled the final version of their tax reform legislation on Friday, putting the Republicans on the cusp of delivering tax cuts of close to $1.5tn. As part of the package they will impose a 15.5 per cent one-off tax on offshore cash, coupled with an 8 per cent levy on less liquid assets, a Republican aide said. So the tax plan didn't convince Apple to repatriate it's money because the tax rates were amazing. The tax plan is causing Apple to pay 15.5% taxes anyways, so since it's being forced to pay taxes on it they might as well use that opportunity to move a lot of that cash to the US where it's more usable for them. Chances are after this Apple (and all other megacorps) will go right back to storing cash off seas waiting for their next chance for another free chance to move money to the US.

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).
gramstrong 9y ago
A short term domestic investment for a long-term tax benefit. The headlines made immediately after the new legislation is passed are what will stick with people the most. I'm not saying this is definitely the case, and I would love to be proven wrong. I just don't see how a tax cut would have corporations scrambling to return jobs to the U.S., instead of having both a tax cut AND cheap foreign labor.
downandout 9y ago
No. These types of investments don’t simply wash away - they go to building long term value for the corporations that make them, which creates good jobs, demand for housing, etc. Further, as long as this tax plan remains in place, corporations will continue to allow international profits to flow back into the US. Even if Trump is unseated in the next election, given the positive reaction among corporations to his tax plan, it may be politically impossible for the next Administration to return to punitive tax rates despite their predilection for them.
j4ship 9y ago
you are asking that question , but the answer is "who knows" ... your reasoning is apt , but its not a prediction of the future.
seanmcdirmid 9y ago
The USA has moved to a territorial tax system for corporations, so any income earned abroad will no longer be subject to US tax (only taxed by the country where the income was generated), and so can be freely moved back to the USA if the companies wish. There is no longer a distinction to be made concerning where money can be spent without being US taxed.
- vasilipupkin 9y ago
  There was little distinction before as companies could borrow against their overseas cash to invest in the US
  - seanmcdirmid 9y ago
    They would still have to pay those loans back out of their US income (or any income repatriated). Bankruptcy would be weird, in that case.

gjacolby83 9y ago

Apple is a one of a kind company. In my opinion, I don't think most US Corporations are concerned with the needs of the many.

icebraining 9y ago
And you think Apple is? Why?
akvadrako 9y ago
Apple is a significant percentage of the economy all by itself.
- module0000 9y ago
  What do you think a "significant percentage" is? Is it 10%? 1%? 0.005%?
  - saagarjha 9y ago
    I wouldn't call it a "significant percentage", but by a straightforward calculation of revenue/GDP shows that it's about 1% of the US's economy.

IBM 9y ago

Nobody had to convince Apple or any other company to do anything. The repatriation is deemed, i.e no company has a choice in it. And while you may believe it was "proposed" by Trump, it has actually been in the works for years by both parties in Congress and by Obama [1]. They could just never pass a bill (because what else did you expect with Obama in the WH and Republicans in control of Congress) because Democrats wanted to spend it on infrastructure, and Republicans wanted to cut taxes for corporations, which is what they ended up doing. The repatriation of Apple's overseas cash would have happened regardless of who became President. [1] https://www.reuters.com/article/us-usa-budget-tax/obama-targets-foreign-profits-with-tax-proposal-republicans-skeptical-idUSKBN0L51IX20150201 https://www.reuters.com/article/us-usa-budget-tax/obama-targ...

j4ship 9y ago
you couldnt pass this bill becuase liberals didnt want it , because liberals dont want to see this kind of legislation. You have it now becuase liberals have less stopping power.
downandout 9y ago
>The repatriation is deemed, i.e no company has a choice in it. Incorrect. There is a repatriation tax holiday that enables them to pay lower rates than normal on repatriated cash. It is designed to encourage repatriation. They are not required to do so.
- IBM 9y ago
  >Incorrect. There is a repatriation tax holiday designed to encourage repatriation. They are not required to do so. Unfortunately, you're incorrect. https://www.pwc.com/us/en/tax-services/publications/insights/tax-reform-readiness-us-mandatory-deemed-repatriation-issues.html https://www.pwc.com/us/en/tax-services/publications/insights...
  - hateduser2 9y ago
    No u

magicalist 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. Why is that fascinating? It's the tax holiday the tech megacorps have been asking for since the last one in 2004.

downandout 9y ago
And yet nobody gave it to them until now, which resulted in trillions of dollars that should have been benefitting the US economy sitting unused in places like Ireland.
- magicalist 9y ago
  Let's say I thought I was paying too much in taxes, and now I'll pay less in taxes next year due to this tax cut. No one gave me that tax cut until now! Nothing about that is "fascinating". You're trying to make a narrative out of "hey, we want this." "OK, here it is." You'd have more of a point if you were trying to say that all the doomsayers were wrong about the downsides of a tax holiday and here's the proof, but it's a bit early for that.
- jonknee 9y ago
  You do know that the money isn't literally sitting overseas right? It is invested (Apple would be the largest bond fund in the world [1] if they accepted outside money). So they'll sell the investments, pay a little tax and then probably do a massive buy back of their shares and a special dividend. A little switching around on paper, but certainly not a stimulus of any sort. [1] https://www.bloomberg.com/news/articles/2017-05-04/apple-buys-more-company-debt-than-the-world-s-biggest-bond-funds https://www.bloomberg.com/news/articles/2017-05-04/apple-buy...
  - WalterBright 9y ago
    Of course there is no Apple cash hoard, it's all invested. The difference is it being invested in foreign countries, or invested in America.

eqmvii 9y ago

> a tax plan proposed by a President The corporate tax changes weren't his idea - they have been kicking around Capitol Hill with more or less bipartisan support for years, and it almost happened while Obama was president. The full package of changes wound up being highly politicized and controversial, but the corporate changes were always seen as very likely to pass sooner or later.

notyourday 9y ago
They may have been kicked around the Capitol Hill for years but while (D)s had control of the presidency it did not happen. There was a time when (D)s had control of Congress, Senate and Presidency with Obama as a President and it did not happen. To claim this tax cut is a result of bipartisan legislation is rather odd. [Edit] It must be really painful to downvote reality.
- pageandrew 9y ago
  They only claim bipartisan responsibility when the tax plan seems to do good for the country (billions of dollars in new investments, tax revenue, repatriation etc.)
zghst 9y ago
He was pretty much the only finalist candidate that proposed cutting taxes, and not just by a bit, Trump by his nature wanted the greatest change
- threeseed 9y ago
  This is factually baseless nonsense. Jeb Bush: https://taxfoundation.org/details-and-analysis-governor-jeb-bush-s-tax-plan/ https://taxfoundation.org/details-and-analysis-governor-jeb-... Marco Rubio: https://taxfoundation.org/presidential-hopeful-marco-rubio-already-has-tax-plan/ https://taxfoundation.org/presidential-hopeful-marco-rubio-a... You can compare all candidate plans here: https://taxfoundation.org/comparing-2016-presidential-tax-reform-proposals/ https://taxfoundation.org/comparing-2016-presidential-tax-re... In fact it was Ben Carson who proposed cutting the tax rates the most (corporate tax rate -> 14.9%).

untog 9y ago

> the one thing that finally convinced Apple to repatriate much of its overseas cash and invest it here in the US That doesn't really seem too surprising. The previous administration tried to force them to do it, they refused. The current administration gave them what they wanted, they did it. > If other US corporations follow suit with repatriation, the American economy will experience unprecedented corporate reinvestment. Yes, but "corporate reinvestment" can mean a great many things. Endless rounds of share buybacks (as many CEOs have indicated they want to do) won't really benefit the broader economy (or actual citizens) all that much.

seanmcdirmid 9y ago
The repatriation isn’t optional, so you could say the current administration succeeded in forcing them to do it.

khana 9y ago

Truly yes. Personally, I am happy to hear this encouraging news. USA.

arrrg 9y ago

This might be the most brilliant tax plan in the universe. The president wouldn’t be any less revolting because of that. I’m not sure why you are connecting these two ideas. It is true that the partisan extremism of everything leads to people irrationally hating everything someone does (or, as in this case, is loosely associated with), but that doesn’t mean the opposite. This does not and should not wash this revolting presidency clean.

zghst 9y ago
Amen!
ogre_magi 9y ago
You are very virtuous and your political opponents are very gross.
- archagon 9y ago
  Yep, everything is Totally Normal™ in American politics!
- prklmn 9y ago
  I heard Stalin was good on taxes as well. There are bigger issues than taxes, my friend.
  - ogre_magi 9y ago
    We probably disagree on the big issues too. I'm not gonna call you "revolting," though.

guyzero 9y ago

The $1B Reno datacenter expansion was announced in May of 2017. So it has nothing to do with cash repatriation really. http://www.rgj.com/story/news/2017/05/10/breaking-apple-announces-1-billion-data-center-expansion-east-reno/316884001/ http://www.rgj.com/story/news/2017/05/10/breaking-apple-anno...

thetinguy 9y ago
Apple has a couple of data centers across the us. The opening of one in Reno is not the new campus.
WalterBright 9y ago
The stock market rally started on election day. Clearly it was not based on what Trump had done, but anticipated what Trump with a GOP Congress would do. The expectation of a large corporate tax cut was certainly there throughout 2017, and may very well have had a large influence on the Reno decision.
- threeseed 9y ago
  > The expectation of a large corporate tax cut was certainly there throughout 2017 No it wasn't. Most people thought that after the health care debacle that Trump would've pivoted to infrastructure. Especially given the tax cuts were so fiscally reckless which would've alienated moderate Senators like Collins or McCain. > and may very well have had a large influence on the Reno decision Apple has other data centres. They were largely driven by their own needs and not to do with macro economic effects.
  - WalterBright 9y ago
    > No it wasn't. Most people thought What matters was what investors thought. And as a follower of the financial/investing news, there was very much an expectation of a large corporate tax cut. > alienated moderate Senators like Collins or McCain Both voted for it. > not to do with macro economic effects The size of the tax cut was certainly enough to significantly affect the economics of a datacenter investment.

jasonlotito 9y ago

> I find it fascinating that a tax plan proposed by a President reviled throughout the Valley Not quite. The proposal has been on the table for years. The difference has been how to use the proceeds from repatriation. Republicans wanted lower corporate taxes. Democrats wanted something else. This wasn't new, it wasn't unique, and it wasn't Trump. Believing this was a plan proposed by Trump ignores history and facts. Sure, he signed the bill into law, but the same thing would have effectively happened had Democrats been in charge instead of Republicans.

xienze 9y ago
> but the same thing would have effectively happened had Democrats been in charge instead of Republicans. Wasn't that the case when Obama was first elected? And yet, it didn't happen. They've kind of painted themselves into a corner with the "the rich and corporations aren't taxed enough" rhetoric, not sure how they'd successfully sell a corporate tax holiday to their base.
WalterBright 9y ago
The buck stops with the President. If the GOP Congress won't work with the President, it's the President's job to find a way to get enough of them on board. LBJ was a master at getting "impossible" legislation through Congress, so I don't believe it was impossible for Obama. I suspect this is where his inexperience in politics showed. An example of this was outlined on Frontline a few years back. Obama crafted a bill, and included a number of items the GOP said they wanted. He then presented it to the GOP, and was surprised when the GOP soundly rejected it. This is a failure of Sales 101, in that it was set up so Obama would get the credit. Of course the GOP rejected it. A craftier technique is to invite the GOP to write those sections of the bill themselves, and give the GOP the credit. Same bill, but totally different approach. Again, the buck stops with the President.
- specialist 9y ago
  Obama also failed to fulfill many appointments, including a Supreme Court Justice. What, in your opinion, should he have done differently?

tootie 9y ago

Any rational skeptic was couching their criticism that this was net loss for taxpayers, not a total loss. While Apple and others can publicly crow about new investment and jobs and give the president and GOP a PR coup in terms of their bill, you have to consider how much they were paid to do this. The dynamic score said that of the $1.5T in lost revenue, we will likely recoup about a third in new revenue. This will be a sizable amount of stimulus especially for companies like Apple that have enormous profits. If Apple are investing $30B in new capital, it's probably because they are being handed twice that much in tax breaks.

Shivetya 9y ago

Long term should benefit as well as the short term. The US had one of the highest tax rates on corporations in the world and all it did was cause the money to stay out of the country. Just like very rich individuals, when you are not bound to one country you can just keep elsewhere. The US even experiences it on a smaller scale with people moving from state to state. Obama Administration did propose 28% in 2012 and get taxes for those under 200k down as well. The current plan that is in effect has a lot of similarities but it did not set a 200k high limit. The US really needs to figure out a way to handle small business taxes that get caught up in the way personal taxes are done. Less tax burden is always a win. What the US really needs for explosive growth is a cap on spending. Many other countries to include a few European countries have rules in place to keep it below growth for a reason, because it pays off fast.

jayd16 9y ago

And all it took was another $1 trillion in deficit spending. Color me unimpressed.

pg314 9y ago

> to repatriate much of its overseas cash and invest it here in the US. Where in the article does it state that they will invest the repatriated cash in the US? The only concrete number is the $38 billion tax payment upon repatriation, which is a direct result of the tax plan. If you read carefully they state nowhere how much of the repatriated cash will be invested instead of simply returned to shareholders. They just added up what they were already planning to invest anyway in the next 5 years. It might have increased slightly with the tax cuts, but not a whole lot. They weren't constrained by cash before, only by meaningful investment opportunities. Keep an eye on their quarterly and yearly reports to get the real story. I expect a large chunk of the repatriated cash will be used to pay off the debt they took on to finance past dividends and share repurchases. The rest will be used for future share buybacks.

vasilipupkin 9y ago
Well, if it's simply returned to the shareholders, then the shareholders will invest it. Economy wide it makes no difference, the money will be invested
- pavlov 9y ago
  What makes you think they’ll invest it in the US? Rich person/fund X will get a larger dividend than before, and they’ll invest in the same way as before. It’s not like this money is somehow earmarked. If giving more money to the rich were the solution to America’s problems, it would have worked by now.
  - vasilipupkin 9y ago
    it shouldn't matter where they invest it. investing it in the US when the optimal thing to do is to invest it elsewhere is bad overall, regardless of which entity is doing the investing. World economy is not a zero sum game.
- pg314 9y ago
  > then the shareholders will invest it. Or use it for consumption. And that consumption or those investments are not necessarily in the US. Where do you think that money is now? It's not like it is stored as dollar bills in some warehouse abroad. The 'repatriation' they are talking about is purely an accounting/tax fiction. If you look at Apple's yearly report [1], on page 49, it details how its cash and equivalents are invested. Most of it is in US treasury securities ($42 billion) and commercial securities ($131 billion). Repatriating it will not magically make it somehow more productively invested in the US. In some cases, quite the opposite: as a foreign Apple shareholder, any dividends I receive are spent outside the US. [1] http://investor.apple.com/secfiling.cfm?filingid=1628280-16-20309 http://investor.apple.com/secfiling.cfm?filingid=1628280-16-...

banku_brougham 9y ago

Its not fascinating. The contents of the tax plan were only known to corporate CFOs during the week of the vote, there hasn’t been time for due diligence since then to change direction of a top 10000 US company. Any corporate announcement you read in january has been under corporate review at least since end Q3 2017.

mozumder 9y ago

This has nothing to do with the tax plan. It's a $5 billion additional investment in US operations over 5 years, most likely due to competitive pressures and regular business growth. If you want to thank anyone, thank Google/Amazon/Microsoft for forcing Apple to do this. That $5 billion over 5 years is nothing for Apple, since they get about $100 billion in revenue each year from the US alone, with a large percentage of that in pure profit. They don't need repatriated cash for this $1 billion/year investment. It's a pretty small US investment, really. That's why they spend their cash on dividends. Dividends basically means they a company has better idea on what to spend their money on than to just give it back to their shareholders.

pvelagal 9y ago

I have a question : What is the difference between Apple paying taxes to Trump's Govt, which will make sure that the funds will be used to create jobs. Vs Apple getting all the money and using to create jobs on its own.

KallDrexx 9y ago

Most people haven't given the real reason this is happening. https://www.ft.com/content/789e69f6-e1ea-11e7-a8a4-0a1e63a52f9c https://www.ft.com/content/789e69f6-e1ea-11e7-a8a4-0a1e63a52... If it's behind a paywall the interesting part is: > Senate and House leaders unveiled the final version of their tax reform legislation on Friday, putting the Republicans on the cusp of delivering tax cuts of close to $1.5tn. As part of the package they will impose a 15.5 per cent one-off tax on offshore cash, coupled with an 8 per cent levy on less liquid assets, a Republican aide said. So the tax plan didn't convince Apple to repatriate it's money because the tax rates were amazing. The tax plan is causing Apple to pay 15.5% taxes anyways, so since it's being forced to pay taxes on it they might as well use that opportunity to move a lot of that cash to the US where it's more usable for them. Chances are after this Apple (and all other megacorps) will go right back to storing cash off seas waiting for their next chance for another free chance to move money to the US.