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Apple Announces 5-Year Plan for Investments in the US

Apple Announces 5-Year Plan for Investments in the US
Things are looking good for Apple!

Earlier today, the Cupertino-based company announced its plans to contribute $350 billion into the US economy for the next five years. This contribution will come in the form of new investments and its current expenditure on supply and manufacturing with domestic companies. 

In a lengthy press release, the company divulged the three areas wherein these investments will come into the picture: the digital App Store economy, current domestic suppliers and manufacturers, and also on direct employment with Apple.

Although Apple has plans to invest a huge amount into the economy, it isn't doing that without something in return for them. This means that they aren't just dropping the cash somewhere and hoping the government will pick it up. Instead, Apple is using this money for their normal accounting. For instance, they will be investing $75 billion from the budget into their capital expenditures, repatriation tax payment, and new manufacturing investments. The remaining sum, meanwhile, is an effect of how a large company like Apple could impact the economy of the country with its regular spending and growth.  

When it comes to their repatriation taxes, Apple plans to make a new investment amounting to around $38 billion. From that reparation, Apple plans to produce cash to the US of up to $252 billion. The company also plans to make an investment of over $30 billion in capital expenditures throughout the five-year duration. At the same time, the company hopes to increase its US advanced manufacturing funding that it announced last year. With today's announcement, the company plans to increase this fund from $1 billion to $5 billion. 

Apple says that these investments will lead to the creation of more than 20,000 new jobs throughout the five-year period. The company has also announced a new campus it plans to create in the US, which will serve its technical support staff. As of this writing, Apple has not disclosed where the location of this new campus will be.

Along with the announcements Apple made today, we can expect that this will not only be interesting for those in the White House but for individual states and municipalities too. In the past, various states and cities have tried to lure Apple's competitor, Amazon, by offering them lucrative tax breaks and subsidies. For sure, Apple executives can expect localities to get in touch with them with these offers real soon. 

Any guesses on where Apple's next campus will be?


Source: PhoneScoop, The Verge

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19 comments:

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  1. Long overdue on Apple's part. Now start talking about building the smartphones in the USA also. With their 1100 pricing they should be built here providing good jobs with benefits to Americans. Just my opinion.

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  2. Replies
    1. Also political, but less so...

      Jason, Apple had flourished and expanded greatly under Obama, and under GWB and others before. There's no Trump policy you can point to that suddenly made Apple do anything great.

      If you look at Apple's history, they have been on such a strong trajectory of jobs and growth for decades

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    2. Signed, Carrier's recently fired Indiana employees.

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    3. Apple has done well for a long time, but it parked $255B in cash overseas because of the high, 35% corporate tax rate. Now they will pay $38 Billing in taxes (no, this is not "a new investment" as written above) and bring the vast majority of the $255 B back to the US. We can certainly thank the Congress and Donald Trump for that, and the extra jobs and investments related to that repatriation.

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  3. There's still a lot of overtaxation and unnecessary regulation which forces American employers to fire workers at places like Carrier.

    I hope this comment doesn't get blocked as being off-topic. After all, I am talking about a carrier, aren't I?

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    Replies
    1. Considering that corporate taxes were just cut from 35% to 20%, high taxes are a lousy excuse for firing workers.

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    2. Carrier received $7 million in Indiana tax breaks to keep 1100 jobs in the state. Trump touted this deal and did a nice photo op in the state along with Mike Pence. Since then, 553 people have been laid off from that plant, and while Carrier claims they are keeping 1100 jobs as promised to Trump, 1030 of those jobs were never in danger of being moved.

      Soo...a $7 million tax break for at best 70 jobs saved. So much winning.

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    3. Faulty accounting. Carrier promised to keep the plant open, not move it to Mexico, and protect about half of the jobs there in exchange for the tax breaks. They have done that - and the plant is still open. "1030 jobs were never in danger" of being moved was speculation (vs fact) that engineering and design jobs would not move to Mexico when the plant moved. The plant did not move. That is good for the hundreds of workers who are still working in Indiana. Yes, we can all feel sorry for the 200 who were just laid off. But 1400 jobs did not move to Mexico. That is still a win.
      PS: the corp tax rate is now 21%, not 20%. That 1% paid for the increased child tax credit and a couple of other items needed to pass the Bill.

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  4. With the increasing and soon to be pervasive use of AI (and robotics in manufacturing), more jobs will be lost, regardless of what the tax rate is. Businesses are rational entities relentlessly focused on their own bottom line, not your welfare. Just because they can retain more of their earnings now doesn't mean jobs will be spared.

    Taxes are necessary to pay for things in society, like disaster relief, your road in front of your house, and a whole host of other life essentials. The IRS is not a devil to be despised. Somebody will have to pay for these, and with the tax cut that further balloons the deficit, we are just pushing the debt onto our children. What the tax cut is achieving now is to shift the burden from businesses onto consumers, primarily middle-income and lower. Your federal income tax may be reduced, but your other taxes will inevitably go up to compensate for the loss of revenue. There is no magic wand.

    Some people think that by increasing protectionism, ie abandoning international trade agreements, and by tax cuts (which primarily benefit businesses and high-earners), they will be the beneficiaries of the trickle-down effect from more prosperous businesses. We have three more years to find out if that's true.

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    Replies
    1. Economists disagree about whether the tax cuts can generate enough economic activity to offset the revenue loss. The Congressional Budget Office tries their best, but has a poor track record in scoring this kind of thing. Businesses will increase investment and jobs, increase pay and reduce prices, all of which helps many individuals. We don't know whether the deficits will increase over the next 8 years, remain steady or eventually go down. I predict that the national debt will not double as it has over the last 8 years. Ironic that some of the same people concerned about debt and deficits now didn't object to that extra $10T in national debt.
      Almost all individual Americans will also see reduced taxes over the next 8 years, an average of $2k/year. Many Americans will get better jobs or be able to go back to work as the economy grows. This is excellent. The labor participation rate for adults has been shockingly low, in the mid 60% range, a national tragedy.

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    2. "Businesses are rational entities relentlessly focused on their own bottom line, not your welfare. Just because they can retain more of their earnings now doesn't mean jobs will be spared."

      Overtaxation punishes companies for hiring Americans, and drives offshoring. Reducing this means more jobs and better job security for Americans.

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    3. It's in the headlines "No one wants your used clothes anymore as fast fashion floods the bins". It's a national tragedy that more people can comfortably leave the work force? What a sad statement that is! Let robots make the things we need, and let people get back to living meaningful lives. No only do we not need faster and larger piles of planned-obsolescence junk, the market is increasingly indicating it doesn't want it at all!

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    4. Protecting US industry from unfair trade practices and agreements is a good thing, even if prices increase in the short term. For too many years the Commerce Dept and US Trade Representative accepted trade deals and practices that hurt US businesses and jobs - cheap imports can never justify the protectionism and unfair subsidies of our trading partners.

      Next year Chinese auto companies will start selling cars here in the US. GM already sells a Buick SUV here that is made in China. But China charges high tariffs on US-made cars. A Tesla costs double in China, and that's not all shipping! US automakers have to have a Chinese auto partner to build cars in China. The partner studies our technology and intellectual property and uses that information to improve their own competing products. US companies cannot remove profits from China, so they have to be reinvested there.

      Japan has long erected barriers, tariff and non-tariff on US cars. They conduct expensive, redundant safety and emissions testing of imported cars. They have strict and expensive dealer and distributer requirements that drive up costs of imports. The US has never effectively dealt with these issues even as millions of cars and parts are imported each year from Japan.
      Japan and China also use excuses to ban US food imports, typically based on isolated and controlled problems in the US. Japan heavily subsidies their farmers, far more we do in the US. Canada heavily subsidies the cost of timber to Canadian companies, which comes from public lands and is then exported to the US.

      Resolving these trade practices and updating trade agreements that no longer meet the expected objectives will be good for the US. Fair trade is good. Unfair trade is bad.

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    5. "Protecting US industry from unfair trade practices and agreements is a good thing, even if prices increase in the short term."

      I disagree. Poorly run businesses that overcharge should not be protected.

      Whether or not to do business with these companies or their foreign competition is the business of individuals, not the government.

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  5. >Economists disagree...

    I suppose it depends on where you get your news. Nowaday, both sides have their own narratives, and as with the Internet, you can always find "experts" to match your preferred narrative.

    My take is simple: We are and have been in deficit spending for a long while. A tax cut will make it worse. Relying on growth to "make up" the lost revenue has been touted many times before, and it has never panned out.

    I disagree with your predictions and statistics, but that isn't surprising given the above. As said, we have three more years to find out. No need for predictions. One hopes that real-life experience will win out over all these ideological and tribalist "mine is better than yours" posturing that is all the rage now. At least, I hope so.

    My take is that the main problem isn't so much who's right and who's wrong, but the increased polarization and the lack of common ground. If everybody wants to "win" and "no compromise" and "no appeasement," then the consequence is paralysis, as the looming govt shutdown exemplifies.

    We'll see what happens. At this point, I'm not optimistic for the future. Even if one side "wins," we all lose when we can't stop looking at the other side as the enemy.

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  6. "We are and have been in deficit spending for a long while. A tax cut will make it worse."

    Actually there have been major examples at the Federal level where cuts in tax rates resulted in strong growth in revenue.

    However, increases in waste spending drove debt increases.

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  7. Just cancelled subscriptions to IBT & WSJ thanks to the newly found experts on Prepaid Phone News.

    ReplyDelete
    Replies
    1. "Just cancelled subscriptions to IBT & WSJ thanks to the newly found experts on Prepaid Phone News."

      Just look at the soaring revenues after, and as a result of, the Bush middle-class tax cut of 2003.

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