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Apple Says It Will 'Contribute' $350 Billion in the US Economy Over the Next 5 Years (cnbc.com)
Apple said on Wednesday it will invest $350 billion in the U.S. economy over the next five years, touting the creation of 20,000 new jobs and a new campus thanks, in part, to the prospect of tax reform. From a report: The company said it expects tax repatriation payments of about $38 billion, indicating that it will bring a portion of its $250 billion overseas cash back to the U.S. As of November, the company had $268.9 billion in cash, both domestically and overseas. The job creation will focus on direct employment, but also suppliers and its app business, which it had already planned to grow substantially. "We have a deep sense of responsibility to give back to our country and the people who help make our success possible," chief executive Tim Cook said in a statement.
You know, the ones they weaseled out of by pretending they're an Irish company?!? Yeah, they're now paying some of it to the E.U., but that's still B.S. for America.
...in a positive light?
In debates about Christianity, there are two groups: those looking for answers, and those looking to just ask questions.
Thursday morning, Walmart had a flashy announcement: Thanks to corporate tax cuts, it was giving its employees bonuses of up to $1,000. Walmart and President Trump pointed to the announcement as proof that the corporate tax cuts are really a boon to working-class Americans.
This announcement, as ThinkProgress reported earlier, was much more complicated than it first sounds.
Walmart employees are eligible for the $1,000 bonus only if theyâ(TM)ve worked at the company for 20 years. Most Walmart employees, of course, havenâ(TM)t worked there that long. Those employees will receive a smaller bonus based on seniority. Walmart didnâ(TM)t explain exactly how the sliding scale will work, but said the total value of the bonuses will be $400 million. Walmart has about 2.1 million employees, which works out to be an average bonus of about $190.
The one-time bonus Walmart announced this morning amounts to just over 2 percent of the total value of the tax cut to the company.
In fiscal year 2017, Walmart had pre-tax profits of about $20.5 billion and paid an effective federal tax rate of around 30 percent. With a new corporate tax rate of 21 percent, the corporate tax cut is worth at least $1.85 billion to Walmart every year. Since this cut is permanent, the true benefits to Walmart will grow much larger over time. But itâ(TM)s safe to say that, over 10 years, this corporate tax cut will be worth over $18 billion to Walmart.
But now it appears the announcement was timed carefully to cover for thousands of unannounced layoffs.
Business Insider reports that today, Walmart is abruptly closing numerous Samâ(TM)s Clubs stores across the United States. In some cases âoeemployees were not informed of the closures prior to showing up to work on Thursdayâ and âoelearned that their store would be closing when they found the storeâ(TM)s doors locked and a notice announcing the closure.â
citation provided
Bingo.
The $1000 bonuses will go to top Walmart brass...
Meanwhile, on page 20, Walmart closed a bunch of Sam's Club stores and laid off their entire staff.
There are a few factors.
First there is the multiply by 12 rule. Where every dollar spent, will be Multiplied by 12 benefit to the economy.
So that brings it down to 1.46 Million per person being spent. Then this is over 5 years so we get 292 thousand a year. Roughly 1/3 spent goes to benefits outside of ones salary, so that bring $194 Thousand per year on average per employee in raw salary. Which is still on the high side, and I bet Apple is calculating some other bogus numbers such as community starting businesses such as restaurants and stores to accommodate these people.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Yesterday we saw Apple fanbois bemoan the "Apple Shaming Society" when a story appeared about the shameful working conditions at less visible suppliers in China. Today, however, the fanbois will find very little to like about this news; validating Trumpanzian tax policy is not what they want to see from their gadget god.
Not at all.
Maw! Fire up the karma burner!
I think you forgot overhead. Aside from salary and benefits, it costs money to give an employee a desk and chair to sit in, a phone, a computer, people to manage the IT infrastructure, administer HR and payroll, run the AC and get the place cleaned, pay mortgage/rent/property tax on the building, and so on. Typically that can be anywhere from 50% to over 100% on top of an employee's salary.
That said, I still agree that the numbers appear to be suspiciously high.
If it weren't for deadlines, nothing would be late.
I think you overlook those who view Trump, the tax law, and Apple all as positive things. It's way more people than you might think...
Android and Apple devices are so widespread I don't think you can derive much political leanings from them.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
A large sum of money is going to be re-patriety now that the tax law makes more sense and is in line with other countries... Apple is going to be paying hundreds of millions of dollars in U.S. taxes bringing money back to the U.S.
Just where did you think this money was coming from anyway?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The first correction - "re-patrriety" (whatever the hell that is) should be "re-patriated".
Secondly, that re-patriation will cause Apple to pay a one-time payment of 38 BILLION dollars in taxes to the U.S. Is that enough to slate your dramatic thirst for Apple's cash?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Ah, remember the heady days of 2007 going into 2008?
Dow at 14000, hurrah! Bush's policies are amazing. America will boom.... oh, shit, hello 2008 banking crisis economic collapse permanent bailout economy...
Stocks blasting upwards despite no real improvement in overall business for most companies
How is a drop in corporate taxes from 35 to 21% not a VAST improvement in every business in the US? I mean, without any changes products that were marginal in profitability are suddenly wildly profitable. Who knows what kind of new businesses are now possible that would not have been possible with that kind of tax overhead. That is a huge improvement which is why the stock market is rocketing.
Not going to argue with the rest of your choices except a little quibble about Bitcoin, but I agree it's still speculative. Real estate prices will come down in some regions, but only ones that are trending towards shithole status. For others they will keep rising.
Also the streaming service race does seem a bit absurd but the long tail and halo effect are powerful forces there to help pay back costs.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Initial unemployment claims are starting to tick up. Leading indicator.
Actually unemployment claims are at a 44 year low...
As you say - leading indicator.
I'm not upset. I'm actually rooting for a repeat of 2001 and 2008. Nothing nicer than buying a Trumpkin's home at auction
You mean the ones that bought stock after Trump got elected and are living the good life now? Yeah I guess they might be selling the house for a hefty profit and move into something larger, probably not at Christies though... not that you could afford anything a Trump supporter would deign to sell you.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Labor indicators are much more volatile than others, but the signals are highly mixed because of major contrarian macro-economic things the Fed undertook post 2008 - QE, QE2, QE ad-infinadum. This is a little like the S&L bust in the mid 80s but in reverse. Instead of a giant drain on available cash & capital for large businesses, instead we've essentially hollowed out the entire capital market for the small businesses. As the Fed increased QE to pump in "liquidity" it was making sole proprieterships harder to run as capital often will flow to the lowest risk with stable returns.
Look at the housing market - growth has not been in single-family dwellings, instead lots of capital has gone into new multi-tennant dwellings and high-end. Both of these are now going to be hit hard by the tax changes. High end housing is being slapped by the SALT and mortgage changes, while leased properties depend on a large supply of families without sufficient capital to purchase a starter property.
On the corporate front, if you look at where large-cap firms have spent their money up till now it has been quite sparse on the capital expenditure front, lots of stock buy-backs and such meant to goose share prices in absence of revenue and income growth. Aside from oil, very little of the hoarded cash and injected cash from the fed was spent on re-tooling and factory upgrades (domestic US that is). Now we're seeing countless announcements of re-tooling, and even surprisingly a number of factory moves _ON_ shore such as the Mazda plant in the southeast and claimed moves of auto production lines from Mexico back to Detroit! That's not possible unless there's capital ready to spend on these investments and the companies think they'll get that money back from revenue.
If you want to know when (not if) the bubble will pop, don't look at bitcoin and Dow Jones Industrials - look at their capital expenditures, as soon as that starts to dry up either we'll see a big market contraction, or the in-flow of capital will have flowed to the workers and personal spending will have caught up. Like we're at least a year out from the next contraction, or it could be 2-3 years before we see the economy get tired of the growth and build up enough errors to start shrinking again.
20,000 jobs is pretty skinny for 350 billion "contributed" to the economy.
Even if all 20,000 of those people are paid $100,000/year, their pay would be only 2 of the 350 billion, or just over half of 1%.
A lot of money will be going somewhere, but probably not to workers.
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Companies have been re-branding existing expansions as the result of Dear Leader since election day.
Why should I now believe this expansion happened because of Trump or the tax law? It's not like Apple was previously short of cash or didn't need to expand their workforce.
I stole this Sig
... upon his turban and predicts:
Swami Anderson knows all, tells all
Suppose you were an idiot and suppose you were a member of Congress
"So raise taxes to 99%. No businesses would be affected" That is the working economic theory. Have you ever taken an economics class? The intersection of supply and demand curves are not impacted by a profit tax, only a sales tax.
Ah, they will start paying taxes!
-- Cheers!
With all that money coming home to roost due to tax "reform," won't the burgeoning money supply lead to rapid inflation? Or is there something I'm overlooking?
"I'm so moist I'm sticking to the leather." -Kermit the Frog on The Late Late Show
Why not? We had the highest marginal rate, and one of the highest average and effective rates in the G20. Our biggest competitors - Germany, China, France, India - all enjoyed much lower marginal average, and effective corporate tax rates. Why shouldn't we be more in-line with our competition?
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
"There are a few factors."
There's only one.
Trump allows them to pay only 8% taxes on the hundreds of billions they bunkered offshore and they'll distribute that as tax-free dividends to their shareholders.
If a project costs 1 billion but generates 11 billion revenue, now the company gets to keep 79% instead of 65%
Yes that is correct, taxes are taxes on profits.
If that project generated 1 billion in revenue they could still keep 0 profit.
Yes that is also correct, etc.
The result is that ZERO new business opportunities are now profitable.
That's pretty speedy! Correct to utterly wrong in under a second.
Keeping more of profit they do earn means a company has more income to spend on R&D for new product. That is one way.
Furthermore you overlook that companies getting to keep more of the profit they earn, means that they can reduce margin to offer cheaper products while still making more overall than they were before. That in turn means that parts and materials may fall in price for other companies, like the one that was just breaking even, so suddenly that product that was making zero profit is now turning a small profit. HUH!
Then of course it follows that parts that were too expensive to make a product profitable before may now be reduced in price enough that new products can be made at a profit (or at least not much of a loss).
You portray yet another myth of conservative "economics"
I portray simply "economics", a subject you apparently know nothing about beyond some slim surface understanding, without even considering second-order effects.
I think though your more basic problem is not that you don't understand economics (or history for that matter), it's more a lack of imagination and planning. My guess is you've never actually run a business...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
So they're going to create tech jobs in a country that has been so chronically short on qualified tech workers, that they've had to import workers and open offices in other countries. I'll bet that a significant amount of those new jobs will go unfilled, or cause currently-filled jobs (either at Apple or other companies) to become vacant, depending on how many of those new jobs will require technical skills. And the politicians and media will fall for it. Unbelievable.
You're missing the part where the risk-adjusted returns on investment need to be higher than alternative potential returns in order to attract money for an investment.
Instead of putting your money into a company where 99% of whatever you make will be taxed away, you'd put it into a company in another country doing something else, or invest it in municipal bonds, or loan it to the FED, or keep it in cash (because there is otherwise a risk you will lose your investment instead of making money on it), or just spend it on consumption (because why bother investing it for no return?). At a 99% tax rate on profits, the supply of investment money would vanish and go elsewhere.
So yeah, the economic theory on the matter is pretty clear, tax rates majorly impact investment supply. You're confused by not considering the impacts on supply. You only get supply when it's profitable (compared to other potential investments) for someone to supply something.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
were amassing all that money overseas?
This is like the airlines periodically announcing they are increasing space between seats because "they care about passenger comfort". Where was the concern for passenger comfort while they were making the spacing narrower?
SOS, different day...
Haha, but your logic means there is a floor below which reducing the tax rate no longer increases investment because there are no other alternatives that have a lower risk-adjusted return. In fact it may reduce investment (since less is needed for a fixed return) or artificially encourage overly risky investments. hmm... have we had some recent problems with overly risky investments? More generally, this is one of the problems with overly concentrated wealth -- the holders of the wealth cannot effectively manage it and it ends up being wasted. Wait, weren't we talking about a company that has so much cash on hand that they can't figure out what to do with it? They'd rather it sit offshore doing nothing than repatriate it and let some of it go back into the economy through the government.
Well done Mister President!
Apple bringing back some of their $$$ is a start, at least....
Ferret
Sic gorgiamus allos subjectatos nunc
Clearly, the potential for tax dollars getting pissed away is very high. Depending on which side of the political fence you're on, money gets pissed away on lousy emergency management software, poorly trained personnel, and passwords written on Post-It notes OR you get a wall. People should be happy that Apple is spending it instead of a government.
When they say the money was kept "overseas" and now they're "bringing it to the US", that doesn't mean what you think it does. In fact that "overseas" money was being kept in bank accounts in New York and managed by an Apple subsidiary in Reno. It's only "overseas" in a completely fictional sense invented by accountants. No new money is going to be entering the US. There won't be any investment boom. The money's already here and they've already been investing it. Now congress has given them a huge tax cut, so to say thank you they're pretending it will magically create jobs. They have to pretend it will somehow help regular people, not just their shareholders.
"I'm too busy to research this and form an educated opinion, but I do have time to tell everyone my uninformed opinion."
students have been routinely forced to work for Apple during crunch time to get enough iPhones out.
I don't think we really want them to have better conditions either. I don't think we want them to be worse either, if by 'We' you mean consumers in first world nations. We're largely indifferent.
But as for their working conditions, there's no shortages of less than uplifting stories about them. Also, these are masses of Factory workers. They're primed for Unionization but they never seem to do much of it. You probably don't want to think about what the Chinese government does to keep that under wraps. Any more than you want to think about what things were like in America before Unions...
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You have to learn how to decode corporate-speak. For example, when a company says that the tax cut saving will go to a bonus, what will actually happen is that amount will be subtracted from people's total compensation. The $2500, or whatever, will go towards corporate profits, and most of it will end up in the pockets of the corporate executive class. It's how trickle down economics works.
Why is Snark Required?
We ref'd to that as "labor and burden." We used a multiplier like 2.5 to determine the total. So if an employee was paid 40k a year, labor and burden put their total cost as 100k. The multiplier would change depending on area of operation.
An effective "democracy" creates the illusion the people have a say in their government.
First off, your data is about entire tax load including individuals - we're talking corporate tax rates here. Do you have anything that says US corporate tax rates were lower than the OECD average? Second, take a look at your own data, the second page. The US is higher - or even - in just about every category EXCEPT for VAT. We don't have a national VAT, we have individual State/County/City sales taxes. And those aren't counted at all. When you look at total tax receipts across all jurisdictions, you'll find we're quite close as a whole. But hey - ignore a major source of funding for our various levels of Government and things look fabulous! Remove the VAT from the OECD calculations and you'll find the US is quite high, actually...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Because the only way Apple can 'contribute to the economy' is by directly creating jobs...
Perhaps they will build autonomous factorys and manufacture phones and laptops with minimal direct human involvement?
Ken
They will pay 8% on $35BN in previously generated profits, that's a one-time tax bill of what, almost $2.5BN this year, on top of this year's regular tax obligations.
Before you get all worked up over paying 'only' 8% taxes, ask yourself what is the actual rate you pay? Half of filers make no net income tax payment, their refunds and credits ensure the gov't pays them, not the other way around. But let's say you are among the 75M tax filers that actually pay income taxes, try a little exercise and take the total taxes withheld and paid and divide it by your salary plus bonuses and commissions (if any), then multiply by 100 to determine your actual tax rate. Don't tell me your last dollar tax rate, don't use your Adjusted Gross Income, actual earnings and actual tax payments.
I bet you pay less than 10% taxes on your actual income.
Ken
"When did dividends become 'tax-free'?" He asked the fellow that never collected a dividend in his life...
And they are repatriating $35BN, the rest is 'economic activity, like domestic manufacturing.
Ken
A big part of the projected/promised economic activity is from domestic manufacturing of their devices in the near future. Something Steve Jobs said would never happen.
Ken
Without QE, the banks certainly wouldn't have lent money to anyone with any amount of risk, as they would have had very slim capital adequacy to play with.