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Apple Gives Employees $2,500 Bonuses After New Tax Law (bloomberg.com)
Apple told employees that it's issuing a bonus of $2,500 of restricted stock units, following the introduction of the new U.S. tax law. "The iPhone maker will begin issuing grants to most employees worldwide in the coming months," reports Bloomberg. Apple also announced today that it would bring back most of its cash from overseas and spend $30 billion in the U.S. over the next five years. From the report: Apple confirmed the bonuses in response to a Bloomberg inquiry Wednesday. The Cupertino, California-based company joins a growing list of American businesses that have celebrated the introduction of corporate-friendly tax law with one-time bonuses for staff. AT&T, Comcast, JetBlue, and Wal-Mart also said they were giving bonuses.
Can any corporate finance experts explain why companies would do this? Should we buy that they're just being generous/trying to foster goodwill?
The combined income of the employees walmart has laid off since that announcement substantially dwarfs the "bonus" offered. The "bonus" was to people who had worked for Walmart for at least 20 years, btw. A pretty sad group.
The full $1K was for people that had worked there 20 year. People who had worked there for fewer years received a lesser bonus but still got something. I think 2 years was the minimum. And by the way, Walmart would have laid off those people either way.
There are a million reasons I can think of.
If all you can do is ascribe selfish reasons to any action, then here is one for you - with some many companies having more money to spend, there were be a lot more poaching of workers going on, and companies are trying to head defection off at the pass by fostering goodwill among employees.
But again only for absolutely selfish reasons, could not be they are just passing along some good fortune to those that helped them get where they are.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Obviously, a zero percent income tax rate will result in zero income tax revenue. Just as obviously, a 100% tax rate (the government takes your ENTIRE paycheck) will result in roughly zero tax revenue - most people won't work a job if they don't get to take home a paycheck. Also companies wouldn't have any reason to.pay more than minimum wage - employees don't demand more because they don't get any of it anyway.
So we can see that tax rates too low result in little or no revenue, and we can see that tax rates too high result in little or no revenue. That's obvious even without understanding the basics of economics, without even knowing the difference between microeconomics and macroeconomics, for example.
If the current tax rate is 80%, that hurts revenue and reducing the tax rate to 70% will increase revenue. If it's at 2%, increasing the rate to 10% will increase revenue. So what we can see, without even reading Chapter 1 of Economics 101 is that anyone who says "increasing tax rates increases revenue" is an idiot, and anyone who says "decreasing tax rates increases revenue" is similarly clueless. There is an optimal rate, not near 100% and not near 0%, that maximizes revenue. Raising rates above the optimal rate hurts revenue, reducing them below the optimal rate reduces revenue.
Also, complex tax laws create "compliance costs". Small businesses file taxes about sixteen times per year - quarterly federal returns, quarterly sales tax returns, quarterly unemployment tax returns, annual business personal property tax returns, etc. There is a real cost to all that, even of the business only owes $1, that's a lot of tax paperwork. (I've filed returns for 12 cents before - the cost / time to fill them out was much greater than 12 cents, so the current situation is a significant net loss for the economy.)
Corporate tax rates follow the same reasoning. If you taxed them at 100%, nobody would invest their savings into starting or growing any companies, since they can't make money. The economy would come to a halt and there would be no revenue (and nearly 100% unemployment). On the other hand, with a 0% corporate tax, you have no revenue from corporate taxes, but higher savings and investment, much better returns from your 401k, lower unemployment, higher wages, etc. So again there is an optimum rate. Too high hurts revenue, and too low hurts revenue. Too high also hurts a lot of other things. Fortunately, corporate taxes have been around for many years, many different rates in many different countries, so economists and policy makers can see how each worked. Based on the data, most countries optimize their revenue by setting corporate tax rates at about half of what the US has had. A few countries have tried very high corporate tax rates. A corporate tax rate of nearly 100%, where the government takes all the profits, is called communism. The USSR tried that. China tried that for a while and reversed course before they ended up like the USSR.
So I read the linked article, and I couldn't help but notice that the only thing joining the tax law and Apple's bonuses was temporal proximity. The author conspicuously chooses to use words like "after" and "following the introduction of," assiduously avoiding the more concrete "because of." The author also doesn't attribute anything the company actually stated to the tax law, citing instead some phoney-baloney hogwash about "confidence in Apple’s future."
In fact, if you read the text of the email sent by Tim Cook to Apple employees, you don't see mention of tax policy anywhere--which is weird, seeing as Bloomberg puts "New Tax Law" right in the headline.
It's almost as if Bloomberg.com were blowing smoke up our collective asses and calling it an invigorating Goop.com vapor colonic.
Obliteracy: Words with explosions
Republican tax cuts are evil!. Millions will die. Even though the standard deduction doubles, those who make minimum wage will starve as the rich will laugh eating there bones!
Of course you could cite credible sources and prove your case.
Credile source #1
Among that group of employees, only those who have worked for Walmart for 20 years or more will get the full $1,000, Walmart told Business Insider.
Credible source #2
The bonuses will be determined by an employee's length of service. Those workers with more than 20 years of experience will qualify to receive the full $1,000. However, workers with less than two years of experience will receive $200, a Walmart spokesman told CNBC.
Credible source #3
A one-time bonus benefiting all eligible full and part-time hourly associates in the U.S. The amount of the bonus will be based on length of service, with associates with at least 20 years qualifying for $1,000. A discrete one-time charge will be taken in the fourth quarter of the current year to account for the bonus; qualification will be determined before the end of the month and payments will be paid as quickly as practical thereafter.
As to the difference between the income of those laid off and the bonuses, this article cites the bonuses will cost $400 million. This article says 9,400 people are being let go during the layoffs. Simple math shows $400 million/9,400 = 42,553. If we assume those being laid off made that much in salary and benefits, then after one year, the amount of money saved by laying off those people will dwarf the one-time bonus amount.
That's not true. Our corporate tax rates were about the same as Germany's and Japan's if you factor in loopholes actually used. Those are the two top-performing democracies in the world, besides US. If their rates are somehow "sub-optimal", it didn't hurt them enough to knock them from the top two positions.
Now, I'm not necessarily against lowering our corporate tax rates some, but we have to be mindful of the budget deficit. Fix that FIRST. And, GOP didn't have to lower personal tax rates for the rich. Their priorities are out of whack.
Table-ized A.I.
So lets look at your original statement here.
So far, every single company that has announced employee bonuses thanks to the tax bill has followed with an announcement of layoffs shortly afterward. In some cases, the dollar savings of the layoffs almost exactly matched the dollar cost of the bonuses.
Which is a pretty broad statement, leading to me to call bullshit, and asking you to cite your sources. What I get is 4 articles about 3 companies that have laid off employees while giving bonus to others. I also requested credible sources, I'm not sure that Vice qualifies but we'll let it slide.
Now then, you calm that in some cases the dollar savings by the layoffs almost exactly match the dollar cost of the bonus. Yet, in none of the articles do they give numbers for you to reach that conclusion. Vice tosses some numbers around but those seem to be just guesses. Vice tosses around a number like 4,000 but the real number seems to be closer to 700 in AT&T case. Plus the fact that Comcast is giving bonuses to the people it laid off clearly shows that your assessment is in error. So that part of your statement is wrong.
Now then. You state that every single company that has give an bonus as also announce a massive layoff. But yet SuperKendall has posted a link to over a 100 companies giving "Trump Bonus." So unless you can provide evidence showing each and everyone of those companies is having a massive layoff that part of your statement is false too.
So basically Bullshit was the correct call. Any questions?
I read at +2. If your post doesn't reach that level I will not see or respond to it.
More probably than not they're just trying to get all the EU profits they didn't pay any taxes on back home as quickly as possible on now after the EU knows about this after someone blew the whistle on their illegal and secret deal with the Irish.
"Why should I want to make anything up? Life's bad enough as it is without wanting to invent any more of it."
So you're a big company, and you don't want trouble from the government. Of course you're going to do something, if you can, to make yourself look good!
But notice how all these announcements are about bonuses, not pay raises. A bonus is just a one-time event, pay raises keep on giving, month after month. These companies aren't really putting their money where their mouth is, they just want to make a splash in the news.
Some of these corporations recognize that people are going to boot the GOP candidates out if the tax cuts don't "trickle down" as promised. And knowing full well that "trickle down" isn't the effect it's been sold to be, they are manually doing a little trickle down in order to keep the pitchforks at bay.
That something, is someone. Another user on slashdot who posted a link that refutes your bullshit too.
https://slashdot.org/comments....
There is a link to that post. Take note of the link in that post that clearly refutes your bullshit.
So far, all you've cited is something called a "SuperKendall" which I assume is some sort of sex toy for homosexual men..
I'm not what exactly you mean but this post though. It seems to make some kind of derogatory comment about homosexual men. Which if it does makes you one sorry excuse for a human being.
It also means we are done here. You clearly have no data to back up your clam. Therefor you are just as much full of shit as it is. In the future you should learn to make sure you can back up your bullshit because some of us won't baffled by it.
But most importantly if I was you I would work on my homophobic issues. I believe you can get physiological help for it. I would suggest you do so.
I read at +2. If your post doesn't reach that level I will not see or respond to it.
Yup, that will do it.
I read at +2. If your post doesn't reach that level I will not see or respond to it.
And they call that a bonus?
I'll bet the execs get unrestricted stock.
Same BS, different decade.
I was an engineer in the 90s and got stock options the day my company went public. The tee shirt I got on that day ended up worth more than the stock.
If it isn't cash, it's worthless. Don't accept this BS in lieu of money or even actual stock. It's a PR gimmick.