“Apple, Capitalizing on New Tax Law, Plans to Bring Billions in Cash Back to U.S.” (nytimes) says that Apple is going to pay $38 billion in tax to the U.S. Treasury on money that it has been stuffing overseas. Here’s the confusing part to me:
Timothy D. Cook, Apple’s chief executive, said in a statement, “We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”
It makes sense that Apple is bringing the money in before the next Congress comes up with a new tax scheme that is less favorable. But why brag about the company’s “deep sense of responsibility”? It wasn’t quite deep enough to pay taxes at the old rates? But it is deep enough to pay some U.S. taxes at the new lower rates? Apple assumes that nobody will ask these (to me) obvious questions?
Maybe they can use some of the repatriated money to sit down with Honda and create a working version of Apple CarPlay?
Because he is speaking to the Americans who wouldn’t know to think about the past possibiliites.
Thank you President Trump. This is more than enough money to build the wall!
You already bought both products, why improve them further?
“Apple didn’t have a choice about this. Under the new tax bill, all overseas cash is subject to a one-time 15.5 percent tax whether Apple leaves it overseas or moves it to the United States.”
https://arstechnica.com/tech-policy/2018/01/apple-plans-to-pay-38-billion-in-us-taxes-to-bring-overseas-cash-home/
And we are reminded why companies will continue to stash cash overseas. Our government doesn’t have the willpower or sense to make it an ineffective practice. There will always, always be some point in the future when it will be cheaper to bring it back(like now, like the amnesty that came before it), and there will always, always be somewhere with lower rates to stash it.
I’m guessing the “deep sense of responsibility” is a response to this:
“The company has been under increasing pressure to make U.S. investments since the 2016 presidential campaign, when Trump targeted the iPhone maker for making products in Asian factories.”
https://www.reuters.com/article/us-apple-tax/apple-plans-new-u-s-campus-to-pay-38-billion-in-foreign-cash-taxes-idUSKBN1F62FJ
Phil,
Cook is a brazen phony. I wonder if WaPo or NYT will devout a thousand words to this story?? I kinda doubt it.
I like the “we” — as if the money were Cook’s, as opposed to the shareholders’, who entrusted it to Cook as a fiduciary not as a gift to hand out as gratuities.
Didn’t this overseas stuffing of cash started with Steve Jobs?
I wonder what Steve Jobs would have done now if he was still alive.
The “giving back”that Cook is referring to doesn’t seem to be in reference to the taxes paid. Rather, it’s about what Apple plans to do with the *rest* of the repatriated money *after* taxes are paid. Due to the new tax bill Apple is bringing back about $250 billion, paying $38 billion of it in taxes, and the question is what to do with the rest. Some will pay back loans or compensate employees or buy back stock (leading to more taxes paid in the future) but Apple also wants to boost their “good corporate citizen” image with the usual political nincompoops, so they are promising to fritter away a bunch of the returned money on stupid-but-popular programs such as a special separate “advanced technology research” program.
(and also, of course, taking credit for all the “jobs created” by 3rd-party apple developers)
It makes sense for Apple to do this for tax reasons obviously, but it’s also good for their brand by investing in the USA. Outsourcing to China is also expected to get more expensive in the future with rising labor costs.
No small amount of irony is that Tim Cook specifically, and Apple/SV in general are very left-leaning as a whole – and wouldn’t have advocated the tax bill, but are more than happy to take advantage of it once passed.