[News] Tim Cook announces $1 billion investment in ?advanced? US manufacturing

[StyM]

https://arstechnica.com/apple/2017/0...manufacturing/

Apple plans to create a $1 billion fund to invest in "advanced manufacturing" jobs in the United States. CEO Tim Cook made the announcement last night in a CNBC interview with Mad Money host Jim Cramer, and he says that Apple plans to announce its first investment later this month. Cook wants the new fund to create a "ripple effect" in the job market?he says that the manufacturing jobs created directly by the fund will also create service jobs needed to support them.

"Advanced manufacturing" is a bit vague, but generally speaking, it's an umbrella term that encompasses creating technologically advanced products or improving the processes by which those products are created. The announcement was accompanied by a new "job creation" page on Apple's site, which highlights the 2,000,000 jobs Apple directly and indirectly supports in the United States.

$1 billion is just a small fraction of the roughly $250 billion cash pile that Apple is sitting on, but the symbolism of the move is just as important as any jobs it might create. President Donald Trump's promises to shore up American manufacturing were a major component of his campaign, and he singled out Apple more than once, pledging to ?get Apple to start building their damn computers and things in this country, instead of in other countries.?

The complex web of benefits that keeps most of Apple's manufacturing in China makes that unlikely, but a $1 billion investment gives Apple something to point to if Trump brings manufacturing up again. Intel has taken a similar step, pledging recently to complete a factory project that was started during the Obama administration in 2011.

In return, Apple stands to benefit from Trump's proposed tax plan, which aims to lower the corporate tax rate to 15 percent (Apple projects that its tax rate for Q3 will be 25.5 percent under current law) and implementing a "one-time tax" on profits held overseas; about 93 percent of Apple's cash and liquid assets is held outside of the United States.

[AliG]

Or, you know, they could actually pay taxes.

$250B x 15% = $37.5B in education, infrastructure and health care funding - and that assume Trump actually does get the business rate lowered to 15% (which I doubt happens).

[StAndrew]

Or, you know, they could actually pay taxes.

$250B x 15% = $37.5B in education, infrastructure and health care funding - and that assume Trump actually does get the business rate lowered to 15% (which I doubt happens).

There is a discussion of a one time 10% reparation for off shore funding. IIRC, the amount total is $1.4B offshore tax dodging dollars. But yeah, I'm with you on tax overhaul; it needs to happen.

[madmaxx]

Good news but I'm curious what exactly they plan to do, there is no way they can compete with Chinese labour. I highly doubt any Americans are willing to work for the same wages, unless they pass the costs off to the consumers? $1500 iPhones incoming?

https://m.youtube.com/watch?v=5ItLIywwepY

After seeing this news and watching this video, I wonder if it's part of the reason they are moving to do away with overtime? Thought I saw something about them going after unions again as well? A nationwide minimum wage rate & strong unions would go a long way to 'making America great again'

Or, you know, they could actually pay taxes.

$250B x 15% = $37.5B in education, infrastructure and health care funding - and that assume Trump actually does get the business rate lowered to 15% (which I doubt happens).

Now why would they do that? What purpose do you think the middle class serves? Education, health care and infrastructure funding? Ya right, you don't need those things. What are you, a socialist? Build that wall and increase military spending, to many boogeymen in the world and in your closet coming to get you!

[AbortRetryFail?]

F Y I
(not trolling)

The last great "Repatriation of Overseas Profits For Jobs, Jobs, Jobs" was 2006/2007.

The tax rate: 5.25%

This period coincided/combined with the height of the BigCorpUSA stock option back-dating scandal (including Apple) to temporarily raise Federal tax revenues roughly $350b.

Still looking for those jobs, jobs, jobs ...

[xlink]

Or, you know, they could actually pay taxes.

$250B x 15% = $37.5B in education, infrastructure and health care funding - and that assume Trump actually does get the business rate lowered to 15% (which I doubt happens).

It's not that simple.
Most of the taxes owed are on "overseas profits". If apple were incorporated in Germany instead of the US, most of that tax bill simply wouldn't exist.


Most countries basically tax a company on the profit attributable to operations within that country at something like 20%

The US aims to tax a company based on ANY profit it has from anywhere in the world at something like 30% after dedications are accounted for - which results in taxes being paid twice, to the US and another country.

[AbortRetryFail?]

It's not that simple.
Most of the taxes owed are on "overseas profits". If apple were incorporated in Germany instead of the US, most of that tax bill simply wouldn't exist.


Most countries basically tax a company on the profit attributable to operations within that country at something like 20%

The US aims to tax a company based on ANY profit it has from anywhere in the world at something like 30% after dedications are accounted for - which results in taxes being paid twice, to the US and another country.

In the United States, overseas taxes paid are a dollar-for-dollar deduction 'above-the-line' on adjusted gross income reported to the IRS. Taxes are not "paid twice."

As far as "30%" tax rate .... that's bogus. The actual rate is likely half of that after deductions on average, and Apple is infamous for paying an actual corporate tax rate of less than 10%.

Of what are considered 'developed' western economies in the World (technically, 'OCED' countries), the United States ranks in the bottom third for corporate tax 'burden' ...



Actual 'Corporate Income Taxes' are less than 2% of GDP in the United States --- the above chart likely includes the matching FICA (employee) taxes for Social Security and Medicare.

Which IIRC, FICA employer taxes paid are fully deductible (at least for my LLC, they are --- can't speak to Apple). That is likely reflected in the above chart along with corporate income taxes.

I wish Apple (and the States) well on their Advanced Manufacturing endeavors, but this was obviously a 'puff piece' for a cable business news channel. AND not to belabor the fact, Apple has been caught being rather disingenuous with their claims of taxes paid in the United States, so it would be appropriate to call 'shens on their claims of an upcoming 25% future tax rate.

Which corporate taxes paid, if you were not aware, are deductible on your following years tax return ...

[xytrius]

From the Washington Post:

Unlike those firms, Apple's announcement was not a hiring promise; the company simply said that it was hoping to promote U.S. manufacturing with its new fund.

?We've talked to a company we're going to invest in already,? Cook said.

Apple intends to invest in programs that can train workers how to code, Cook added. But much of the money for this effort will be borrowed rather than drawn from its substantial cash reserves.

Labor economists say that restoring U.S. manufacturing jobs will be difficult at a time when automation is increasingly threatening to replace many workers. Businesses may move their factories back to the United States, but because American workers are still more expensive to employ than robots, those corporate decisions may not lead to an uptick in hiring.

The Post report also questions Cook:

?The U.S., over time, began to stop having as many vocational kind of skills,? Cook told ?60 Minutes? in 2015. ?I mean, you can take every tool and die maker in the United States and probably put them in a room that we?re currently sitting in. In China, you would have to have multiple football fields.?

Analysts predict that even highly specialized industries such as law or radiology may be shaken up by artificial intelligence. And the trend isn't just problematic for older workers; by 2030, more than a third of all U.S. jobs may be done by robots, according to a recent study by the consulting firm PricewaterhouseCoopers.

Source:
https://www.washingtonpost.com/news/...bs-in-the-u-s/

[drmrlordx]

F Y I
(not trolling)

The last great "Repatriation of Overseas Profits For Jobs, Jobs, Jobs" was 2006/2007.

The tax rate: 5.25%

This period coincided/combined with the height of the BigCorpUSA stock option back-dating scandal (including Apple) to temporarily raise Federal tax revenues roughly $350b.

Still looking for those jobs, jobs, jobs ...

Two points:

1). What's wrong with a stock buyback? The shareholders get some money, which they can spend as they see fit. There is potential for economic activity here
2). Sadly, most of what the rich/ultra-rich spend these days does not "trickle down" as much as it did even 30 years ago. The old Reagonomic system which once worked, does not work so well anymore. Often times, what we see are the rich buying products and services from other rich people.

As far as "30%" tax rate .... that's bogus. The actual rate is likely half of that after deductions on average, and Apple is infamous for paying an actual corporate tax rate of less than 10%.

You do realize that the "actual" rate paid would be much higher if US corporations wouldn't park assets overseas, right? That's a classic tax dodge. They do this specifically because the official US corporate tax rates are so high.

If US tax rates were as low as Ireland's, that loophole would simply close up. There would be no advantage to reporting income in another country, or anything of the sort. US corporations routinely "buy things" from foreign subsidiaries and then list the amount paid as an expense, to transfer income to some other country and report it there for tax purposes. Then the money never "comes home".

Or, you know, they could actually pay taxes.

$250B x 15% = $37.5B in education, infrastructure and health care funding - and that assume Trump actually does get the business rate lowered to 15% (which I doubt happens).

Who is to say any of the money sent to the Feds will go to help people? Or that it's even a good idea to give them money?

What Cook is probably looking at is mostly automated manufacturing in the US. The trick is to figure out how to work with/around US environmental regulations so that manufacturing can return here at a reasonable cost. China's labor rates are getting too high, anyway, which is why many Chinese/Taiwanese firms are moving manufacturing to places like Vietnam. My ASRock X370 Taichi was made in 'nam in a Foxconn factory.