“For years, Apple CEO Tim Cook has called on Washington to make it less costly for his company to bring back the billions of dollars it holds overseas,” Seth Fiegerman writes for CNN. “Just in time for Christmas, Cook finally got his wish.”
“As part of the tax bill signed last week by President Trump, corporations like Apple will enjoy a repatriation tax rate of 15.5% for returning money to the U.S. from their overseas cash piles,” Fiegerman writes. “The new rate is higher than the ‘single digits’ amount Cook once asked Congress for in 2013, but it is nonetheless significantly below the previous repatriation tax rate of 35%… On an earnings call days after President Trump’s inauguration, Cook said any tax reform package that encouraged repatriation would be ‘very good for the country and good for Apple.'”
“Now Apple and Cook face a put up or shut up moment,” Fiegerman writes. “Will the world’s most valuable company continue to rely on the tax havens for which it has been criticized, or make good on returning the money to its home country? And if it does bring it back, who will really benefit?”
Read more in the full article here.
MacDailyNews Take: Apple will repatriate a massive percentage of overseas cash and shareholders will benefit most via buybacks and dividends.
“Bring it on home to me, yeah, yeah, yeah, bring yo sweet lucres on back…” Good.
Trickle down economics is a lie. Historically big companies use their tax breaks to buy back stocks or put in oversees accounts which does nothing to help the US economy as they are under no obligation to share profits with the workers; when they can borrow at 1% why would they ever repatriate? Also demand for products has not changed after the tax cut so why would any company open more factories or hire more workers? When the richest 1% get a tax cut they don’t go out and buy more iPhones; when the 99 percent get a living wage or a major tax cut they spend it which is 70 percent of the economy. The rich don’t create jobs, it’s the workers that create more demand and fuel the economy. This is economics 101.
you nailed it
The rich, middle class, and the poor live in a symbiotic relationship. Poor corporations don’t hire people, don’t buy expensive capital goods to expand their business (which provides good paying jobs), or invest heavily in research and development that also provides a lot of middle class jobs that sometimes takes years (or never) to recoup the cost.
For an economy to grow, you have to start with the rich because they have the capital and wealth that creates opportunities.
To pit one against the other underscores a lack of understanding of how our economy actually works and how capital movements responds to taxation and regulation.
Obama’s administration had the same idea you had – let’s try to transfer wealth from the rich to the middle class and it led to stagnation and poor growth, as corporations tried to shield earnings from what they felt were confiscatory tax rates and onerous regulations.
History has proven, time again, that when you try to penalize the rich and reward the little guy in the hopes of equality, you end up screwing the little guy.
But if you try to create equal opportunity instead of equal outcomes, you get more people entering the capitalist economy.
And that’s why no other system of government has done more to lift people out of poverty and provide for a high standard of living than capitalism. And don’t try to point to some tiny Scandinavian country that taxes you to death and you can live in your tiny house and drive your tiny car with a huge personal debt load but you get cradle to grave public services.
Their entire outlook on life is to pit class, race, religion and sexes against each other, because if those people have the facts instead of the anger and insecurity, why would they vote Democrat??
Jimmy is so far off the mark (demand hasn’t changed? In an expanding economy it will….gawd bless Libs are shortsighted) of economics there is no sense replying directly to him.
Pinkertons 36 Molly Mcquires 0
“as corporations tried to shield earnings from what they felt were confiscatory tax rates and onerous regulations”
You… ah, you DO realize that corporations will CONTINUE to shield earnings, yes? That’s how this thing works. There is NO company in existence that is thinking “oh, guess these tax rates are aok, no need to look for any more loopholes”.
It’s annoying when conservatives spout the same nonsensical ‘oh people will behave if we just do…’ that liberals have been known for.
The “rich,” or those with $$ invest their money. That’s how one typically gets wealthy. Those that save some of that money (shame on them) are also part of investing, as the banks use those savings when they make loans to people that want to buy high dollar items (ie., houses), or those that need a loan for an business investment. Often times those loans are for a business where people are hired to perform a service/create a product.
Good business are run by thinking people that prepare for lulls in product cycles and are always looking for new markets. Though the iPhone isn’t actually in a product lull, Apple knows that securing/developing new markets is business savvy…hence the giddiness that Tim experiences as “Services” are showing nice growth for the bottom line. So, Apple may not be building more iPh factories, but Apple is planning ahead for AppleWatch manufacturing needs. Sales are expected to double in ’18! Hmmm, maybe the AW will benefit from the influx of $$ from the tax cuts? Or maybe not! Tim, Phil and for sure Eddy, are planning on not doing anything with the money, except spending on vacations to places they’ve never been? Oh, I forgot, they’ve got a fiduciary responsibility to stockholders. Ok, so it’s the other people in the 1% crew that are going to hold their money and NOT buy a farkin iPh…just too expensive. Also, even though their wealth came because they invested their money, which involves employing people, they’ve decided they’ve had enough. Collectively, 99% of the 1%’ers have decided, “no-more.” “From now on, I’m keep’n it,” they all yell.
Jimmy, at little tip; you can’t have demand without a product, or service. Typically, it’s people with resources that take a chance, invest/spend and create a product that customers want. That’s were demand comes to play. People want it, people are hired to create it–workers and investor meet the demand via partnership and each gets more money in the process. Jimmy, I’m curious, have you ever been offered a job by a “poor” man?
It’s Marxism 101. Maybe you’d like living in Venezuela.
Trickle Down economics is math, not a lie. So tired of people playing politics with economics. Dozens of large companies, as a result of the tax cut, have already given $1k or more to employees.
What do companies do with more money?
A. To shareholders… ie, anyone with a retirement plan, likely has money in Apple, Google, a host of tech stocks and beyond. They gain wealth, so does your retirement plan. That’s trickle down, if not flood down in some cases. I invested $4500 in Apple around 1998 and their wealth allowed me to pay off my mortgage with money left over for my kids college education. Don’t give us crap about companies wealth doesn’t effect anyone else by Tim Cook. It has affected – in a positive ministry way, tens of millions of people.
B. The idea they are “not obligated” to do anything with their money if they choose not too mentality. The board and shareholders would have Cooks neck in a heartbeat, and who is it – Government angles” to tell companies what to do with their money? I don’t think so! Fascism be damned.
C. If you don’t like companies making more money, bringing back to the US, then you must not like the Government getting more revenue, because only companies that make a profit pay a dime in taxes. We should all want US comapamies being as profitable as they can as it will ensure larger taxe receipts to the feds and local governments, more expansion, more jobs, more opportunity, more liberty. Don’t like companies, then start your own like I did – this is America after all. No one owes you anything, certainly not Apple or the government or anyone.
“it will ensure larger taxe receipts to the feds and local governments”
You sound like a liberal. Why don’t you just raise everyone’s taxes if you love larger tax receipts so much!
Here’s some truth for you, it is a corporation’s job to pay as LITTLE in taxes as possible. That’s done in myriad ways, but the goal is always the same. As a corporation makes more, they figure out more ingenious ways to continue to pay less. You can’t seriously believe that a tax cut of n% is going to lead to n% of investment, do you? 🙂 Most American companies are already running lean and efficient and have a LRBP of at least 5 years… do you REALLY expect a corporation to build a new unplanned factory out of the goodness of their hearts (it doesn’t make financial sense, but lets just give the folks jobs, eh!)? Do you think everyone’s gonna get a 10% raise (no one deserves a raise, but, hey, we just got a tax break, let’s pass it along!)? It just sounds like so much liberal well-wishing, makes you wonder what happened to common sense.
Apple doesn’t have to follow the egregious behaviors of other companies. Apple leads the corporate world in social justice. Apple will do nothing self-serving, right? Apple will invest in itself and its employees, right? Apple will show to everyone that it will do the right and moral thing, right?
Bernie is your mentor, Jimmy?
The dmocrats and liberals and dnc rely on people like you who simply do not understand economics 101 and are otherwise takers not makers. It’s painful to hear.
So please explain trickle up economics. Because the loser on food stamps never hired me or invented something I bought.
It’s a dog eat dog world. I teach my kids to eat your snowflake kids alive. ((Figuratively speaking only cuz there are better things to eat)
Regardless I’m sure you believe the rich don’t pay their fair share and you offer to pay extra taxes and you fully understand that the lower earning 50% don’t even pay taxes. I guarantee you’re a democrat. A Liberal and fool who hates Trump.
How about hiring some folks that can make more than one product in a year. That would be a start. Screw the share buybacks Apple.
Anyone who says trickle-down is a lie is blind. I see it working all around me all the time.
I’m already seeing a boost in personal income due to the Trump tax reform. Clients are looking at using reduced taxes to invest in new computers, software development, and infrastructure improvements.
In turn, I will hire additional people to assist with projects.
When the supply side of my personal income slows down, I stop paying for things like housekeeping, gardening, and so on. When the amount of money I make increases, the more I spend on other goods and services. It’s not rocket science.
I’m not even remotely what you would call rich.
“…The GOP tax bill has had an immediate effect on America after several businesses decided to pay their employees more and pour money into their communities as a direct result of paying less in taxes.
The latest company to make a huge change as a result of the tax bill is Comcast.
In a shocking announcement Wednesday, Comcast stated it would be investing over $50 billion into infrastructure over the next five years to “radically improve and extend our broadband plant and capacity, and our television, film and theme park offerings.”
On top of that, the company is awarding $1,000 bonuses to more than 100,000 employees.
AT&T also made an announcement it would be paying $1,000 bonuses to more than 200,000 of its U.S. employees as a direct result of the tax bill.
Boeing CEO Dennis Muilenburg announced the company would be investing a total of $300 million to charity, training and education, and infrastructure:
Fifth Third Bancorp raised its hourly wage for employees to $15 and committed to distributing $1,000 bonuses to 13,500 employees:
Wells Fargo announced a raise for its employees at $15 per hour and also decided to donate $400 million to community and nonprofit organizations in 2018:
On top of all of those, CVS pledged to hire 3,000 workers, and FedEx also announced it would add employees, according to Fox News.”
The Trump effect.
———————————–
Toward the end of the Obama administration, black people were shooting down innocent cops in the street.
The Obama Effect.
Anyone who down voted your comment or will down vote your comment is so entrenched, it is ‘casting perls…..’
Even stock buy backs are trickle down. People across the entire spectrum (excepting the poverty class) own stock, either directly or in retirement plans, etc.
You are getting thru to the rest of us so keep adding logic to your posts. You won’t convince anyone who just votes you down because you disagree.
Apple’s stock buy backs have done nothing see Amazon or Google or Netflix for share price.
To compare companies, you would have to divide the companies earnings, etc. by their what their share price would be if they hadn’t bought back shares. Buy backs do nothing for the bottom line, but the increase the price per share. Apple’s individual shares would be much lower priced but for the buy backs.
Even with that mountain of repatriated cash, Apple shareholders are only going to eat the crumbs all the FANG stocks drop from their full table. Amazon with a P/E of 300 and Apple can barely manage a P/E of 19. Whatever Apple is doing wrong, I hope that repatriated cash can correct that problem. Every major tech company’s P/E makes Apple look like a trash-manufacturing company. I don’t really understand it and I probably never will. A company’s fundamentals apparently have nothing to do with a company’s overall value and I’m too dense to see the reasons why.
Apple has been proudly going out of business for over 30 years now …just read the financial news headlines …
/s
the problem with this article and a whole host of others dealing with Apple’s overseas cash is that there is the sly underhanded suggestion (or at least omission) to make it sound as if Apple is hiding it’s USA profits overseas in ‘tax heavens’ and thus cheating the US public (this common ‘evil apple’ slant is to sell articles)
truth is Apple pays all the taxes it makes on USA sales in USA and is the largest USA tax payer. The overseas cash is from overseas profits of which Apple has already paid foreign taxes (Apple using all legal tax breaks in EU etc is a different issue I won’t discussed here). Apple makes two thirds of it’s profits overseas, many USA companies like Burger King have relocated their HQ to other countries for cheaper taxes, Apple hasn’t.
well said Davewrite!
If the news media has labeled Apple as a tax-avoiding company, then it might as well be true. I’ve never heard the news media defending Apple’s position so, mostly everyone out there believes Apple’s management is crooked as a three-dollar bill. Apple is the company the news media focuses on and we almost never hear about other companies doing the same thing Apple is doing. Apple always ends up being the chief patsy and that’s how it is for Apple shareholders to take the beating. All the FANG stocks are saints and Apple is the only sinner. It totally sux.
“(Apple using all legal tax breaks in EU etc is a different issue I won’t discussed here)”
Right…and nobody wants to discuss it unfortunately. Those ‘off-shoring’ tax breaks have allowed Apple to pay only 0.02% corporation tax on $170B of profits made in the EU. So while the US cheerleaders celebrate, remember…it’s on the backs of money that should have rightfully been recycled into the countries where it was generated.
It’s interesting that a section of xenophobic Americans celebrate when the ‘deeply globalized corporation they love to despise’ benefits their own back pocket by virtue of being ‘global’. No thoughts being spared for the folks who gave them the windfall, albeit unwillingly, but mind-numbing hypocrisy is ok right?
Where is the condemnation of Soros inspired globalization now?
It’s a new era of corporate globalization that conveniently allows political hypocrisy to be swept under a cheerleading carpet of convenience. Because “MONEY”
#irony_desert
Special repatriation dividend has my vote
buybacks and dividends? i was assured that they would be bringing back iPhone production from China with all those billions!
I’m not sure who assured you such a thing, but you shouldn’t listen to them.
for retirement…people like Jimmy and like-minded (Rosco) think their ticket to freedom/retirement/financial well-being is through the gifts, or laws mandating the wealthy share their assets. It’s no wonder that this mindset has infiltrated the culture and approximately $5000 marks the median amount people have for retirement! Like Jimmy, many ascribe to Econ 007…always elusive & mysterious.