Apple To Use Foreign Profits To Fund US Jobs, Manufacturing

Donald Trump Tim Cook
Apple To Use Foreign Profits To Fund US Jobs, Manufacturing
Author

18 January, 2018

The company, which has faced global criticism for its tax evasion policies, also said it would spend $30bn in the United States over the next five years, creating 20,000 new jobs. Apple said it expects to invest more than $30 billion in capital expenditures in the US over the next five years and create more than 20,000 new jobs.

The new campus is part of a larger effort from Apple to contribute more money to the USA economy as it repatriates, or brings home, overseas cash.

Apple said it will increase its local manufacturing fund, announced a year ago, from $1bn to $5bn, indicating that it will be sourcing more components for its products domestically.

However, changes in the law exempts US corporations from most taxes on foreign profits going forward, and specifies that companies pay a one-time mandatory tax of 15.5 percent on cash and cash equivalents on profits now held overseas, according to Reuters. That means the new positions created by Apple are likely to have a more significant political impact than its $38bn tax payment, according to Erik Gordon, a professor at the University of Michigan's Ross School of Business.

Apple's new investments add to the company's current pace of spending with domestic suppliers and manufacturers, estimated at $55 billion in 2018.

Apple's offshore cash reserve stands at just over $250 billion, based on the company's Form 10-K filing for the fiscal year which ended September 30.

Additionally, Apple, Inc. projects that it will contribute an additional $38 billion in taxes on repatriated foreign income in compliance with the revised tax law.

The economic contribution will not include tax payments, the release said, nor will it include tax revenues from products sales or employee wages.

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Apple already employs 84,000 people in all 50 states.

Tim Cook told lawmakers critical of how Apple didn't repatriate its overseas profits that his company followed the law.

Roughly $10 billion of the money will go to U.S. data centers.

Apple has faced repeated criticism from U.S. lawmakers for not making more of its products, such as the iPhone, the iPad and Mac computers, in the United States.

The company's new Apple campus - separate from its Cupertino, Calif., headquarters - will initially house technical customer support.

In a press release Wednesday, the Cupertino, Calif. -based company announced a new set of investments to build on its commitment to support the USA economy and its workforce.

Apple will also invest in teaching students to code and programs focused on STEAM. Walmart, for instance, said it was giving bonuses up to $1,000, but the highest bonuses only went to employees who worked with the company for 20 years or more.


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