Apple CEO Tim Cook cites GOP tax reform as driver in $350B US investment

Posted:
in General Discussion edited January 17
Following Apple's announcement of plans to repatriate a chunk of its overseas cash to infuse some $350 billion into the U.S. economy over the next five years, CEO Tim Cook took part in an interview addressing the company's investment strategy, the iPhone slowdown controversy and more.




Speaking with ABC News' "World News Tonight with David Muir," Cook discussed the intricacies of Apple's forthcoming investment, which will incur a foreign tax bill of $38 billion.

Earlier on Wednesday, Apple foreshadowed a major shift in financial policy when it announced plans to repatriate a portion of its overseas cash hoard, a move that will pump $350 billion into the U.S. economy. That money will in part go toward a new campus and the generation of 20,000 jobs.

The company expects to pay $38 billion in taxes on the repatriated funds, a sum it says is the largest ever of its kind.

In a one-on-one with reporter Rebecca Jarvis, Cook explained that recent U.S. tax policy changes allowed for the huge capital commitment. Still, the executive insists that some changes, perhaps the grant of employee stock bonuses, would have been made "in any situation."

"Let me be clear, there are large parts of this that are a result of the tax reform, and there's large parts of this that we would have done in any situation," Cook said.

Jarvis suggested President Trump's tax bill is a "huge windfall" for Apple, a statement Cook did not directly refute.

"There are two parts of tax bill, there's a corporate piece and an individual piece," Cook explained. "I do believe the corporate tax side will result in job creation and a faster growing economy."

Just prior to the ABC News exclusive, Trump tweeted out a message taking credit for Apple's announced investments.

"I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA!" Trump wrote.



The conversation moved on to Apple's handling of iPhone battery issues. In 2016, Apple released an iOS update to deal with unexpected iPhone 6, 6s and SE shutdowns related to depleted battery cells. Release notes issued at the time did not specify how, exactly, the software fix handled the apparent problem, but users late last year discovered evidence that it throttled processor speeds.

Amid pressure from customers and media outlets, Apple in December confirmed iOS temporarily slows down processor-intensive tasks on iPhones with degraded batteries in an effort to keep those devices operating smoothly. The revelation has since spawned numerous class-action lawsuits and government inquiries into so-called planned obsolescence.

"When we did put it out, we did say what it was, but I don't think a lot of people were paying attention and maybe we should have been clearer, as well" Cook said. "And so we deeply apologize for anybody that thinks we had some other kind of motivation."

Finally, Jarvis asked whether Apple's decision to bring money back into the U.S. will result in a cheaper iPhone. Cook dismissed the idea, saying the "the phone costs what the innovation inside of it costs." She also confirmed with Cook that Apple's new campus will not be located in California or Texas, where the company already operates large facilities.
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Comments

  • Reply 1 of 32
    What bullshit.

    This is not "tax reform" on any level. This is a payday loan that YOU PEOPLE will need to pay back at 110% interest. Apple's effective tax rate is close to zero now and none of that is coming your way: you will not see an iMac Pro now starting at $1599 and $299 iPhones. Oh, and by the way: with the last two big tax cuts in the 80s and Bush, wages went NOWHERE. They did not rise. Hell, you all got a bigger tax cut in 2009 to offset the Great Recession, though most people, especially phony libertarian techie boyz don't believe they got one. Can't wait to for the parsing of paychecks in February to find that average $18.

    I look forward to the furrowed brows of Americans in a vain attempt to understand things when they start filing their 2018 taxes next year. You people have been ripped off.

    Good times.
    ronnjony0chasmmacky the mackymacxpressblastdoorrepressthis
  • Reply 2 of 32
    What bullshit.

    This is not "tax reform" on any level. This is a payday loan that YOU PEOPLE will need to pay back at 110% interest. Apple's effective tax rate is close to zero now and none of that is coming your way: you will not see an iMac Pro now starting at $1599 and $299 iPhones. Oh, and by the way: with the last two big tax cuts in the 80s and Bush, wages went NOWHERE. They did not rise. Hell, you all got a bigger tax cut in 2009 to offset the Great Recession, though most people, especially phony libertarian techie boyz don't believe they got one. Can't wait to for the parsing of paychecks in February to find that average $18.

    I look forward to the furrowed brows of Americans in a vain attempt to understand things when they start filing their 2018 taxes next year. You people have been ripped off.

    Good times.
    My wife and I didn’t believe we got one in 2009 because our paychecks got smaller (because of tax increases) total income of less than 50k so no we weren’t wealthy. Now I am the sole worker in the family and we make just over 50k. My paycheck will get bigger. Your bloviating doesn’t change that reality.
    edited January 17 JWSCanantksundaramSpamSandwichmarkspainmacseekerracerhomie3bluefire1beowulfschmidtpatchythepirate
  • Reply 3 of 32
    tipootipoo Posts: 788member
    They're making the right reparations, but...


    "When we did put it out, we did say what it was, but I don't think a lot of people were paying attention and maybe we should have been clearer as well"


    Maybe? And starting off with people weren't paying attention? That's some weasel wording there. I believe the motive was fine in preventing unexpected shutdowns, but they absolutely should have notified the user as soon as performance could be impacted, as many phone upgrades probably came when the user could have done with a battery swap.

    And when they put it out all they said was they addressed shutdown issues, not that tested performance could be cut nearly in half (as on my 6S, that was doubly frustrating as one that went out with the flawed batteries that degraded in months, now THAT should have had a user notification for sure to come in for a swap).
    muthuk_vanalingamrepressthis
  • Reply 4 of 32
    What bullshit.

    that is coming your way: you will not see an iMac Pro now starting at $1599 and $299 iPhones. 
    That is not for you. That is for the employees and for the business, you i***t!
    Who told you that tax cuts are there for the consumers? 

    This is a payday loan

    What an interesting way you view other people's money, dude. You take LESS from them, and view that as payday loan. That is some double speak right there. Ever tried to run for a seat in the senate?
    JWSCanantksundaramandrewj5790SpamSandwichmarkspainmacseekerentropyspatchythepiraterepressthis
  • Reply 5 of 32
    JWSCJWSC Posts: 77member
    This is all good.  It’s a win for everyone.
    andrewj5790markspainpatchythepirate
  • Reply 6 of 32
    What bullshit.

    This is not "tax reform" on any level. This is a payday loan that YOU PEOPLE will need to pay back at 110% interest. Apple's effective tax rate is close to zero now and none of that is coming your way: you will not see an iMac Pro now starting at $1599 and $299 iPhones. Oh, and by the way: with the last two big tax cuts in the 80s and Bush, wages went NOWHERE. They did not rise. Hell, you all got a bigger tax cut in 2009 to offset the Great Recession, though most people, especially phony libertarian techie boyz don't believe they got one. Can't wait to for the parsing of paychecks in February to find that average $18.

    I look forward to the furrowed brows of Americans in a vain attempt to understand things when they start filing their 2018 taxes next year. You people have been ripped off.

    Good times.
    Spare us this class warrior crap. The tax bill will reduce taxes for the VAST majority of Americans, regardless of income bracket. In fact, many who don’t pay taxes will larger tax credits thanks to higher child tax credits. There’s nothing political about it. These are simply facts. Anyone who is literate and curious can look that up, from multiple sources. 
    edited January 17 andrewj5790SpamSandwichmarkspainmacseekerentropyspatchythepirate
  • Reply 7 of 32
    Jeez, thanks Tim.  But ya know ... we only ever wanted a few simple things.  A medium-cost desktop mac with a decent GPU.  A MacBook Air with a Retina display.   512GB and 1TB standard configurations.  We've had enough of your Up-charge Fun House.

    It amazes me just how different Steve Jobs was from Tim Cook.  One is a visionary, the other ... a corporate bean counter. 
  • Reply 8 of 32
    Big win for all Americans and a big, big win for this administration and Congress.
    markspainmacseekeranton zuykov
  • Reply 9 of 32
    >> It amazes me just how different Steve Jobs was from Tim Cook.  One is a visionary, the other ... a corporate bean counter.  <<

    Fortunately for Apple, they have a lot of beans to count now. But if they continue to shoot themselves in the foot, as with the new version of iTunes, that denies users the ability to arrange app icons on the iPhone, and a few other moronic moves, one wonders how long the Apple candle will burn. 

  • Reply 10 of 32
    I was wondering what Apple's response to the new Tax Bill would be! This is great news for Apple and the whole country!

    Now I'm wondering where the new campus will be built—for God's sakes, NOT in California, I hope! What a sad "state of affairs" that is under wacko Gov. Brown!

    A campus for customer support, eh? Hmmmm, sounds good to me!

    Now I'm wondering what Adobe's response will be! If it's comparable to Apple's, maybe Adobe will invest similarly in customer support and give us back Americans who know a tad about their software and speak AMERICAN!!!
  • Reply 11 of 32
    chasmchasm Posts: 372member
    I think the point Elian was trying to make is that this tax cut — which the rest of you are correct in saying will be good for corporations and possibly good in the short term for the US in terms of some investment like what Apple is making — is almost entirely paid for on credit (ie funded by increasing the deficit, ie your kids are paying for it). The bill added/will add at least $1.5 trillion to the already-massive deficit. That is not a political viewpoint; it is a statement of fact. I haven’t finished doing the math yet, but my premiliminary figures suggest that Apple would actually save a few billion long-term if they just carried on they way they have for the past few years; borrowing to pay US costs and investing its foreign profits in overseas ventures/selling. I’m delighted that they are “repatriating” some of their massive foreign profits in the US, but it is actually costing them considerably more than if they didn’t; I guess they want to invest more heavily in the US (they’ve said this for years) and figured this was the best break they were ever going to get in the foreseeable, so the good publicity and higher stock price would make the loss (compared to not repatriating) worth it. Let’s also not kid ourselves about how MOST companies not named Apple will handle the windfalls they might get from this tax bill: MOST of it will go to executive bonuses and stock buybacks, just like it has every previous time the US corporate tax rate was lowered, or there was a temporary “tax holiday” for repatriation of foreign profits. Again, not a political statement; a statement of fact based on abundant historical record.
    mac_dogmuthuk_vanalingam
  • Reply 12 of 32
    Tim. Bit hurt with your support for the racist President and the Congress. Happy that they allowed to bring the money that really belongs to stockholders back into the country, Time for you to first give to who really deserves it - your stockholders.
  • Reply 13 of 32
    Thanks for acknowledging the good deeds of the GOP Mr Cook.

    SpamSandwichpatchythepirate
  • Reply 14 of 32
    So the effective corporate tax rate goes from perhaps three percent down to two, plus a lot of extra loopholes that produce little for anyone but the tax accountants and the largest shareholders. Real tax reform would have been lowering the rates but getting rid of the loopholes and the compliance costs, not adding to them. What we've just seen is a fraud, a one-time throwing of gasoline on a fire. And yes, pretty much any decent economist at this point will tell you, indeed explain quite clearly, that the economy is not going anywhere with this self-serving, lobbyist-bought excuse for tax reform. If you want to see what's going to happen, basically they copied Kansas's "reform" which has led to an economic lost decade in that state and huge cuts in public services and eventually businesses leaving the state because schools and roads are so bad.
    muthuk_vanalingamredgeminipa
  • Reply 15 of 32
    chasm said:
    I think the point Elian was trying to make is that this tax cut — which the rest of you are correct in saying will be good for corporations and possibly good in the short term for the US in terms of some investment like what Apple is making — is almost entirely paid for on credit (ie funded by increasing the deficit, ie your kids are paying for it). The bill added/will add at least $1.5 trillion to the already-massive deficit. That is not a political viewpoint; it is a statement of fact. I haven’t finished doing the math yet, but my premiliminary figures suggest that Apple would actually save a few billion long-term if they just carried on they way they have for the past few years; borrowing to pay US costs and investing its foreign profits in overseas ventures/selling. I’m delighted that they are “repatriating” some of their massive foreign profits in the US, but it is actually costing them considerably more than if they didn’t; I guess they want to invest more heavily in the US (they’ve said this for years) and figured this was the best break they were ever going to get in the foreseeable, so the good publicity and higher stock price would make the loss (compared to not repatriating) worth it. Let’s also not kid ourselves about how MOST companies not named Apple will handle the windfalls they might get from this tax bill: MOST of it will go to executive bonuses and stock buybacks, just like it has every previous time the US corporate tax rate was lowered, or there was a temporary “tax holiday” for repatriation of foreign profits. Again, not a political statement; a statement of fact based on abundant historical record.
    You obviously don't know what you are talking about. First, the tax bill will bring "foreign profits" back to the U.S. forever as they can't be sheltered like that anymore. Second, the way to lessen our national debt is to GROW the economy. The U.S. will have more people pulling the cart instead of riding in the cart. Every person that now gets a job and gets off social assistance will become a taxpayer instead and help our country. So yes, former President Obama, Trump has a magic wand - it is called actual business experience versus just reading about business.
    SpamSandwichpatchythepirate
  • Reply 16 of 32
    Jeez, thanks Tim.  But ya know ... we only ever wanted a few simple things.  A medium-cost desktop mac with a decent GPU.  A MacBook Air with a Retina display.   512GB and 1TB standard configurations.  We've had enough of your Up-charge Fun House.

    It amazes me just how different Steve Jobs was from Tim Cook.  One is a visionary, the other ... a corporate bean counter. 

    What? No MacMini demand?
  • Reply 17 of 32
    Fabulous tax bill. Companies bringing manufacturing and jobs back to America, our country now more competitive tax wise, the record stock market and its impact on IRA's and other savings/pension plans, handing out bonuses to workers, and---what a concept---more money in your paycheck starting next month.
    Love them or hate them, this was a big win for the Republican Party and Trump. 
    SpamSandwichpatchythepirate
  • Reply 18 of 32
    I might be wrong as im not an intellectual type. If this tax cut was not made then none of this $350 billion dollars would not be coming into the US so that $38 billion from apple going into your economy would not happen. If this creates jobs then these new employees will help pay the bill PLUS spend their earnings on other stuff helping create new jobs, again helping pay this bill. when your children grow up this deficit should be clear. As I said im just a simpleton so might be wrong. 

    Gary. 


    PS I was good at monopoly ;)
    edited January 18 SpamSandwichpatchythepirate
  • Reply 19 of 32
    nhtnht Posts: 4,005member
    crapday said:
    I might be wrong as im not an intellectual type. If this tax cut was not made then none of this $350 billion dollars would not be coming into the US so that $38 billion from apple going into your economy would not happen. If this creates jobs then these new employees will help pay the bill PLUS spend their earnings on other stuff helping create new jobs, again helping pay this bill. when your children grow up this deficit should be clear. As I said im just a simpleton so might be wrong. 

    Gary. 

    PS I was good at monopoly ;)
    The issue being argued is whether the increase in growth will offset the increase in debt.  

    The increase in debt is already known but historically the assumed increase in growth has fallen short but by the time folks can prove that, many of the folks that voted for the bill (either D or R) are out of office or simply hope that either no one understands or will believe that they didnt know it would turn out this way.

    The difference, in many ways, is like investors looking for profit in the near term and companies structuring for near term profit to make them happy as opposed to looking at the long term and making those folks unhappy with more tepid near term growth.

    As a deficit hawk and fiscal conservative this bill seems a lot more like the former (near term thinking) vs the latter (long term thinking).  

    It it would have been better to have cut spending to go along with cutting income but that would result in slower growth which looks bad and is painful.  The party has really abandoned long term thinking on almost every front.  Eventually that will bite us on the ass but nobody cares.  They only care about the next election cycle which has always been true but it’s really bad and really obvious now.
    gatorguyredgeminipaCurtisHight
  • Reply 20 of 32
    macxpressmacxpress Posts: 3,864member
    Big win for all Americans and a big, big win for this administration and Congress.
    Yeah Trump had a lot of do with it. /s All he did was sign the bill. I could have done that, but I wouldn't have because its a bad deal in the long run. This will be short term gain for long term pain. You can argue the other way, but we'll see in the end. Of course by then, someone else will be President and you can just blame them instead which is what typically happens. People blamed Obama for things Bush did and people blamed Bush for things Clinton did. They see today, and forget about yesterday. 
    redgeminipa
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