So Apple and the others who kept their money abroad (at least on paper) have now successfully lobbied themselves into the same tax bracket as people earning roughly 9k to 38k per year.
TechGuy678, would you rather have that, or have 0%? Decide. There is no other option saying 50% or 100% (because it effectively means - ZERO percent).
They "pay", nearly nothing... I like Apple but come on, this kind of article never turns right (surprised they even opened it up to comment) and this is the only comment I'm going to make in this thread.
Apple already paid the foreign tax on this money. So unless I'm wrong
Yes you were wrong. Apple has long held 10's of billions as un-taxed revenues and adding to that amount each and every quarter, which is why they are now claiming they'll pony up $38B in taxes based on a 15% corporate tax rate rather than the previous standard 35%, In practice the rate has nearly always been a much smaller percentage anyway. Does any company actually pay 35% of their profits in corporate taxes? Except for the most clueless I seriously doubt it.
If the foreign tax was 0%, then Apple paid the foreign tax on it. But Apple did paid what foreign taxes that was legally due, at the time. It could be 0% on part of it, as low as 2% for some of it, around 10% for part of it and over 15% for part of it. But I'm guessing that the average percent tax paid on all their foreign profits is closer to 10% than 0. 10% that they would have gotten a tax credit for, when the reapiation rate was going to be 35%. But they get no such tax credit now that it's 15%. (unless I'm wrong)
And I like how you made it seem that I was saying that I may be wrong about Apple paying the tax on their foreign profits, when it is perfect clear that I meant I might be wrong about Apple not being able to deduct the foreign taxes they already paid, from the 15% reapiation rate, with this new tax plan. Nice going.
And yes, US corporations paid the 35% corporate tax rate on their profits, over a certain amount. (before 2018 anyways) Now their effective tax rate might not be close to 35% as they do get to legally deduct certain line items from their net income and may have gotten certain tax credits. But what's left over, after deductions and credits, is taxed at 35%. It's not the corporate tax rate that is reduced, its the amount that is actually declared profit that gets reduced. Thus it's the effective tax rate that is less than 35%, in nearly all cases. Of, course I'm talking about normal tax filings under normal circumstances and not about any tax break on the corporate rate that the government might grant them.
With Apple US profits, they paid an effective tax rate of about 26%. That is not the same as only paying a 26% corporate tax rate on their profits. Like everyone that itemized (before this new tax bill) Apple got to deduct line items like the State taxes they paid and maybe got a tax credit for being "Green". This reduces the amount of Federal corporate taxes they have to pay, it did not reduce the corporate tax rate of 35% on what they finally declared as profit.
None of this would’ve happened unless the tax plan had been passed. 👍
You seriously believe Cook just planned a new head quarters and 20,000 jobs in the weeks after the tax plan was passed? Yeah no.
The proposals for US companies overseas funds repatriation stretched back to 2015 (if I'm not mistaken), so surely a company as large as Apple would've had plans in place far in advance. However, Cook directly credited the GOP tax plan, so...
None of this would’ve happened unless the tax plan had been passed. 👍
You seriously believe Cook just planned a new head quarters and 20,000 jobs in the weeks after the tax plan was passed? Yeah no.
Of course Apple already had the plan to build this new HD and create all those jobs. Apple knew that Congress would never approve any tax holiday on foreign profits unless the money reapiated was used to create jobs and boost the US economy. So Apple had to have a plan in place, if they were going to lobby Congress for such a tax holiday. And they've been lobbying. And now, that Apple (with this new tax bill), can use foreign profits at a reduced tax rate, they can go ahead with their plan. Maybe years ahead of schedule.
And let's not forget the $2500 in restricted stocks that Apple will grant to all their employees, not just managers and executives. I'm sure that was also in the works, but it would have never happened unless Apple got some sort of tax reduction for bringing in foreign profits to use it for such a plan.
As an AAPL invested, I hope Apple also has a plan to boost the dividend this March, to a least about the 2% that MSFT, INTL and others pays, instead of the usual 10% increase. Going to have to wait till this coming earning report or maybe the next, for that news.
None of this would’ve happened unless the tax plan had been passed. 👍
You seriously believe Cook just planned a new head quarters and 20,000 jobs in the weeks after the tax plan was passed? Yeah no.
The proposals for US companies overseas funds repatriation stretched back to 2015 (if I'm not mistaken), so surely a company as large as Apple would've had plans in place far in advance. However, Cook directly credited the GOP tax plan, so...
Part of what that $350 billion represents is, no doubt, attributable to the recent tax law changes. For starters, the new tax bill of $38 billion is included in that total and Apple wouldn't be paying that if it weren't for those tax law changes. With those changes, Apple has to pay that.
But if you look at the numbers (both those from Wednesday's announcement and some which Apple had previously reported), it becomes clear that the vast majority of the remaining $310 billion or so isn't the result of the tax law changes. In order to believe that it is, we have to believe that Apple otherwise (i.e. if the recent tax law changes hadn't happened) would have dramatically slowed its domestic spending and job creation (as compared to what it had been doing recently).
I'm happy to go into the numbers a little if you'd like.
For some reason the system won't let me edit my previous post, it keeps giving me the message: Body is 3 characters too short.
So here is the edit I was trying to make...
EDIT: I'd add some things I've already said elsewhere. I'm not trying to downplay the effects of the recent tax law changes. I'm generally supportive of them and think they'll have positive economic effects. I wish they'd have have gone further in cutting the corporate tax rate and in some other areas, but I think what was done with regard to corporate tax policy is better than not having done anything. I'm just being realistic in assessing the meaning of what Apple announced Wednesday. I suspect that the numbers it projected are quite conservative. I think it will turn out that domestic spending, capital expenditures, and job creation will be meaningfully higher over the next 5 years than what was projected, and that that will, in part, be fairly attributable to the recent tax law changes. But as it is, the numbers Apple projected don't suggest a large expansion in such spending and job creation.
The real question is what it would have been without the cut. I.e I laughed when he had the Intel CEO talking about the billions spent on the 5nm fab plant while standing next to Trump, while they planned that 5 years before and had to do it regardless of corporate taxes, just to compete.
This plan likely would have unfolded regardless of the tax reform bill (which will only pay for about 1/20th of this) -- but this should be an effective way to make Trump a fan.
Apple urged the previous administration to allow a "tax holiday" so they could repatriate these funds but it was refused. So this move is unquestionably the result of the recent tax bill.
None of this would’ve happened unless the tax plan had been passed. 👍
Winning.
From everything I've read on this the money was already earmarked to be paid for regular employees salaries, etc. None of it has anything to do with Trump in any way.
Apple urged the previous administration to allow a "tax holiday" so they could repatriate these funds but it was refused. So this move is unquestionably the result of the recent tax bill.
None of this would’ve happened unless the tax plan had been passed. 👍
Winning.
From everything I've read on this the money was already earmarked to be paid for regular employees salaries, etc. None of it has anything to do with Trump in any way.
That is patent nonsense and even Tim Cook acknowledged the tax reform as being PART of the reason.
Comments
And I like how you made it seem that I was saying that I may be wrong about Apple paying the tax on their foreign profits, when it is perfect clear that I meant I might be wrong about Apple not being able to deduct the foreign taxes they already paid, from the 15% reapiation rate, with this new tax plan. Nice going.
And yes, US corporations paid the 35% corporate tax rate on their profits, over a certain amount. (before 2018 anyways) Now their effective tax rate might not be close to 35% as they do get to legally deduct certain line items from their net income and may have gotten certain tax credits. But what's left over, after deductions and credits, is taxed at 35%. It's not the corporate tax rate that is reduced, its the amount that is actually declared profit that gets reduced. Thus it's the effective tax rate that is less than 35%, in nearly all cases. Of, course I'm talking about normal tax filings under normal circumstances and not about any tax break on the corporate rate that the government might grant them.
With Apple US profits, they paid an effective tax rate of about 26%. That is not the same as only paying a 26% corporate tax rate on their profits. Like everyone that itemized (before this new tax bill) Apple got to deduct line items like the State taxes they paid and maybe got a tax credit for being "Green". This reduces the amount of Federal corporate taxes they have to pay, it did not reduce the corporate tax rate of 35% on what they finally declared as profit.
Of course Apple already had the plan to build this new HD and create all those jobs. Apple knew that Congress would never approve any tax holiday on foreign profits unless the money reapiated was used to create jobs and boost the US economy. So Apple had to have a plan in place, if they were going to lobby Congress for such a tax holiday. And they've been lobbying. And now, that Apple (with this new tax bill), can use foreign profits at a reduced tax rate, they can go ahead with their plan. Maybe years ahead of schedule.
And let's not forget the $2500 in restricted stocks that Apple will grant to all their employees, not just managers and executives. I'm sure that was also in the works, but it would have never happened unless Apple got some sort of tax reduction for bringing in foreign profits to use it for such a plan.
As an AAPL invested, I hope Apple also has a plan to boost the dividend this March, to a least about the 2% that MSFT, INTL and others pays, instead of the usual 10% increase. Going to have to wait till this coming earning report or maybe the next, for that news.
But if you look at the numbers (both those from Wednesday's announcement and some which Apple had previously reported), it becomes clear that the vast majority of the remaining $310 billion or so isn't the result of the tax law changes. In order to believe that it is, we have to believe that Apple otherwise (i.e. if the recent tax law changes hadn't happened) would have dramatically slowed its domestic spending and job creation (as compared to what it had been doing recently).
I'm happy to go into the numbers a little if you'd like.
So here is the edit I was trying to make...
EDIT: I'd add some things I've already said elsewhere. I'm not trying to downplay the effects of the recent tax law changes. I'm generally supportive of them and think they'll have positive economic effects. I wish they'd have have gone further in cutting the corporate tax rate and in some other areas, but I think what was done with regard to corporate tax policy is better than not having done anything. I'm just being realistic in assessing the meaning of what Apple announced Wednesday. I suspect that the numbers it projected are quite conservative. I think it will turn out that domestic spending, capital expenditures, and job creation will be meaningfully higher over the next 5 years than what was projected, and that that will, in part, be fairly attributable to the recent tax law changes. But as it is, the numbers Apple projected don't suggest a large expansion in such spending and job creation.