Apple plans new U.S. campus, to pay $38B in foreign cash taxes • Hacker News Board

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#201

Post by WalterBright » Wed, Jan 17, 2018, 10:01 PM UTC

threeseed wrote: post #193

WalterBright wrote: post #172

Earlier quoted context omitted.

The stock market rally started on election day. Clearly it was not based on what Trump had done, but anticipated what Trump with a GOP Congress would do. The expectation of a large corporate tax cut was certainly there throughout 2017, and may very well have had a large influence on the Reno decision.

> The expectation of a large corporate tax cut was certainly there throughout 2017 No it wasn't. Most people thought that after the health care debacle that Trump would've pivoted to infrastructure. Especially given the tax cuts were so fiscally reckless which would've alienated moderate Senators like Collins or McCain. > and may very well have had a large influence on the Reno decision Apple has other data centres.…

> No it wasn't. Most people thought

What matters was what investors thought. And as a follower of the financial/investing news, there was very much an expectation of a large corporate tax cut.

> alienated moderate Senators like Collins or McCain

Both voted for it.

> not to do with macro economic effects

The size of the tax cut was certainly enough to significantly affect the economics of a datacenter investment.

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#202

Post by afjl » Wed, Jan 17, 2018, 10:12 PM UTC

downandout wrote: post #120

IBM wrote: post #108

Earlier quoted context omitted.

I'm not sure why you think a big 4 accounting firm would need to do clickbait, but that's beside the point. Whether Apple left the cash in Ireland or brought it back to the US, they would have paid $38B in taxes. That's the mandatory part. That's what the quoted text literally says. And since you seem to be unaware, the vast majority of Apple's cash has already been in the US for years, invested in US treasuries and…

The point is that the tax is mandatory, not the repatriation. If they didn’t believe that the US was the best place to put that money, they could have paid the tax and left it there or moved it elsewhere. The fact that they are deploying that capital here indicates some level of belief that the American economy will thrive under this tax plan.

I'm not sure this is a very convincing argument to make. The underlying economic conditions have not changed drastically in the last few months or even years. The tax plan's effect on the economy is presently a projection. Apple's decision to repatriate this sum is a no-brainer: America's economic landscape hasn't changed, but the deal that was offered has changed.

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#203

Post by downandout » Wed, Jan 17, 2018, 10:17 PM UTC

pdeuchler wrote: post #191

prklmn wrote: post #155

Earlier quoted context omitted.

Disregard the link with the confusing title and think critically for a moment. Do you really think the US government is forcing all companies to bring any and all profits earned and stored overseas back to the United States? That’s what you’re implying.

Where the database that holds the dollar amount is located doesn't matter, what matters is where it's taxed and where it's spent. The US government _forced_ the companies to pay this tax, that point is irrefutable.

All taxes are compulsory - "_forced_" - as you put it. Who would pay them if they weren't? However, they are free to invest it wherever they choose, and they have chosen the US. That is not "mandatory repatriation".

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#204

Post by guyzero » Wed, Jan 17, 2018, 10:28 PM UTC

rambleraptor wrote: post #149

I feel like this potentially buried the lede. Apple is planning on opening up a new campus in the USA. I feel like Amazon's HQ2 search is going to open the floodgates for tech companies asking for public incentives. Tech companies in the Bay Area have been creating tens of thousands of jobs for years without asking for much publicly. Expect that to change now.

It's not that much of a campus: "The new facility is at 520 Evans Avenue. It's a lot that has been vacant for many years until Apple purchased it to build the new 27,000-square-foot facility.

An Apple employee tells KOLO 8 the new facility will be a location where Apple filters computers through on their way to the new data center on USA Parkway and another center in Arizona."

It's basically datacenter machine staging. Good jobs I'm sure, hardly a second headquarters.

http://www.kolotv.com/content/news/Groundbreaking-set-for-do...

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#205

Post by cromwellian » Wed, Jan 17, 2018, 10:32 PM UTC

How realistic is it that a $5 billion fund can move a non-trivial amount of iPhone manufacturing to the US? Most of the BOM supply chain is in Asia, and assembly at FoxConn I heard amounts to 3% of the cost. It seems like Apple would have to build mostly automated assembly in the US or suffer severe margin reduction, and they'd suffer turnaround issues with the crucial components being still sourced in China.

However, given the issue with iCloud, you can see that they've now realized they have to reduce the leverage China has over time, but $5 billion seems way too small to move an entire logistics manufacturing chain, they need a moonshot for this. Apple spends way too much on stock buybacks and dividends and not enough on reinvestment.

Elsewhere in this thread, the pro-Trumpists don't seem to get why people were opposed to the tax plan:

The fear many people have is that this repatriation will mostly go to stock buybacks, dividends, and executive compensation just like the last 3 times there was a repatriation event. The last repatriation event didn't make a dent in national income growth or GDP, it barely moved the needle. The Democrats wanted the funds to be spent on infrastructure, or education as an offset.

The GOP decided to spend any increased revenue on lowering the estate tax and marginal tax rate cuts to avoid the cutoff for reconciliation. Since Democrats, backed by tech companies, had long supported repatriation. The GOP had a chance to pass a clean corporate tax bill that left everything else alone. Everyone knows the reductions for marginal rates at the high end and the estate tax changes aren't going to affect GDP much, and the net result of that was to impose double taxation on some states due to SALT deduction changes, and increase the deficit by $1.5 trillion. Apparently, double taxation is bad if it's the estate tax, but not if you're in California, New York, etc.

A practical, clean, corporate tax reform bill would have been better, especially if it was synchronized with international partners to try and close loopholes. For this reason, although the tax plan had some good aspects to it, overall, it's a very bad bill and I doubt the positives to Apple are going to offset the negatives to the rest of the economy.

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#206

Post by prklmn » Wed, Jan 17, 2018, 10:39 PM UTC

ogre_magi wrote: post #121

arrrg wrote: post #111

Earlier quoted context omitted.

This might be the most brilliant tax plan in the universe. The president wouldn’t be any less revolting because of that. I’m not sure why you are connecting these two ideas. It is true that the partisan extremism of everything leads to people irrationally hating everything someone does (or, as in this case, is loosely associated with), but that doesn’t mean the opposite. This does not and should not wash this revolti…

You are very virtuous and your political opponents are very gross.

I heard Stalin was good on taxes as well. There are bigger issues than taxes, my friend.

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#207

Post by dboreham » Wed, Jan 17, 2018, 10:55 PM UTC

tooltalk wrote: post #17

I'd like to know who those 9,000 American suppliers and manufacturers are. Other than Corning who supplies the Gorilla Glasses for almost all smartphone makers, I can't really name any significant domestic suppliers who would make up $55B of their "spending."

At least three of them will be supplying toilet paper. That leaves only 8997 left to account for..

Basically Apple just did a COUNT(*) query on their vendor table WHERE country IS 'USA'.

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#208

Post by axau » Wed, Jan 17, 2018, 10:57 PM UTC

gonvaled wrote: post #198

axau wrote: post #186

Earlier quoted context omitted.

Because the US is not going “down a path that neglects its obligations”. In fact quite the opposite since it just got a massive tax revenue increase. So comparing it to a situation where the US decided to just stop levying tax doesn’t make sense.

It legislated a reduction in tax revenue hoping / pretending that an increase in economic activity will offset the reduction. Fact 1: reduced tax rate and revenue Fact 2: permanent beneffit to corporations, in the form of tax reductions Bet 1: the economy will grow Bet 2: the proffits will trickle down Bet 3: increase in economy will allow to fullfill obligations If the bets do not materialize, nobody cares. That is,…

We’re talking about the repatriation part here, not all the others, which are a different debate.

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#209

Post by dang » Wed, Jan 17, 2018, 10:58 PM UTC

hateduser2 wrote: post #95

IBM wrote: post #90

Earlier quoted context omitted.

>Incorrect. There is a repatriation tax holiday designed to encourage repatriation. They are not required to do so. Unfortunately, you're incorrect. https://www.pwc.com/us/en/tax-services/publications/insights...

No u

Would you please not post unsubstantive comments here?

Re: Apple plans new U.S. campus, to pay $38B in foreign cash taxes

#210

Post by dang » Wed, Jan 17, 2018, 10:59 PM UTC

Url changed from https://www.apple.com/newsroom/2018/01/apple-accelerates-us-.... Some of the comments below make a bit more sense if you know they were replying to that one.

This is a bit of an exception to the HN guidelines' call for original sources. We generally prefer a high quality third party report on news like this to a corporate press release. The latter tend to read like press releases.