Tax reform was long overdue in the United States. Many companies including Apple have held overseas cash to avoid paying the exorbitant business tax rate, at 35%, which was one of the highest in the world. The new US Tax Cuts and Jobs Act brought the rate down to 21% - a significant change and also gave all companies with overseas assets a one-time fee to bring back their cash into the US, also known as repatriation.
Apple has announced capital expenditures in the US, investments into American manufacturing over the next five years and paying approximately $38 billion in taxes to repatriate overseas profits - the largest of its kind in history. Apple is also the largest US tax payer currently.
Tim Cook, Apple CEO announced,”Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy. We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”
Apple intends on growing US operations and investing $350 billion dollars back into the US economy with 20,000 new jobs through hiring at existing Apple centers and creating a new one. Apple already employs 84,000 people in all 50 states.
Apple’s new capital expenditures include investments in data centers. All US facilities are powered by renewable energy including solar, wind and micro-hydropower that Apple generates or purchases locally. The new campus to be developed will be completely powered by green energy.
Apple has also increased its Advanced Manufacturing Fund fund from $1 billion to $5 billion. The fund was set up to support innovation among American manufacturing companies. Apple already backs projects in rural Texas and Kentucky. Apple also works with over 9,000 American suppliers, both large and small businesses in all 50 states to provide parts or materials.
Apple also has supported the gap in coding skills through its own Swift coding language via a Swift playgrounds app and a free curriculum, that is being adopted at different colleges. Over 100,000 students and teachers have attended free classes.
The iOS app economy has generated $5 billion in revenue and 1.6 million jobs for app developers in the United States.