Before his election, President Donald Trump singled out Apple for criticism on more than one occasion, taking the company to task for -- among other things -- manufacturing its iPhones in overseas factories and fighting the U.S. Department of Justice in court over the security of an iPhone seized after a mass shooting in California.
However, Apple now appears to be one of the U.S. technology companies likely to benefit most from the Trump- and GOP-led tax bill approved by Congress in December.
That bill will reduce Apple's potential tax burden on its overseas cash holdings by around $47 billion, according to one estimate. Instead of the 35 percent tax Apple would have had to pay on any overseas cash it brought back to the U.S., the new tax law imposes on one-time, 15.5 percent tax on those funds, whether or not they're repatriated.
Apple yesterday touted its new one-time tax payment of around $38 billion as likely "the largest of its kind ever made." Apple also outlined its five-year plan to spend $30 billion in capital investments in the U.S. over the next five years, which the company said would create more than 20,000 new jobs.
$350B in Economic Impact
In an interview with ABC News last night, Apple CEO Tim Cook (pictured above) offered carefully worded responses about the tax bill's impact on his company's capital spending plans, noting that it would have made some of the intended investments one way or the other.
"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 on ABC's World News Tonight with David Muir. "There are two parts of tax bill, there's a corporate piece and an individual piece. I do believe the corporate tax side will result in job creation and a faster growing economy."
In its announcement yesterday, Apple noted that the five-year spending plan would directly contribute more than $350 billion to the U.S. economy during that span. The company said that figure included both new investments and current spending on domestic supplies and manufacturing partners, but not its ongoing tax payments, taxes from employee wages, or money generated through the sale of Apple products in the U.S.
Eye on Growing App Economy
Over the next five years, Apple said it would focus its capital spending on three areas: direct employment, suppliers and manufacturers, and the "fast-growing app economy." Infrastructure projects include a new Apple campus, whose location will be announced later this year, and $10 billion in ongoing investment in U.S. data centers. Apple yesterday said it had just broken ground on a new facility in Reno and also recently announced a new data center project in Iowa.
Other programs outlined in yesterday's announcement include an increase in Apple's Advanced Manufacturing Fund "to support innovation among American manufacturers" from $1 billion to $5 billion, and continued support for education in programming and other areas of science, technology, engineering, arts, and math. Apple said its education efforts are aimed at reducing the "coding skills gap and help prepare more people for jobs in software development."