No, Apple Is Not Creating 20,000 Jobs Because of the Tax Bill

By JORDAN WEISSMANN
JAN 17, 20185:26 PM

On Wednesday afternoon, Apple posted a press release. The primary purpose of this statement, it seems, was to tell investors exactly how much money the company would have to pay in taxes on the profits it’s now repatriating from overseas, thanks to the Republican tax reform bill, while also announcing that it plans to build a new campus for tech support workers. But instead of simply reporting this information, Tim Cook’s media team decided to drop it in the middle of a long missive titled “Apple Accelerates U.S. Investment and Job Creation.” The iPhone maker promised to “contribute” $350 billion to the U.S. economy over the next five years while hiring 20,000 additional workers.

This has, of course, been catnip for conservative fans of the GOP bill. Fox Business predictably tweeted that Apple would create 20,000 jobs “due to tax reform.”

FOX Business
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@FoxBusiness
#BreakingNews: Apple to create 20,000 new jobs due to tax reform.
1:14 PM - Jan 17, 2018
 481 481 Replies   3,444 3,444 Retweets   8,034 8,034 likes

“This is huge folks. This is another big company. One of the biggest companies in America. Saying big time jobs, a lot of jobs coming back to America,” Fox Business anchor Charles Payne told his viewers, deploying some remarkably Trumpian syntax. “And they say it’s all because of tax reform.” CNBC also reported that Apple was increasing its U.S. investment “in part because of the new tax law,” which gave Nevada Senator Dean Heller an opportunity to gloat.

Dean Heller
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@SenDeanHeller
Via @CNBC: “.@Apple said on Wednesday it will invest $350 billion in the U.S. economy over the next 5 years, touting the creation of 20,000 new jobs & a new campus thanks, in part, to the prospect of #taxreform.” https://www.cnbc.com/2018/01/17/apple-announces-350-billion-investment-20k-jobs-over-5-years.html …
1:15 PM - Jan 17, 2018

The punchline here is that Apple did not actually say that it is investing any additional money in the U.S. because of the tax law. That idea appears nowhere in the press release.

Here’s what’s actually going on. As part of its transition to a new system of International taxation, the Republican tax bill included a big, one-timed levy on all the profits U.S. corporations have been hoarding abroad for years. (This is known as a deemed repatriation.) Apple has been sitting on a giant overseas money hoard worth $252 billion. Today, we learned it would pay $38 billion to the IRS as the cost of bringing that cash home.

And what else did we learn? Not a ton. The press release predicts that between its “current pace of spending with domestic suppliers and manufacturers—an estimated $55 billion for 2018—Apple’s direct contribution to the US economy will be more than $350 billion over the next five years.” In other words, Apple will keep buying stuff from other U.S. companies. This is not a patriotic act of charity. Apple is literally saying it will continue business as usual. That alone accounts for $275 billion of its $350 billion forecast.

As for the rest of that total? In a mystifying bit of self-aggrandizement, the company is counting its $38 billion repatriation payment as another “direct contribution” to the U.S. economy. This is money they are required to pay by law. “A payment of that size would likely be the largest of its kind ever made,” the company helpfully notes. This is only true because Apple spent years making money hand-over-fist while doing everything in its power to avoid taxes.

Finally, we get to the company’s actual plans to invest in the U.S. Here, we learn that “Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one,” which will initially “house technical support for customers.”

Read more
https://slate.com/business/2018/01/no-apple-is-not-creating-20-000-jobs-because-of-the-tax-bill.html