Apple to contribute $350B to economy, hire 20000 workers

Doris Richards
January 21, 2018

Apple Inc. announced that it planned to hire 20,000 employees over the next five years, give $2,500 bonuses in restricted stock to its existing employees and invest $30 billion in USA facilities over the next five years.

Apple estimated that its direct impact on the American economy would total more than $350 billion over the next five years, but how much that goes beyond what the company would have spent anyway is unclear.

In all, Apple says it's pumping an estimated $350 billion into the USA economy over the next five years. Had Apple's $250 billion cash pile been exposed to tax at the old United States corporate tax rate the bill would likely have been in the $75-$80 billion range. Such companies had been reluctant to repatriate their cash because of the high rates of tax they would have to pay in the US.

After the announcement, Apple's shares rose 1.65 percent, to $179.1 a share Wednesday.

Trump called Apple's move a victory for efforts he has made. However, much of the money will be sent to the capital expenditures, which will include over $10 billion to the data centers across the United States. President Trump is trying to keep more investment as tax dollars "at home".

Thirdly, the company is coming up with new plans in education based on its 40-year history in the same in terms of coding. For years, Apple had said it would not bring its foreign earnings back to the United States until the corporate tax code changed, because such a move would be too costly.

Late previous year, Apple opened a new Northern California headquarters, a circular layout that resembles a giant spaceship.

The Media Breakingviews estimated that Apple could have increased US headcount by 24,000 in the last five years.

Apple Inc. will be opening a new campus that is part of its new five-year, USA investment plan of $30 billion. They must pay tax whether they bring the money back to the country or not.

Apple had set aside $36.3 billion in anticipation of tax payments on its foreign campus.

The higher tax rate was the reason why Apple had long resisted sending its war chest to the USA, the company's chief executive told "60 Minutes" in 2015. Bloomberg, which reported the news earlier, said the bonus would be available to employees below a certain senior level.

Under the new Republican tax bill, signed into law by US President Donald Trump just before Christmas, companies are required to pay a one-time tax, at a reduced rate of 15.5%, on foreign-held earnings whether they intend to bring them back to the US or not. This cash pile built up by U.S. companies over the years - put at over $3,000 billion - will in future be taxed. It also allows companies to defer paying tax on those offshore profits until they are brought back to the US.

In return, Trump and other Republicans can point to Apple as having come around due to their legislative action.

Other reports by Iphone Fresh

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