Apple CEO Tim Cook, one of Donald Trump fiercest critics on immigration, is now praising the president’s tax reform – saying it’s partly responsible for the tech company’s decision to create 20,000 new jobs and build a new campus.
On Wednesday, Apple announced plans to invest $350billion in the U.S. economy over the next five years.
Cook spoke with ABC News’ Rebecca Jarvis that evening, explaining more about that investment and what inspired it.
Jarvis asked Cook whether Trump’s tax reform, which offers astronomical tax breaks to corporations, had any impact on the company’s sudden decision to expand.
Apple CEO Tim Cook spoke about the company’s plans to invest $350billion in the U.S. economy in an interview with ABC News’ Rebecca Jarvis
Cook said the company’s decision to create 20,000 new jobs and build a new campus is in part due to President Trump’s new tax law
‘Without these policy changes, would you be able to announce today the creation of 20,000 jobs?’ Jarvis asked.
‘No, there are clearly…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 responded.
‘So it sounds like President Trump’s tax bill has been a huge windfall for Apple?’ Jarvis continued.
‘Well, there are two parts of the tax bill right? 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,’ Cook said.
President Trump look the news from Apple as a big win for his administration on Wednesday
Trump’s tax bill has been unpopular with Democrats, who say it’s a slap in the face to America’s middle class – the very people Trump pledged to protect when he took office last year.
Cook refused to comment when asked about his opinion on the tax bill’s impact for average Americans.
‘We’re not taking a position on the individual side, I think that’s for other to look at,’ he said. ‘But on the corporate side, I think it will create jobs that will help the middle class.’
Besides dramatically lowering the standard corporate tax rate, the reforms offer a one-time break on cash being held overseas.
Apple plans to take advantage of that provision to bring back most of its roughly $252 billion in offshore cash, generating a tax bill of about $38 billion. It’s something that Apple CEO Tim Cook promised the company would do if it could avoid being taxed at the 35 percent rate that had been in effect under the previous tax law.
About $75 billion of the $350 billion in U.S. investments will be paid from money that had been overseas, Apple estimated.
Companies that bring back money stashed overseas this year will be taxed at a 15.5 percent rate, below the new 21 percent rate for U.S. corporate profits under the new law.
Other U.S. companies, including American Airlines, AT&T and Comcast, have been handing out $1,000 bonuses to all their workers to share the wealth they will gain from the lower rate on their domestic earnings.
Excluding banks and other financial services companies, Moody’s Investors Service estimates corporate America has an estimated $1.6 trillion in overseas cash. Most of that is in the technology industry, with Apple sitting at the top of the heap.
Analysts have been predicting that most of the overseas profits coming back to the U.S. would be plowed into paying shareholder dividends and buying back stock, something that happened the last time a one-time break on offshore profits was offered more than a decade ago.
Trump and lawmakers are hoping companies use the money to raise wages, expand payrolls, open more offices and invest in new equipment.
Apple released a statement on Wednesday, saying they will contribute $350billion to the U.S. economy over the next five years. Above, an Apple store in New York in 2016
After plowing nearly $46 billion into dividends and stock repurchases in its last fiscal year, Apple is still likely to funnel a big chunk of overseas money to its shareholders.
But Wednesday’s announcement was clearly designed to be a show of faith in the U.S. – Apple’s most lucrative market. The public show of support also helps the optics of a company that will still continue to make most of its iPhones, iPads and other gadgets in factories located in China and other faraway countries that offer cheaper labor.
‘Apple is a success that could only have happened in America, and we always felt a very big sense of responsibility to give back to our country and the people who have made our success possible,’ Cook said during a ceremony Wednesday celebrating a new warehouse being built in Reno, Nevada.
The White House applauded Apple’s commitment.
‘Just as the president promised, making our businesses more competitive internationally is translating directly into benefits for the American worker, through increased wages, better benefits, and new jobs,’ White House spokeswoman Lindsay Walters said.
Apple joins Amazon.com Inc in scouting for a location for a second campus. Their main hub (above) is located in Cupertino, California
Apple Inc., which just spent an estimated $ billion building a Cupertino, California, headquarters that resembles a giant spaceship, plans to announce the location of a second campus devoted to customer support later this year.
The company didn’t say how big the second campus will be, or how many of the additional 20,000 workers that it plans to hire will be based there. About 84,000 of Apple’s 123,000 workers currently are in the U.S.
One thing is certain: Cities from across the U.S. will likely be offering Apple tax breaks and other incentives in an attempt to persuade the company to build its second campus in their towns.
That was what happened last year after Amazon announced it would build a second headquarters in North America to expand beyond its current Seattle home. The online retailer received 238 proposals from cities and regions in the U.S., Canada and Mexico. Amazon is expected to announce the winning bid later this year.
Jarvis also asked about where Apple plans to build their new campus. Cook said they’ve narrowed down the location to about a handful of places. They won’t give clues until later this year, but California and Texas have been ruled out because Apple already has a large presence in both states.
Besides hiring more workers and building its second campus, Apple is also planning to open more data centers to help back up the photos, documents and other content that people store on their phones, tablets and computers. It also is increasing a fund established last year to invest in U.S. manufacturers from $1 billion to $5 billion.
Apple’s high-profile commitment may pressure its peers in the technology sector to take similar steps, despite the industry’s disdain with many of Trump’s other policies, especially those affecting immigration. The next four biggest hoarders of overseas cash are Microsoft, Cisco Systems, Google corporate parent Alphabet Inc. and Oracle, with a combined $320 billion among them.
APPLE V AMAZON: THE SEARCH FOR A NEW MULTI-BILLION DOLLAR CAMPUS
Apple joins Amazon.com Inc in scouting for a location for a second campus.
Amazon finished taking applications from cities in October for its second campus.
Apple has not said whether it has settled on a second campus location yet.
Currently, Apple’s largest U.S. operations are in Cupertino, California, at its new ‘spaceship’ Apple Park headquarters, followed by a facility in Austin, Texas where it houses customer service agents and where contract manufacturers assemble some Mac computers.
The company also employs several thousand workers and contractors in Elk Grove, California, where it has customer service agents and refurbishes iPhones.
Apple also has built its own data centers in North Carolina, Oregon, Nevada, Arizona and a recently announced project in Iowa and leases data center space in other states.
Apple’s largest operations center in Cupertino is known as the ‘spaceship’