This is the largest spending plan announced by any firm following the historic Republican-led revision of the U.S. tax bill.
Following the successful passing of the U.S. tax bill which introduces deep tax cuts for corporates, Apple Inc stated it will open a new campus, as part of a five-year $30 billion U.S. investment plan, as well as bring back nearly $38 billion from overseas and pay a one time tax to the U.S. government, in what is slated to be one of the largest corporate spending plans announced since the historic revision of the U.S. tax code.
In the 2016 U.S. election campaign, Trump had targeted the iPhone maker over its production strategy and Apple had come under intense pressure to invest in the U.S.
Although Apple has yet to announce a significant change in its production policy, experts say it would be impractical in economic terms to manufacture iPhones in the U.S. With this as the background, Apple has taken steps to emphasize the impact it has on the U.S. economy, starting from its large developer base who sell software on its App Store to the tens of billions of dollars per year it spends with U.S. suppliers.
Apart from its aforementioned spending plans, Apple also said, it plans on hiring 20,000 people an invest an estimated $350 billion in the U.S. economy over the next five years.
Significantly, Apple has also run up $97 billion in U.S.-issued debt to pay for previous share buybacks and dividends.
As per a few investors, the U.S. investment will provide some room to Apple to make more stock buybacks or boost its dividends payout without attracting much criticism.
As per Walter Piecyk, managing director for TMT Research at BTIG Research, it is difficult to say whether the U.S. expansion plans is actually an increase from a previous plan or whether the amount was meant for investment abroad and is now being funneled in the U.S. because of Trump’s tax policy,
Trump has described Apple move as a victory for his efforts.
“I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS,” tweeted Trump.
When asked during an interview with ABC News whether its job creation announcements were directly related to the Republican tax plan, Tim Cook, Apple’s CEO gave a measured response.
“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 we would have done in any situation,” said Cook.