Apple's Plan To Build A New Campus, Pay Taxes, and Hire 20,000 Employees


In the past, Apple has received a number of criticisms for the fact that they produce so many of their products in China. However, thanks in part to the recently passed Republican tax bill, Apple has announced plans to bring a lot of that production back to America, and they have pledged to pay taxes eclipsing $38 billion on profits that were made outside the United States.

Apple makes the popular iPhone mobile device, and that product has given them quite a bit of weight in the technology sector. Over the next five years, Apple plans to spend more than $30 billion in the United States on investments into their own services. Much of that money will be spent opening new data centers to meet the expanding demand for online services such as iCloud. During that time period, Apple will also expand their employee base by more than 20,000 in the United States. These jobs will be spread over the campuses that Apple currently uses, and they will build a new campus that will be manned by the new surge in employees as well.

The Republican tax bill that came from both President Trump and Congress is partially responsible for this development from Apple and other similar announcements from other companies. The idea behind the tax bill was that a lower tax rate for corporate businesses would improve wages, profits, and job growth, and it seems that some companies will actually take that approach. Conversely, some companies could take another path that funnels their new tax savings into systems that overlook the workers in favor of those in power.

Before this year, Apple had more than $250 billion in cash assets that were held outside of the United States. With the advent of the new tax bill, Apple is bringing that money back into the United States, so they will have to pay taxes on the amount. This points to the idea that the new tax bill will eliminate a complaint that centers on the fact that most corporate brands avoid high tax rates by keeping profits out of the United States and therefore outside the jurisdiction of taxation. The $38 billion tax payment that Apple has pledged will most likely be one of the largest that the government will receive as result of the new legislation.

Many corporate leaders have stated in the past that they would be happy to move profits back into the United States if the corporate tax rate were lowered, and it appears as if Apple is keeping their word. Of course, this is a smart move on Apple's part as well. The old corporate tax rate was set at 35 percent, but the Republican tax bill significantly lowers that to 21 percent. However, a provision in the tax bill that allows companies to repatriate profits from overseas at a tax rate of only 15.5 percent will save Apple a total of $42 billion compared to the amount of taxes they would have been forced to pay for such repatriation under the old tax code. That means Apple is getting a total tax break of more than 50 percent on repatriated profits.

While these moves signal that Apple is actively trying to keep the value of their brand within the United States, there are still hurdles that must be overcome. For instance, Apple has made no plans to move iPhone production from China to the United States. Many have criticized the company for taking advantage of low Chinese wages to produce devices that American workers could produce, but the tech giant has a good explanation for their behavior in this matter. According to Tim Cook, Apple CEO, Chinese factories are excellent at producing phones at a cheap rate because they offer better training. American workers must be trained extensively before they are ready for iPhone assembly, but many of the Chinese workers have been assembling phones for years and are significantly more proficient than American workers would be.

However, Apple is well aware that they can bring jobs to the United States through their iCloud service and other similar data-based services. In the United States, Apple already employs about 85,000, and this announcement from Apple will add another 20,000.