Future for the American worker, putting together iPhones at $2/hour. Go Trump! Go!
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Donald Trump Tells Tim Cook He'll Offer Apple 'Very Large Tax Cut' to Make Products in America
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There is a lot I dislike about Trump. But this is one of his better ideas. I do hope he gives the tax incentives for Apple and other corporations to bring back overseas profits. It benefits me as an AAPL shareholder (possibly bigger dividends). And realistically, I'd like to see at least some Apple products "Assembled in America". I understand that many of the components (like CPUs, RAM) will still be made in Asia, by Asian companies like TSMC and Samsung.
In theory, I agree, it sounds great....until you look at the actual real world implications. We know from history, bringing home foreign profits doesn't work:
"In 2004, the United States Congress enacted such a tax holiday for U.S. multinational companies, allowing them to repatriate foreign profits to the United States at a 5.25% tax rate.[1] Under this law, corporations brought $362 billion into the American economy, primarily for the purposes of paying dividends to investors, repurchasing shares, and purchasing other corporations.[1] In 2011, Senate Democrats, arguing against another repatriation tax holiday, issued a report asserting that the previous effort had actually cost the United States Treasury $3.3 billion, and that companies receiving the tax breaks had thereafter cut over 20,000 jobs.[2] A second repatriation tax holiday was defeated in the United States Senate in 2009.[1]
https://en.wikipedia.org/wiki/Repatriation_tax_holiday
https://www.bloomberg.com/news/arti...yth-for-the-dollar-trump-tax-holiday-is-a-dud
http://www.wsj.com/articles/SB10001424052970203633104576623771022129888
http://www.businessinsider.com/us-tax-holiday-benefits-shareholders-not-the-economy-2016-9
"Repatriations did not lead to an increase in domestic investment, employment or R&D—even for the firms that lobbied for the tax holiday stating these intentions and for firms that appeared to be financially constrained," wrote the authors of another major study on the effects of the tax holiday.
That paper from the National Bureau of Economic Research, "Watch What I Do, Not What I Say," says that for every dollar companies brought back to the US, there was a $1 increase in shareholder payouts.
"For several years, it was considered to be a disaster," Marr told Business Insider.
His own analysis suggests that tax holidays have little economic benefit. And some right-leaning think tanks, like The Heritage Foundation, agree."
http://www.businessinsider.com/us-tax-holiday-benefits-shareholders-not-the-economy-2016-9
That's noble of you but I'm willing to bet most Americans won't pay 20% extra and that's a conservative estimate.
Such a bold paranoia, not the first time anyone used that threat as an "end of world" chime. Yes hyper inflation would suck, everyone agrees. But explain the chain of events your suggesting?
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Honestly this is all that needs saying, everything else in this thread is a waste of everybodies' time.
Jobs didn't leave this country because of taxes as much as they left for lower costs due to investors demanding more profits. You could charge apple 1% tax and it wouldn't make up for the increased labor costs with an american workforce. To dollar is too strong compared to the currencies of the countries that make most of our products. As someone said earlier in this thread, Apple computers will eventually be made by robots which are made in china.
And just look how much the former Mac Pro (assembled in China) cost, versus the Made in America trash-can/Darth Vader version. One was flexible and expandable; the other was locked down, and ridiculously overpriced. And still hasn't been updated three (count 'em, three!) years.
We often hear outside of the US how the workforce is underpaid by world, and even Australian standards (e.g. minimum wage in US is $7 p/hour?, in Australia it's $18 - factor in conversion rates and the Au is much higher than the US), so by that then, how do you give this thought any plausibility that it can work that Apple can bring manufacturing back into the US and meet the pay scale expectations to remain the same when by off-shoring manufacture Apple can have a higher cost/profit ratio?
Things sound good, but look at the global economics and high hopes for the better/good aren't always feasible.
Things sound good, but look at the global economics and high hopes for the better/good aren't always feasible.
Because he's going to do what he promised. Lower taxes and increase military spending. And, it seems, spending on large corporations as well.
Make no mistake, lowering taxes is the same thing as increasing spending because it results in lower revenue.
Those things combined will lead to an increased national deficit and inflation.
Even with the best will in the world, this isn't going to happen. For a start, given 90% of an iPhone has "nothing" to do with Apple, that is, they're assembled with Asian designed and Asian manufactured components. If Trump wants the iPhone manufactured in the US, then he would have better chance (no chance) talking to the corporations who actually design and manufacture the basic components, e.g. Samsung etc and incentivise them to build all their manufacturing plants in the US, and bring back core manufacturing to the US. Apple physically manufactures nothing and so giving tax breaks to Apple would achieve nothing, but give the US tax payer a larger bill and make Apple shareholders happy.
The only thing that Apple could directly influence in this process is choose the US for assembly, which given it is worth about $5 a phone would fundamentally be pointless.
The only thing that Apple could directly influence in this process is choose the US for assembly, which given it is worth about $5 a phone would fundamentally be pointless.
It's amazing how everyone seems to know everything.
Pretty much 95% of the comments up to this point...smh
Pretty much 95% of the comments up to this point...smh
A tax cut is not going to solve all of the structural issues around manufacturing products in the US. Ill give him the fact that he is trying at all but I think he is going about it the wrong way. He is not accounting for all of the economic factors involved. I feel like it just shows a complete lack of understanding of the reasons manufacturing left the USA.
Ohh, so the 70yr old genius businessman is going to make robots in the US to make computers in China? Or perhaps bring Chinese robots here to be serviced by US citizens? Or maybe create robots in US but only for robots that will work in the US and consume coal generated electricity?
Doesn't matter, because his voters just want to scapegoat and get a handout. They are incapable of learning new skills, that is why they are unemployed to begin with. Sorry, I should say, that is why they no longer "participate in the labor force".
lol
But that is only part of it, if by having lower taxes for corporations they can hire more workers then those workers will pay more income tax. Especially if it gets them off welfare then it's a win win.
A Foxconn employee makes about 5K per year. What would a similar job compensation be in the US -- say 10x as much, $50,000?
Could Apple raise prices enough to support that (and other companies, all the other things that are manufactured overseas) without blowing up the economy for the majority of people (not the super wealthy that all of Trump's policies (like taxes, etc.) are set to benefit) in the US and around the world?
Could Apple raise prices enough to support that (and other companies, all the other things that are manufactured overseas) without blowing up the economy for the majority of people (not the super wealthy that all of Trump's policies (like taxes, etc.) are set to benefit) in the US and around the world?
Donald Trump doesn't even manufacture his products in the USA but he is going to convince someone else to when the economics don't make sense. He has two make the economics work. A tax cut doesn't make the underlying economics work.
Without getting into a debate about what he did or didn't do to woman, and to which race he is biased against, I agree with you about hoping he is successful. He won and that's that. I didn't vote for Obama but I accepted that he was in charge and hoped that what he did was for the better of everyone.
It can be worse, way worse, we will all see.
Trump is a sucky businessman. He is a good self promoter. His only successful business has been selling his name. He has zero experience with traditional businesses. Even the products with his name on them are just licensing deals. He is not involved in how those products are manufactured or distributed.
He didn't make them in the US because as a businessman it made him more money to manuafacture his product elsewhere. I would do the same. If there was a company that was able to do it here for the same cost I'm sure he would have.
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Well I disagree 100%. If you break the law you go to jail. I don't think they contribute more then they take. Unpaid hospital bills, income tax evasion, vehicle and license registrations, taking a job from a legal citizen that is on unemployment .... the list goes on and on.
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He never said Apple would get a special tax cut. All business would go from 35% (which is one of the highest in the world) to 15%. Not just Apple.
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In what world would this contribute to inflation?
That's the point. Clearly from an Apple perspective and an end buyer perspective it's cheaper for China to make the products for everyone involved and China has the base to produce the kind of volume Apple needs to be an efficient BTO company.
I was responding the the comment that the chart I posted implied that this problem occurred only under Obama's tenure.
The president actually has quite a bit of power when you include appointing the chair of the federal reserve, negotiating trade agreements, and the bully pulpit to impact business functions (taxes, healthcare, etc.)
Apple pays more taxes than any other company in the world.
How do you know it would be more expensive? Logistically it would save a ton of money. Also I'm sure there would be a lot of automated work that would cut down on cost.
With the tax cuts that all companies would be saving they would be able to make less on the phones and still make more profit.
The phone might be made better, we don't know how it would be made. So far with the apple products manufactured in China we had many recalls.
That's the problem with the way it was done in 2004. It was holiday. It has to be permanent to have the proper effect.
That is not necessarily true. There are many cost cutting measures that would take place if the products were assembled in the US.