Following President Trump’s tax reform bill which passed through Congress recently, tech giant Apple announced it will repatriate $350 billion in overseas cash, thus contributing massively to the US economy over the next five years. Thanks to the fiscal relaxation, 20,000 new jobs are to be created and the company vowed to open a new campus. Apple is expecting to pay approximately $38 billion in taxes for the massive sums of cash currently hoarded overseas, which are now on their way back to the US.
All these figures suggest that the tech giant is going to repatriate all of its cash which is currently parked in offshore bank accounts. Apple also announced it will spend 30 billion dollars in capital expenditures over the next 5 years, with 10 billion being used for investments in US based data centers. Another 5 billion will be spent as part of an innovation fund. The 20,000 jobs will include both suppliers and direct employment, while the new Apple campus will concentrate on customer support. The company’s CEO has said in a statement:
“We have a deep sense of responsibility to give back to our country and the people who help make our success possible”
Here’s from the company’s official release:
Combining new investments and Apple’s current pace of spending with domestic suppliers and manufacturers — an estimated $55 billion for 2018 — Apple’s direct contribution to the US economy will be more than $350 billion over the next five years, not including Apple’s ongoing tax payments, the tax revenues generated from employees’ wages and the sale of Apple products.
Planned capital expenditures in the US, investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $75 billion of Apple’s direct contribution.
Apple, already the largest US taxpayer, anticipates repatriation tax payments of approximately $38 billion as required by recent changes to the tax law. A payment of that size would likely be the largest of its kind ever made.
Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one. Apple already employs 84,000 people in all 50 states.
Also, stock market optimism reached its highest level in 32 years, with bullishness among pros reaching 66.7%, which is the highest reading since 1986 as per the latest Investors Intelligence survey:
“Sentiment readings have roughly followed their 1986/87 pattern. Then the bulls peaked with initial market highs early that year and they returned to above 60% levels months later after more index records. In 1987 stocks crashed a few months after that. A repeat of that scenario suggests potential danger, especially as the market moves become parabolic. Those recently holding cash appear to be chasing a rallying market, adding fuel to the fire.”
DOW jumped 300 points on Wednesday, breaking above 26,000 again, while the S&P 500 gained 1.1%. Finally, US manufacturing output rose for the 4th month in a row in December, marking the strongest quarter since 2010.