Apple commits $430B in US investments over five years
apple.com
apple.com
1. Getting some good press before Congress decides to do something in regards to the app store model.
2. Apple is reading the winds, seeing that Chinese supply chains may be politically constrained, and preparing for that future.
3. Apple is reading the winds, seeing that Chinese supply chains may be politically constrained, and announcing this investment so they can continue to have Chinese supply chains after a good PR move.
And…$430 billion over 5 years is a lot, but what if it influences tax or tariff rates just a bit in your direction over a 10-year period? Because that could be worth it, especially, again, if you were going to set up that new campus anyway.
Regardless of what?
This spend was probably in the books, so let’s wrap it in a nice bow before Congressional hearings.
They've realized that perhaps, just perhaps, they could afford to have more than one large corporate campus at their scale of fuck you money. Which gives them wider access to talent and actually reduces headaches such spiraling cost of living forcing salaries to also spiral upwards and also being expected to solve housing crises locally.
Being solely located in one of the most expensive areas in the United States does seem a bit absurd if you can avoid it. Based on Cook's statements about returning to the office, it seems like they value being physically proximate more than the immense savings that moving the workers who could be remote to remote.
Perhaps 'plethora' or 'multitude'.
Industry Clusters are often historical, so it always strikes me as strange when I see comments like this one that make a case for how misguided it was for tech companies to cluster in Silicon Valley and tolerate the high cost of living.
That line of thinking misplaces causes and effects so that they’re hilariously backwards.
Silicon Valley is a innovative place because of an extensive history of educational institutions, research facilities, and other market conditions that simply did not physically manifest in any other place.
On top of all that, the software industry has one of the lowest COGS (cost of goods sold) of any major industry. Facebook’s sales per employee is close to $2 million [1]. The fact that their SV employees cost hundreds of thousands of dollars more than employees is quite nearly irrelevant. Someone that’s 10 or 20 percent more productive will make up that labor cost difference by bringing in 10 or 20% more revenue, so it doesn’t really make sense for Facebook to abandon the best talent pools in search of cheaper rent or wages.
Tech giants are building out in Austin for its specific traits, and they don’t seem to mind that it’s rapidly becoming expensive and congested just like California. The question that might be asked is: why is Apple in Austin instead of Houston or Dallas or Nashville or Omaha?
[1] https://csimarket.com/stocks/FB-Revenue-per-Employee.html
The anti building laws of California are by far the biggest reasons housing is so expensive. Even if Austin gets pricey, you can always drive into the city.
As someone who left California, I will say no one in their right mind should live there. No matter how much you earn, you'll never realistically out earn the cost of living. I found myself quickly deep in credit card debt trying to be cool in California. It's just a horrible place to live, I had to estrange myself from my family to move, and it was absolutely worth it. Anyone who tries to make you live in such a horrible place does not care about you at all.
People are also phenomenally nicer in other cities, I was shocked at how easy it was to meet my girlfriend once I got to Chicago. It's as if Chicago's this amazing City where people understand you need to work to get things you want instead of thinking you're entitled to everything.
Anyway, with remote work now being seen as viable I can see the idea of having expensive big offices becoming antiquated.
So many of these corporate investment announcements are really "look at what we were already going to do".
Amazon HQ2 anyone?
It seems like a pretty high risk situation for them and has chilling effects elsewhere (content restrictions on Apple TV). It also damages their brand ethos around privacy. CCP pressure on Taiwan and TSMC is also a concern I'd be thinking about if I was them.
I wish Apple or govt would fund similar fab/s in the US - hell just build it with stimi or huge tax breaks and TSMC can still hold the IP and profit, just have enough onshore knowledge to run it in isolation if needed.
CCP hitting TSMC in their first strike would be a hell of a whammy, even if mutually destructive.
I dont think infrastructure is the root of our (US) problem. We do have a skills, and talent gap. not just in "tech jobs" like many people think but at factory floor level as well.
Even if they could open the factories tomorrow finding people to fill those jobs will be hard.
This is the current Democrat definition of the word where everything from health care to education is "infrastructure", that is not what the average person would consider to be "infrastructure".
Healthcare and Schools are not "infrastructure", "infrastructure" would be Roads, Power, Communications, Basic Utilities, etc etc etc.
>> Just consider the process of applying for an SBIR or finding a job or starting a startup or getting from SF to San Jose, etc.
Given that California is the least business friendly state in the union, in fact it is down right hostile to business I would image doing anything in CA is pretty hard
Yes, well we as a developer community can never let up on Apple and Google's app store models being legally reprehensible.
We are quite literally the most negatively affected community by these monopolies over general consumer's devices.
We need to be the "force to be reckoned with" here and constantly petitioning politicians for action else get campaigned AGAINST electronically (our domain).
I would say that the app store model negatively affects a growing "small software business" sector of the economy which will only continue to grow as a stable pillar of the modern middle class.
In other words, this is only becoming that much more of a critically important issue.
I dont like how Apple spin this as investment in the headline, when it is clearly contribution. If you buy something at Walmart, or any of your daily needs, is that an investment in US?
And I dont know how that $430B is calculated.
Direct Spend with American Suppliers are mostly Corning for Front Glasses, Qualcomm for Modem and Patents. These two alone is close to $50B in five years.
Even if Apple spend $10B on Datacenter and $10B on Apple TV ( They dont ), Likely including all their employees salary, Rent for Apple Retail, basically every single dollar spend within US. The numbers still doesn't add up.
It reads to me Apple is doing their PR pieces on their contribution to US because Congress is now looking at them as enemies.
Ita because paying US people for that work is better for the personal development of (otherwise underemployed) US people than paying non-US people.
I wouldn't expect this to create that many jobs in manufacturing, it seems more like engineering and creative work, with a promise to prefer US suppliers, assuming they exists.
Barring a major transformation, I don't see Apple ever operating a factory, whether in the US or overseas.
If a company opens an office overseas and hires people, we call it foreign direct investment. Using the same math for domestic investment seems alright. It's money being pumped into the local economy, after all.
From an accounting perspective, when a business spends money on a factory it’s an investment since you end up with an asset on the balance sheets. But the same is true of spending on inventory. There are also intangible investments that don’t end up on balance sheets (like writing software) and for high tech companies that can be pretty substantial.
You could simplify this to “Apple says they’re going to spend a lot of money in the US.” Okay, I guess that’s good?
You can argue yes, if you pay Walmart $50 for eggs and stuff. That means Walmart pays taxes (goes to the Gov), Walmart pays employees (so they can buy other stuff), Walmart buys a product (paying every individual person from shipping to receiving, etc). Opposite would be saying going to Canada and buying it all, and all you would pay would be an import fee. Or buying something from Aliexpress and getting free shipping, which is probably a net value on the US economy.
But you can also argue no, cause it's so small that it is almost insignificant.
If companies start investing their money domestically then excess savings will fall, deflationary pressures will be gone and the economy will start growing quickly again and that means wages will grow too.
They are a US company, reaping the tax benefits of that nexus. If they'd been an EU company, they would have paid a lot more in various taxes (including higher wage taxes) over the last 40 years. IOW, they would not be as wealthy a company today.
Tons of countries tax worldwide income.
i've read some rhetoric somewhere that deflationary money is a terrible thing for the economy since it reflects in asset prices and makes you more concerned with saving. From my perspective, that's a very good economic consequence and would stop all these boom bust cycles that we seems to be creeping up at irregular intervals of massive spending.
A better system of stock trading would be bonding. When i buy a stock, the money is locked into a contract that is reimbursed to me after the purchase period. say i buy $100 worth of Tesla for a 1 year stock period. At the end of that lease, i will recieve my $100 back and Tesla may reward me with a % based on the performance of that year. I have no liquidity but my only 'Loss' is the loss of other rewards i could have gained by betting in another industry or company. Everything being completely liquid allows for HFT and the banking industry to drain our economic fecundity by placing it in the realm of fairy-land instead of investments in infrastructure, energy generation and manufacturing.
It is very simple why this is not a good policy.
Let's say you are a software engineer working on some software product/service. You are working hard on that software, adding features, fixing issues, maintaining it, etc. The buyer pays you $100 today for that software.
Tomorrow you release a new version, with lots of upgrades and new capabilities. The buyer for this software says "my money should be worth more tomorrow than it is today" so they offer only $80 for the new version. Boom -- your work is worth less every day!
Your point is not pedantic at all and in fact completely negates the other commenters counterpoint made to your initial argument.
The buying power of the entity you are exchanging in has changed -- for everyone. This absolutely does not diminish your work. It is literally equivalent to being paid in many more bitcoin in 2012 versus today.
I am sure there are valid critiques of allowing deflation. But, as of yet a solid one has not been provided in this thread.
It would be interesting to see if anyone can offer other sources or arguments against this pro-savings, deflation-allowable, economy.
Allowing natural volatility into the value of any asset that is traded, including the USD, likely resolves to a more natural equilibrium in the economy, no?
Yes, this is because of the interchangeability of the value of an asset declining and the fact that no one is buying it. No different than a stock price in free fall. Why is it in free fall? Because no one wants it.
Artificial infinite inflation takes away from the buying power of especially younger generations (but average people in general). It inflates the supposed price of assets (in terms of the inflated exchange asset, e.g., USD) which makes it much more difficult for newcomers to gain access to the necessary amount of buying power otherwise.
Think of it like inflating bitcoin. True, bitcoin is worth more. But, it takes a lot more work and time to get more bitcoin. This actually causes deflation to people's labor value and thus their buying power and leverage.
And not all assets will inflate equally. And some assets will receive government subsidies (this is an increasing phenomenon due to the inflating economy) because they are considered "critical" to society e.g., gasoline, milk, and green energy.
Overall, allowing things to deflate and inflate more naturally actually increases volatility which is actually what will increase economic velocity. Trading will increase, and interest will increase because of profitable trading, and thus investment will increase.
So, no, the current artificial and centralized system that thinks it can outgame game-theory is just stupid.
It's just Neo-Liberal/Neo-Conservative hippie baby boomer nonsense to concentrate wealth and power into an aristocratic elite empowered by trillions of dollars of managed retirement portfolios. They simply do not want to allow for natural volatility so that their managed assets are always increasing. It's absolute insanity.
EDIT:
Not that my above comment was perfect, but let me attempt to be more succint.
> Monetary appreciation only helps
Appreciation of an asset only helps the holders of said asset. But "appreciation" is always an exchange rate. Appreciated relative to what?
> A deflationary environment explicitly benefits creditors.
And this is where my contention lies. This dogmatic condemnation of deflation ever being allowed to happen. Temporary deflation or even deflation for some extended period of time is not a bad thing.
Economic velocity runs on volatility and not what one currency or asset is doing relative to another. Inflating and deflating exchange rates only increase volatility. But, truly, only if both types of relationships are allowed and are not artificially snuffed out by government and/or central bank intervention.
And you assume that creditors are the only ones holding an asset? Credit is only one kind of exchange. Spending is another. Stock trading is another. They all depend on volatility.
Thus, I am not arguing for inflation or deflation. I am arguing for the greatest amount of allowance for natural volatility.
> in your proposed monetary environment.
I see that you assumed that I was arguing for constant monetary appreciation. I was arguing that there is nothing wrong with monetary appreciation.
It seem that you and others are deadset on arguing that all deflation is immoral.
My above comment mentions the common root of such views.
> Much like it's difficult for newcomers to buy large amounts of bitcoin.
Yes, I should clarify my bitcoin comments. Bitcoin is deflationary relative to USD (where most "newcomers" are coming from).
BUT, to add substance to my point it should also be noted that there are coins that outperform Bitcoin and are thus deflationary in their relationship to Bitcoin. A newcomer holding these would actually have more purchasing power.
I clarify this to stress that at the end of the day: consumer spending, loans, credit, etc. are all trading. And trading is what makes the economy go around. Volatility is good.
> Monetary appreciation only helps
Appreciation of an asset only helps the holders of said asset. But "appreciation" is always an exchange rate. Appreciated relative to what?
> A deflationary environment explicitly benefits creditors.
And this is where my contention lies. This dogmatic condemnation of deflation ever being allowed to happen. Temporary deflation or even deflation for some extended period of time is not a bad thing.
Economic velocity runs on volatility and not what one currency or asset is doing relative to another. Inflating and deflating exchange rates only increase volatility. But, truly, only if both types of relationships are allowed and are not artificially snuffed out by government and/or central bank intervention.
And you assume that creditors are the only ones holding an asset? Credit is only one kind of exchange. Spending is another. Stock trading is another. They all depend on volatility.
Thus, I am not arguing for inflation or deflation. I am arguing for the greatest amount of allowance for natural volatility.
> in your proposed monetary environment.
I see that you assumed that I was arguing for constant monetary appreciation. I was arguing that there is nothing wrong with monetary appreciation.
It seem that you and others are deadset on arguing that all deflation is immoral.
My above comment mentions the common root of such views.
> Much like it's difficult for newcomers to buy large amounts of bitcoin.
Yes, I should clarify my bitcoin comments. Bitcoin is deflationary relative to USD (where most "newcomers" are coming from).
BUT, to add substance to my point it should also be noted that there are coins that outperform Bitcoin and are thus deflationary in their relationship to Bitcoin. A newcomer holding these would actually have more purchasing power.
I clarify this to stress that at the end of the day: consumer spending, loans, credit, etc. are all trading. And trading is what makes the economy go around. Volatility is good.
Aggregate demand and supply is very much affected by currency and commodity appreciation, contrary to what you're saying. Additionally there is volatility, and there is price discovery. Today, right now. Things are already how you want them to be. The dollar depreciates and appreciates against commodities and other currencies all the time.
Bingo! But, I do not see anyone complaining about this "only benefiting the creditors".
> econ 101
To be fair, I find a reference to very weakly approximating models of reality, taught to ignorant and naïve students for the sake of starting them off somewhere, to be slightly disingenuous.
> Appreciation due to contracting supply.
Contracting supply is not the only reason for appreciation. If we take that fact into consideration then your causality arrow of 'low monetary velocity' -> 'supply shrinks' -> 'appreciation' is one of many possible paths. Therefore, deflation is not what causes appreciation, it is in of itself a description of that very appreciation. Again, appreciation RELATIVE to something. You seem to be ignoring this very important fact.
You also created circular thinking. In a prior comment you said the deflation causes monetary velocity to fall, and then you say monetary velocity causes appreciation. Appreciation is where the deflation comes from. So, which is it? Deflation pops into existence and causes monetary velocity to fall? Or a magical appreciation occurs from a slowing monetary velocity and causes deflation to occur?
> In a fractional reserve system
Yes, in a central banking system the 'monetary velocity' is artificially controlled. Almost completely. You can push money into parts of the economy to inflate things at a whims notice. Then everyone loves that the "values" of investment vehicles are bigger than they were yesterday.
So, you are effectively only arguing for the status quo. But the status quo is not working. Is this really your best argument?
> volatility, and there is price discovery
Ah, word games. Even if someone might provide definitional differences, there is no objective real-world difference between the two things.
---
Here is what I argue for:
Not allowing natural (not managed) volatility (or 'monetary velocity') -- MOVEMENT -- is a fool's game. You cannot beat basic game theory that is dependent on the biology of humans. You just can't. There is no fancy economic jargon that can allow you to. There is no monetary policy that will enable you to. You can pitch and sell artificial manipulation of the economy (via economic theories or political ideologies) but you are only pitching bubbles.
Allowing natural periods of deflation in the economy allows for volatility, trade, flux, interest, investment, wins, ... and here is the most important word: losses.
Loss. It allows for someone to actually lose.
These hippie boomers have never had to lose anything in their lives. The artificial manipulation of the markets and the economy reflects this mindset and attitude.
There is more than one currency and that fact alone negates any possible argument against allowing deflation to occur naturally in the economy. If it occurs because of temporary "contracting supply" (of one currency) then so be it.
The dollar, and its associated monetary policy, isn't something that has been perverted by evil external forces. I'm arguing the 'status quo' because thats how it was intentionally designed and thats how it intentionally works. Not wasting my time describing some fanciful alternative perfect system
Asset trading is about as natural to human civilization as you can get. Having a socially accepted intermediary asset is not much beyond that. Simply saying its not a "natural phenomenon" is not a mathematical or scientific self-validating statement. It's just a statement.
> it's their currency.
Yes, and literally anyone can create a currency out of thin air. Other people will use it if they decide to assign it value.
> Its existence is inherently political
No, It's existence is civilizational. It technologically fulfills the ability to have high transaction rates of an increasing population that other assets can not satisfy. the ability to transact more easily and more quickly is what determines the bounds of the potential of an economy. So, of course, all major civilizations have utilized this technological tool for political means. As a way to increase and concentrate power through economics.
This is fundamentally different from intermediary assets being constructed initially as a political tool. Money is technology. It is not politics. Like literally any other technology it can be used politically.
> isn't something that has been perverted by evil external forces
I am not sure what insanity you are trying to project onto me, but I never even came close to implying anything along these lines. You should attempt to avoid fallacious arguments a little harder.
> some fanciful alternative perfect system
You mean like your supposedly perfectly controlled and singular monetary systems with artificial inflation hoses? Have you seen the economy?
If this is your dream economic system then why not live in China with even more inflation and more centralization? Or maybe you already do. Genuine question, nonetheless.
Even with your assumption suppose you accept their offer. The $80 received should in turn be able to purchase something that was worth $100 dollars yesterday. The nominal value may have gone down but the quantity of goods and services you can buy with it is the same.
Deflationary thinking meant everyone expects prices to be lower tomorrow, so no one spent money on needed items and simply waited to make purchases to save money. This slowed down the economy into a death spiral that they still are climbing out of. Mortgages became crushing. You can't get a raise. Interest and deflation work together to make debt nearly inescapable.
The point of money is to be spent, i.e. facilitate the simple transfer of value. An excellent example of the direct damaging effects of deflation is bitcoin. No one spends it. It has utterly failed at its goal to become a primary mechanism to transfer value. Everyone expects its value to keep increasing so it is almost never transferred (to the point that hodling and never spending became a meme). Slowing down the exchange of money is what kills an economy.
The way inflation is calculated is quite flawed from my understanding (they don't include rent/mortgage payments or college tuition - prices of which have exploded in the past two decades).
You are fundamentally misunderstanding the purpose of the modern central banking nonsense that the parrots you are replying to merely repeat without any understanding whatsoever of how absolutely devastating it is to the economic stability of the middle class.
Just for illustration, imagine if you know that you can buy 2 rolls of toilet papers 2 months later for the price of 1 toilet paper today, and you don't have an immediate need for toilet paper, then most likely you'd wait.
Spendings is what drives the economy and it's the circulation and liquidity that help the economy becomes more productive.
This is called a sale and happens all the time in consumer spending. It is a well known phenomenon that many people (not all) will wait to purchase when they have more purchasing power. But it is also well known that a subset of the population will not wait.
I am not sure how you perceive your arguments as being a rigorous support of your position or a rigorous critique against the opposing position. It is truly mysterious.
Money is not wealth. Money is a tool. The goal, at a macro level, is not to have people having big piles of money. Because money, in and of itself, is not that important. What matters is how the money is used. And the more it's used, the better. Money being used is consumption and investment.
What you call "a better system of stock trading" is called a "bond". It's debt and works similarly to how you described except the reward % is typically fixed.
Can you please stop making up your own economics? A currency is an asset. End. Of. Story.
Deflation is a directional property of an exchange rate between a pair of assets.
By "used" you mean traded. And yes trade increasing (of which consumer spending is a kind of trading) is a good thing. You only get that with volatility. This can be created through an inflation but dually it is also created through deflation.
There is nothing wrong or immoral about a particular asset going up or down in price relative to another asset.
This unscientific stance of considering all deflation as immoral is based on absolutely nothing except emotional propaganda.
You have provided exactly zero proofs verifying that any and all deflation in a currency is a bad thing. And you will never be able to provide such a "proof" because it does not exist.
Let's see if you are even capable of constructing a proper intellectual retort. My doubts run high.
Precisely because it did happen a long time ago. None of what is pointed out is new. It is basically celebrating Apple is an US business.
If Monetarism really is being abandoned, I predict unpredictable changes to economic thinking across the board. It was definitely impactful on the way in. I suppose unicorns zooming past the $trn mark is connected too.
The "cash accumulation" aspect of FAANG economies is (IMO) hard to digest in terms of economic theory. Rather that existing to finance economic activity, these companies make stock markets look like they exist solely for liquidity: cashing out VCs, compensating executives, etc. There is no "I need $1bn to build a new factory or something." There is no equity/debt ratio. Most of the texbook (at least mine, from circa 2003) doesn't apply. Apple/etc have plenty of cash, and don't need capital to expand either way. Economics has surprisingly little (new) to say about why dividends aren't happening, the difference between buybacks & dividends or cash accumulation generally.
I can think ways to "story" cash accumulation. Eg, instead of investors getting dividends and buying Vanguard or Bitcoin, FAANGs might as well just buy the securities on their behalf. This could be an argument, but I haven't heard it made. I'm not advocating it, just eg.
A "hostile" story might be that Apple are hogging all the capital that should be available for Tesla or some other company that actually needs capital.
In any case, I suspect there is more pressure to invest big sums than we know.
Certainly, unless they branch out into selling more mundane chips, they would have a problem using the capacity in their fabs for their own chips once those fabs get older.
Sure you can make the arguments against vertical integration, but to "doubt they have the scale" when speaking of the most valuable company in the world, with a product in the hands of billions? If Apple doesn't have the scale, then who does?
That would make owning a fab for themselves uneconomical.
Exception would be if they managed to build a fab that’s better than what others have, but I don’t see them do that, either.
On the other hand, TSMC, without Apple’s money, might not be as strong as it is with it, allowing Apple to beat it, and have the best fab.
However you are correct in that TSMC still owns and operates its older node fabs. Today's cutting edge fab is tomorrow's legacy fab producing no-longer cutting edge commodity parts. This is why Apple won't buy any fabs or fab operators themselves.
I guess as long as Apple thinks they can remain the highest bidder at TSMC and China doesn't invade there is no reason to think their supply is threatened.
https://www.theverge.com/2021/3/23/22347250/intel-new-factor...
Might be.
They can announce this now and change their mind as they please, right? I'm not sure about Apple's track record on things like this, they may be good, but they could just slowly pull or decrease funding, and we probably won't even hear about it in the future, or am I missing something?
Plus the spreading of their small manufacturing fund over several states isn’t going to bring about an American Shenzhen, like with Silicon Valley, it needs to be a geographically centralized hub or nexus to get increasing gains from cross pollination between all of the firms.
Apple needs to be investing to lessen their dependence on Foxconn mainland manufacturing and logistics.
They just had to slip this in there. If they were taxed appropriately on the money over seas we would see an additional $10billion. Being the least scummy in a field rife with tax evasion isn't saying much.
Also...
> Apple’s contributions in the US have significantly outpaced the company’s original five-year goal of $350 billion set in 2018
So it's only upping the amount it had already pledged. So they were already doing it anyway
If you really want to change things then start speaking out against any and all politicians in bed with private actors (for ANY political party, btw) -- not overly-focusing on just "those politicians who disagree with you on abortion" or something else insanely and profoundly silly.
Also, if you really, and I mean truly, despise the way things are then stop complaining on the internet and run for local office? Then if that goes well, run for a higher office? Just an idea. But an idea that the vast majority of us on HN never take seriously.
But since then, Austin, Denver, NC, Nova, Portland, Nashville and others have all done a really good job of actually competing with California for tech industry growth. On paper, Florida seems like it should be really competitive in this space. Good weather, low taxes, business friendly climate, immigrant centric culture, decently low cost of living, good schools, and population ties to the high-skilled NYC area.
So, I'm genuinely curious, because I know there are people on this board who are in a position to make these decisions. If your company considered a satellite campus in Miami or Tampa or the Space Coast and decided to pass, what was the reason? The sticky summers? Lack of topography? Florida Man stereotypes?
> Austin, Denver, NC, Nova, Portland, Nashville
All have great universities in the immediate vicinity which are a nexus for commercial intellect. These metros are roughly 1/3 of the size with probably double on avg. the available tech talent pool.
So it takes $22 million investment to add just 1 job?
Something seems off.
i.e. Say I invest $10M to make a precision machine shop and I employing 5 machinists, as a crude example. Here my goal was to make a machine shop capable of producing precision parts, not to spend $2M/job.
Ever since telecommuting for work took off, the house prices have been spiking.
Disclosure: I have been looking at Elk Grove, Folsom, and other Sacramento suburbs as a possible place to relocate my family and team ... my team and I are not happy with the cost of living in SF, and we can get a lot more bang for buck by moving away.
You can get a 4 bedroom, 2500 sqft house in Elk Grove for about 750,000 now (six months ago it was 500,000). The schools are also quite diverse ... over 30% Asian and Indian.
This tax-break-if-you-locate-here thing is a longstanding scam against politicians by companies.
https://www.nbcnews.com/business/business-news/corporate-tax...
These tax incentives should be structured as follows:
1. Do your payroll and pay your payroll taxes (FICA, Federal and State unemployment, whatever).
2. Submit your payroll tax receipts to the state incentive operation.
3. Get a rebate of some percentage of that payroll tax.
In other words, no tax-break payments until people get actually paid.
This incentivizes the company to do what the state wants: employ people in good jobs. If the company gets a "better offer" from some other place and moves, then the state doesn't get completely screwed over.
Any community with half a functioning government should give tax breaks to get these kinds of jobs from such a reputable company.
Increased homelessness from rapid gentrification
Why do you think domestic investment is so economically useless that it must be a charitable act?
Cupertino is announcing spend. Spending here is better for people here, ceteris paribus, than spending there. If they announced $430bn in new Southeast Asian contracts, there would be a twin top comment lamenting Apple's lack of domestic spending.
GP never implied that it was "useless" at all. Your question (to use some more Latin) is a total non-sequitur.
>there would be a twin top comment lamenting Apple's lack of domestic spending.
Yes, different people have different opinions.
The announcement uses the word investment 17 times. Reading that as a charity pitch requires a few logical leaps.
Companies announce foreign direct investment all the time. Nobody thinks they're trying to look like a charity.
>The accelerated commitment will fund a new North Carolina campus and *job-creating investments* in innovative fields like silicon engineering and 5G technology
other pull quotes from the article
>Apple is doubling down on our commitment to US innovation and manufacturing with a generational investment reaching *communities across all 50 states*
>Apple is the largest taxpayer in the US and has paid almost $45 billion in domestic corporate income taxes over the past five years alone.
> designed to prepare students for careers in hardware engineering and silicon chip design — to engineering programs at *Historically Black Colleges and Universities* across the country.
>bringing *clean energy and high-paying jobs to local communities across the country*.
If someone wants to see that as charity, it speaks more to them than anything else. (And claiming your patronage was an act of charity would be rightfully seen as a diminishment of said business.)
Again, a non-sequitur. Even if they read "investment" as "tea party" 17 times, they still never said or implied that it was useless.
The Apple article is obviously trying to paint the investments as acts of goodwill. Not many people would expect anything else, it's just good PR. "Charity" might be an exaggeration, but can't you see why it could rub people the wrong way?
that's not what op (the person you're responding to) is saying at all. they're simply saying that apple disguises its infrastructure spending as charity and that that's off-putting. in fact it's not charity and furthers their own goals.
it'd be like me claiming to be a philanthropist because i had to a build a road connecting my factory to my mine that incidentally connects towns along the way. note this is example is right on the nose because this is exactly what corporations do.
Except it doesn't. It uses the word "investment" 17 times in the announcement. If someone reads this as a charity pitch they're doing mental gymnastics.
Apple is not even doing the whole "Made in the USA" schtick, where companies imply they're taking patriotic pain for the good of the country. This is fully pitched as a competitive play. An investment to yield returns.
This announcement makes it sound like it's something amazingly special they do. But in fact, any company throughout history has invested a certain percentage of their revenue, just like Apple is now doing.
They aren't claiming to be investing more or less than anyone else. They are simply advertising their plans.
I think Apple's "amazing" infomercials are over the top, but this press release seems anodyne.
People talk about companies the same way a hunter-gatherer applies animism to trees for example. Companies are not people, they can’t be cynic nor greedy they just are what they were created to be. Profit machines.
Apple is extremely good at being. High returns on invested capital, huge moat, etc...
If they did their massive campus in Eastern Europe they would get a lot of cheap smart talent, cheap building and probably a favourable tax treatment (if they needed even more of that).
Replace with Canary Islands, Cyprus or Malta if you want somewhere with nice weather.
This is part PR, part gaining political favours.
Tax breaks stimulate innovation and investments.
Also, it is a very low level misconception that paying local taxes is how you contributing to the local community. No. Investing is already contributing to the local community. The business will build campus there, and hire people there, and also increase other local businesses surround the campus. And those people work for them pay income taxes there and also pay consumer taxes there. Every local government understand these, that's why they want to attract investments and give their tax breaks, because investments alone bring benefits to the local community.
It would be extremely stupid for any local government to say: Hey we don't you invest hundred millions in our community, unless you pay full taxes. Lol.
Phrases....
That's the point. It isn't. The OP was asking why it's therefore being sold as one.
Companies are more than welcome to make themselves at home iff they pay their dues, and should not be welcome if they don't.
What is really trickle down for the society? The dead loop between more taxes and economic stagnation.
Companies will seek the lowest taxes in an area that suits them. If they're building in America, it's because it behooves them to build in America. There are lots of places they can go to lower taxes, but they're not competitive.
So you still have companies who are VOLUNTARILY building industry in places with high taxes, because it behooves them. Can you see how a race to the bottom in this regard is damaging? They're already committed to paying high taxes, its just a matter of how high. So—do you really want to be the place that cheats yourself out of the most income, for a company that really doesn't care if they settle in your county, the next one over, or the one across the country?
The minute you become noncompetitive, the company will move, and your countrymen are the people who paid for it. The real winner? the company, who got to hang onto more of their vast profits. :-) Apple committed almost $100B a year. And places are fighting over... how much tax revenue? there's plenty of room for fair taxation.
You don't get rich by giving things away (unless if you've figured out how to make this possible—in which case, please ready a room for me :-))
> I'll wait for an external audit of whether they're paying all the relevant ..
They will be paying minimum legal taxes possible not maximum possible. If this is something one need to feel outraged they can start early and not wait for reports/audits.
If this announcement was in India or China, folks would be grabbing pitchforks that Apple is sending jobs overseas. So they’re bring net new tech jobs here, and your response feels like “damned if you do, damned if you don’t”
I mean, I wish it were not, I wish it were normal for U.S. business to invest in the U.S., but here we are.
Jobs was talking about cheap manufacturing jobs in China.
They definitely look nicer than most public cities.
Your suggestion here solidifies that in my mind. We will live on private campuses owned by the corporation for which we work. It will be a utopia in there. And we will have no privacy. And we will be rated. And we will love being quantified. And outside those walls the world will decay.
Companies have tried their hands at being the government in the past, and the outcome has always been.... something less than utopian.
One concern I have is regarding IP and open source works. I recall an article posted to HN a while back where someone who had got a job apple was required to give up a project they had worked in outside work.
That's just a scaled-up version of pink-washing - Look, apple is so great, we can't dismantle it for being a monopoly! Now run and do something bad to the real villains like Amazon!
They can start by honestly and fully paying their taxes.
It's called an office park
$57bn of that was income [1], so about 40% of spend. Which lines up with the 41% of revenues Apple gets from the U.S. [2].
[1] https://www.apple.com/newsroom/pdfs/FY20_Q4_Consolidated_Fin...
[2] https://www.apple.com/newsroom/2020/10/apple-reports-fourth-...
The big market distortion is coming. Get prepared for absolute insanity.
It is not that far-fetched to think that in a not so distant future China consider the USA (and Europe) as sources of cheap manufacturing.
"0 CNY" -- Do you not consider expansion of credit by state-owned commercial banks equivalent to "printing money"? I do. It causes inflation through rising housing costs. (All major central banks now include housing costs in their inflation figures.)
The more likely scenario of the future of "cheap manufacturing" is (near) total automation in highly developed countries with (near) zero-cost green energy. That means their carbon intensity will be very low. Thus, carbon (import/export) taxes will be very low. Why sew socks in a country with very low labour costs, but coal-generated electricity? A machine/robot can sew the same socks using green energy in a factory located 100km outside a major city in a highly developed country. As an example: Look at Fast Retailing (Uniqlo, etc.), headquartered in Japan, but truly global as a retail brand. They are a world leader in highly automated manuf. of clothes. (Same for Zara.) I can imagine they will be one of the first to aggressively "on-shore" from developing countries to Japan, where clothes will be (near) 100% robot-made. I have heard much the same about Adidas and re-shoring shoe manuf. to Germany with (near) 100% automation.
We see rapid asset inflation across the board. Check recent commodity prices across copper, lumber, food, water etc. Everything has been rising dramatically during the period that the world has been practicing what you call 'Quantitative easing'. Inflation isn't just related to Forex if all the worlds currency's are inflating, albet just maybe faster than the USD. And the only reason the US is not inflating faster than the rest of the world is because the IMF is based in USD.
No, we aren’t.
> We see rapid asset inflation across the board.
“Inflation”, without modifiers, refers to consumer price inflation (final goods and services). Asset inflation is a different thing, as is monetary inflation. Monetary inflation can contribute to both asset inflation and consumer price inflation, but those two outcomes are somewhat in tension; asset inflation isn’t pent up potential for consumer price inflation, but an explanation for why consumer price inflation isn’t happening and isn’t likely to happen without change in the fundamental economic processes.
Specifically, monetary inflation driving asset inflation but not consumer price inflation is a sign that the money is going to people is marginal use of additional access to money is to invest rather than spend, absent changing the distribution, the outcomes aren’t going to change.
“retirement” isn’t a good or service.
Childcare has inflated slightly faster than general inflation over the last 5 yeara (2.22%/yr vs. 1.86%/yr).
Healthcare has inflated a bit faster (medical care @ 2.46%/yr, hospital and related services @ 3.89%); health insurance, has been notably higher (in large parts due to the federal government failure to follow the law on the ACA) @ 5.98%/yr.
Education has inflated much more rapidly than general inflation, @ 29.15%/yr.
So, what? That’s how aggregates work. Obviously, we could just as easily find a list of consumer goods and services where inflation is lower than general inflation. That wouldn’t prove that inflation is even lower than reported, and neither does higher inflation in some sectors prove that inflation is higher than reported.
Any time there is price dispersion within the goods and services of the market basket, it's likely that the basket composition itself is changing too. CPI has no way of responding quickly to this change.
"The price of eggs." What next: Will you talk about low interest rates "punishes savers"? What portion of wages do highly developed countries spend on food? (Exclude [South] Korea and Japan, which are extreme outliers.) The answer: Vanishingly small amounts. And, it continues to fall each decade.
"[P]rices of housing, healthcare, education, retirement" -- is this true in socialist market economies in Continental Europe, like Germany, France, Italy, Austria, Switzerland, Netherlands, Belgium, Spain, Portugal, Sweden, Finland, Denmark? No, it is not. I will admit: Life for middle class (and below) in the UK is surely worse in the last decade for all of the above that you mention.
"IMF is based in USD" -- Are you not familiar with special drawing rights (SDR)? Please explain if I do not understand your comment.
>Are you not familiar with special drawing rights (SDR)
Not really to be honest? but i don't get your point in bringing it up. I know the US has the highest SPR weight by far and that the IMF was created by the united states after we got off the gold standard. My point was that the US has a massive influence on a standard thats supposed to be 'International' and thus controls the Forex and thus 'relative' Inflation. (Our inflation in regards to other currencies as opposed to some real meaning of the word inflation)
To be clear about SDR: US has 42%, EU has 31%, China has 11%, Japan has 8%, and UK has 8%. Is 42% > 31% "highest SPR weight by far"... ? All the non-US majors combined... US does not looks so big. It has been falling for decades as the world economy re-balances.
* Inflation.
* Re-evaluation of the exchange rates
* Supply issues if the above two do not happen
Time will tell :-) But the main reason it hasn't happened yet is because the money that has been printed (or whatever) has not made its way to the real economy yet, it has mostly gone to the financial markets. When people will try to use that money for real, that's when sh* will hit the fan
Also, many of us enjoy and still want direct in-person collaboration. If you don't and your job doesn't require it, then good for you. Enjoy, but there is no need to project that onto everyone else.
https://americansfortaxfairness.org/issues/corporate-taxes/h...