During his first State of the Union on Tuesday, in between cloying pleas for Democrats to help build his dumb wall and confused references to “beautiful clean coal,” President Donald Trump once again promised the country that tech giant Apple would be investing a badly needed $350 billion in the U.S.
The SOTU is one of the presidency’s biggest platforms, so this is probably the first time millions of people have heard Trump repeat the claim that “Apple has just announced it plans to invest a total of $350 billion in America, and hire another 20,000 workers.” As might be expected, it’s just not true! Trump, a supposed business genius, is mistaking two very simple concepts: repatriation and investment.
Here’s what actually happened. For a very long time, Apple has been hoarding hundreds of billions of dollars overseas through a complicated tax avoidance scheme that allows it to dodge taxes in numerous countries. At the same time, Apple has insisted that it wouldn’t repatriate that money to the U.S. unless it gets a sweetheart deal amounting to far less in taxes than it saved by hoarding the pile in the first place. Apparently the massive handout to the rich cloaked as a middle-class tax cut congressional Republicans passed in 2017 qualified, and earlier this month Apple did indeed say it would contribute $350 billion to the U.S. economy over a period of five years and hire over 20,000 people.
But Trump has jumbled this all up. First of all, Apple’s overseas cash pile in recent filings stood at just $252 billion, not $350 billion, and if the company’s figures are to be believed, it’s getting away with paying taxes of just $38.8 billion or 15.5 percent on that $250 billion.
Apple itself appears to be playing some weird word games to exaggerate how much of that it’s actually pouring into hard investments. As the Verge noted, subtract the $38 billion tax payment and Apple has only laid out plans for around $37 billion in anything that could be called a new investment:
According to Apple’s press release, just $75 billion of that total number will come from capital expenditures, new investments in manufacturing, and its repatriation tax payment, which could imply that the rest of the number is simply the effects of a company as large as Apple having its regular impact on the US economy through its normal growth and spending.
That’s why, in its press release, Apple said its “direct contribution to the US economy will be more than $350 billion over the next five years,” not that it is actually investing $350 billion. How Apple defines “direct contribution” is anyone’s guess and probably the company’s prerogative.
In return for Apple being allowed to move its Scrooge McDuck-style pool of gold coins back here for a pittance, the company has promised to make a token investment and Trump gets to play up its sound bites. The $350 billion number is bullshit, but hey, everyone rich wins! I think we can all agree that’s what really matters here.