Apple is moving money back to the US, and creating jobs. Can the US worker who will benefit thank Donald Trump?
It appears to boil down to tax. In economic theory there is a concept known as the Laffer curve. The idea works like this: if you were to increase tax to 100 per cent, you would kill enterprise, and your tax take may fall down to zero. If you were to cut tax to zero per cent, clearly you would generate no revenue from taxation. So there is an optimal point; a point when an increase in the tax rate would lead to less tax revenue, a cut in the tax rate would lead to less tax revenue. You can draw a graph to represent this, and the graph is called the Laffer Curve.
One of the big contentions between left and right wing thinking, relates to where on the Laffer curve we are supposed to sit.
President Trump clearly thinks our position on the Laffer curve is such that tax cuts would not only stimulate the economy, but this stimulation would create more tax revenue, such that the tax cut would pay for itself.
So he is cutting taxes paid on US company profits, and has changed the rules on how money kept abroad is treated for tax purposes.
And now Apple, that boasts over $200 billion in cash holdings held abroad, has said it is going to pay an extra $38 billion in tax in the US and invest $30 billion into the US, creating 20,000 new jobs.
Apple says that its new investments, in combination with its ‘current pace of spending with domestic suppliers and manufacturers’ will give the US economy a $350 billion boost.
Meanwhile, according to a survey from the US Federal Reserve, there is a shortage of labour across the US – US companies are losing business because they cannot find the staff to increase output.
Apple says that it is spending $10 billion on new data centres.
But this begs the question, who will be the people that provide these extra 20,000 new jobs – immigrants, perhaps?