What Apple’s CFO said about Trumponomics (audio)

He’s for it, except where he’s against it.

Excerpts transcribed from Luca Maestri’s remarks at Tuesday’s Goldman Sachs technology summit.

On repatriating cash (at the 14:02-minute mark):

We have been pretty vocal for years now that the U.S. tax code needs to be reformed. The situation that we’ve got right now is not good. Corporate tax at 35%—it’s the highest tax in the world. It’s punitive for U.S. companies. It creates international tensions across jurisdictions because of this deferral system that is in place in the United States.
So we’ve been saying for a number of years that we really need corporate tax reform, and we think there is broad agreement around the concept that tax reform should happen.

There is a good chance that something is going to happen this year. And obviously one important aspect is the repatriation of accumulated earnings. And of course  we have lot of that overseas because two thirds of the company’s revenues are overseas.

Obviously, we would be looking to bring the cash back. That would give us additional flexibility around our capital return activities. You know we’ve got this unprecedented capital return program—we’ve already returned $200 billion since we started it four and a half years ago. And until reform happens we will continue to do that. We’ll provide an update in the spring on that program.

If and when reform happens, it will give us more flexibility. and we could do more and more quickly.

On the effects of a border tax (21:19): 

Without getting into specifics because we haven’t seen written legislation around it, it’s hard for us to imagine that a border tax would be good for the U.S. economy because it is a tax that would end up burdening the end consumer. And because it presupposes as an idea the fact that the dollar would have to appreciate very significantly versus where it is today, which is already too strong.

And so when you think about the competitiveness of the U.S. economy, when you think of jobs creation in this country, when you think about investments in this country, it doesn’t feel like that would be a positive outcome.

On moving Apple’s manufacturing and supply chain from Asia to the U.S. (22:05):

Again, it’s very very difficult to speculate at this point. One of the points we are making in Washington is that we have been a very large contributor to the U.S. economy during the last decade. We’ve made billions of investments in the United States and in the last 10 years we’ve created about 2 million jobs in this country—in the developer community, in our retail stores, in our call centers, and through the supplier chain.

I think it’s important to keep that in mind, that those are investments that we will continue to make into the future.

You know very well because of your job that essentially the supply chain for the tech industry is not in the U.S. today.

Transcribed by hand from Maestri’s interview with Goldman Sachs’ Simona Jankowski. Audio streaming here. Corrections appreciated.

2 Comments

  1. John Kirk said:

    “it’s hard to for us to imagine that a border tax would be good for the U.S. economy because it is a tax that would end up burdening the end consumer. And because it presupposes as an idea the fact that the dollar would have to appreciate very significantly versus where it is today, which is already too strong.”

    I too have a hard time seeing how a border tax would be a good idea because it presupposes that 250 years of economic theory and experience do not exist.

    1
    February 15, 2017
    • Richard Wanderman said:

      Unfortunately the person who wants the border tax doesn’t read or know much about history. Nor do the people who elected him, it seems.

      1
      February 15, 2017

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