Donald Trump today took to a podium in Indiana to wax poetic about all the ways in which his new tax plan will benefit us common folk. The plan promises to deliver âhistoric tax relief to the American people,â which is true â so long as you subscribe to the idea that corporations are people, like the American government does.
In reality, itâs lettuce on a shit sandwich, only now with added mayo to further extend the illusion of edibility.
At its surface, the plan sounds like a good idea: allow companies to bring funds held overseas back to the US at a decreased tax rate.Â Apple, for example, would bring back around $246 billion â around $60 billion of which is owed in taxes. We donât have exact figures yet, but if we operate under the assumption of 10 percent â a figure Trump gave on the campaign trail â companies would save a bundle when you consider theyâre currently on the hook for 35 percent.
For Apple, the benefit is clear: the company could now pay $20 billion in taxes instead of $60 billion (remember, these arenât hard figures), and keep their cash on US soil. Tucking it away in the US, while once seen as a liability, could actually save the company money over the long term, especially as the EU continues to crack down on the practice of squirreling funds away in countries like Ireland.
The reality, though, isnât that simple.
A 2011 Senate investigation found that approximately half of the income held overseas is invested in US treasuries or the US stock market. The funds are owned offshore but invested here, meaning: thereâs no tangible benefit for the US economy to bring these funds back. For all intents and purposes, theyâre already here.
And what Trumpâs not telling us is that weâve already been down this road.
In 2004, Congress attempted the same thing and saw an influx of $312 billion in gross revenue repatriated to the US.Â According to the…