On top of all the lies from the democrats and their PR arm called the MSM, we have the republicans falling for keeping unfair taxes.
The Apple ‘Windfall’ That Isn’t
It’s hard to keep up with all the false tax claims, but this one is a doozy.
The Editorial BoardDec. 8, 2017 6:52 p.m. ET
The GOP is moving toward a tax-reform victory, which means the political attacks are increasing in volume if not logic. A contender for the least accurate claim is this week’s report that the legislation would produce a $47 billion “windfall” for Apple.
The U.S. has one of the most punishing corporate tax rates in the world, with its 35% federal rate and an average of close to 39% including state and local levies. The land of the free is also one of the only jurisdictions that taxes income when it returns to the U.S. after it’s been taxed where it’s earned. The rest of the world has reduced corporate rates—the OECD average is about 24%—but the U.S. hasn’t caught up.
The result has been that companies have stashed some $2.5 trillion in cash overseas, with little incentive to bring it back to the U.S. at the 39% rate. Apple alone has some $252 billion abroad. They and others even find it more economical to borrow at home instead of moving the money back for productive uses such as investment and hiring.
The GOP plan would enshrine a 20% top corporate rate and a permanent territorial system that taxes income where it is earned. The Republican plan also includes a one-time deemed repatriation rate on earnings now held abroad. The House’s 14% rate for cash is what President Obama proposed in 2015, and the Senate’s rate is 14.49%. The “deemed” rate means that companies must pay that rate on income previously earned overseas but so far untaxed in the U.S.
Enter the Financial Times, which says that Apple under the current system would owe $78.6 billion in taxes but under the GOP plan would pay $31.4 billion. The $47 billion difference is what it calls a “windfall” for Apple.
But this ignores that under the current system Apple will pay $0 in taxes on that billions overseas because it has no known plans, and little incentive, to return the money to the U.S. Under the GOP’s deemed repatriation alone, Apple would pay more than $30 billion in taxes. In other words, the real windfall is the $30 billion in tax revenue that the U.S. Treasury otherwise wouldn’t have.
This is the latest of many false claims that corporations are the sole beneficiaries of the Republican tax plan, even though the GOP agenda includes “base erosion” rules and many other clamps designed to address current tax loopholes and prevent future corporate tax trickery. Whether the media attacks on the Republican tax bill represent economic illiteracy or ideological tendentiousness is a judgment we’ll leave to readers.
The Apple ‘Windfall’ That Isn’t
It’s hard to keep up with all the false tax claims, but this one is a doozy.
The Editorial BoardDec. 8, 2017 6:52 p.m. ET
The GOP is moving toward a tax-reform victory, which means the political attacks are increasing in volume if not logic. A contender for the least accurate claim is this week’s report that the legislation would produce a $47 billion “windfall” for Apple.
The U.S. has one of the most punishing corporate tax rates in the world, with its 35% federal rate and an average of close to 39% including state and local levies. The land of the free is also one of the only jurisdictions that taxes income when it returns to the U.S. after it’s been taxed where it’s earned. The rest of the world has reduced corporate rates—the OECD average is about 24%—but the U.S. hasn’t caught up.
The result has been that companies have stashed some $2.5 trillion in cash overseas, with little incentive to bring it back to the U.S. at the 39% rate. Apple alone has some $252 billion abroad. They and others even find it more economical to borrow at home instead of moving the money back for productive uses such as investment and hiring.
The GOP plan would enshrine a 20% top corporate rate and a permanent territorial system that taxes income where it is earned. The Republican plan also includes a one-time deemed repatriation rate on earnings now held abroad. The House’s 14% rate for cash is what President Obama proposed in 2015, and the Senate’s rate is 14.49%. The “deemed” rate means that companies must pay that rate on income previously earned overseas but so far untaxed in the U.S.
Enter the Financial Times, which says that Apple under the current system would owe $78.6 billion in taxes but under the GOP plan would pay $31.4 billion. The $47 billion difference is what it calls a “windfall” for Apple.
But this ignores that under the current system Apple will pay $0 in taxes on that billions overseas because it has no known plans, and little incentive, to return the money to the U.S. Under the GOP’s deemed repatriation alone, Apple would pay more than $30 billion in taxes. In other words, the real windfall is the $30 billion in tax revenue that the U.S. Treasury otherwise wouldn’t have.
This is the latest of many false claims that corporations are the sole beneficiaries of the Republican tax plan, even though the GOP agenda includes “base erosion” rules and many other clamps designed to address current tax loopholes and prevent future corporate tax trickery. Whether the media attacks on the Republican tax bill represent economic illiteracy or ideological tendentiousness is a judgment we’ll leave to readers.
