Big companies like Apple, Google, and HP are looking for a way to bring back huge stashes of offshore cash to the U.S., at a low tax rate. It seems Trump may offer a solution.
Trump has suggested a tax rate of 10% instead of the 35% standard corporate tax. This would generate new jobs, bring back ones we’ve lost to competitors abroad, and strengthen the U.S. economy. These corporations would prefer spending the money in their offshore accounts on home soil.
HP’s CEO Meg Whitman agrees with Trump on this issue. “It would make America a more tax competitive place to be. And we, like so many companies, not just tech companies, we have a lot of cash offshore, which we would bring back, which we would either use for investment or to share buyback or repurchase.
So those two things would be very helpful to Hewlett Packard Enterprise and I think business in general.”
Corporations often wind up with billions in offshore accounts, because the U.S. doesn’t tax the income made by companies, when generated overseas. The government can only tax the money if it’s spent in the U.S. on things like dividends, share buybacks, and acquisitions.
Trump Talked with Apple CEO, Tim Cook and Microsoft Founder, Bill Gates
During an interview with The New York Times, Trump said that Tim Cook and Bill Gates called him after the election to congratulate him on his victory. Apple’s CEO, Tim Cook, was supporting Hillary Clinton before the election. He even hosted a fundraiser for the Democratic candidate.
Trump mentioned Apple during his campaign, threating the company with taxes on imports from China. “I’m going to bring jobs back,” Trump said. “I’m going to get Apple to start making their computers and their iPhones on our land, not in China. How does it help us when they make it in China?”
Things Changed After the Latest Call
Trump said, “I was honored yesterday. I got a call from Bill Gates, a great call. We had a great conversation. I got a call from Tim Cook at Apple, and I said, “Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.”
He said, “I understand that.”
I said, “I think we’ll create the incentives for you, and I think you’re going to do it. We’re going for a very large tax cut for corporations, which you’ll be happy about.” But we’re going for big tax cuts, we have to get rid of regulations, regulations are making it impossible.”