Rough figures on Apple

So, Apple is boasting that it's going to pay $38 billion in tax when it brings its overseas pot of money back to the US.   (Ireland and Europe sound worried that this means they miss out on the tax they've been chasing from Apple for years - showing that they've been played for suckers, I reckon.)  

Trump and Republicans are crowing that this is what happens when you reduce corporate tax rates by 40% (from 35% to 21%).  

But wait a minute:   how much tax does the US collect annually from companies?   According to this site, in 2015, it was $342 billion, roughly.     So, using that figure, a 40% drop in the amount of tax collected due to Trump's new rates would mean revenue of $205 billion in lieu of $342 billion.   A drop of $137 billion (!). 

Add in $38 billion from Apple, and that brings revenue back up to $243 billion, still down to 71% of the tax collected in 2015. 

Let's be (what I suspect is) generous and allow other companies paying (say) a further $30 billion in tax on monies coming home to the US.   That would bring it up to $273 billion, or 80% of the 2015 tax revenue.*

Of course, Apple investments in the US should generate more personal income tax from workers, (and payroll taxes?) so there will be some improvement on that side of the ledger. 

But, don't these rough figures indicate that the gain to US revenue by big, but one-off, repatriated profit tax payments like those from Apple will come no where near making up for the lost revenue from a permanent massive corporate tax rate cut?

*  My guestimate might not be far off - according to this article, it's been estimated that repatriation taxes could bring in $338.8 billion, but over ten years.   If it was spread evenly, that would be $34 billion or so a year.


PS:   Incidentally, any renewed investment by Apple in the US is, I would imagine, hardly likely to benefit the ageing, white, non college educated Trumpsters in rustbelt areas who find it hard getting work, or well paid work.   What's the bet that Apple will in fact, soon enough, be pressing Trump to ease up on his anti migration vibe so to let in the skilled foreign workers that they need for their new investment?

And Slate points out how people are easily misled by Apple PR machine, when they are spouting "billions and billions":

The press release predicts that between its “current pace of spending with domestic suppliers and manufacturers—an estimated $55 billion for 2018—Apple’s direct contribution to the US economy will be more than $350 billion over the next five years.” In other words, Apple will keep buying stuff from other U.S. companies. This is not a patriotic act of charity. Apple is literally saying it will continue business as usual. That alone accounts for $275 billion of its $350 billion forecast.

As for the rest of that total? In a mystifying bit of self-aggrandizement, the company is counting its $38 billion repatriation payment as another “direct contribution” to the U.S. economy. This is money they are required to pay by law. “A payment of that size would likely be the largest of its kind ever made,” the company helpfully notes. This is only true because Apple spent years making money hand-over-fist while doing everything in its power to avoid taxes. 

Finally, we get to the company’s actual plans to invest in the U.S. Here, we learn that “Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one,” which will initially “house technical support for customers.”

PPS:  I know that tax, especially (it seems) the US tax system, is complicated, and it's likely I'm missing something significant.   It is just "rough figures" after all...