2.6 Trillion, that is how much is estimated to be sitting overseas by American based companies like, Apple. High taxes have prevented them from bringing this money back into the United States. Now you might have heard in the news lately that Trump wants to hand corporations a “sweet tax deal”, to bring back some of this money. Trump and his supporters believe that this will help boost the growth of the economy and “Make America Great” again. We here at Orca, swam around in Donald Trump’s Tax plan to find out what he possibly plans to give the corporations and have some predictions on what companies like Apple would do with the money they bring back. 

Highlights Of Donald Trumps Plan 

• Lower corporate tax rate from 35% to 15%

• Lower the tax rate on profits overseas to 10% 

The Trump cabinet is hoping that these incentives will bring some of the 2.6 trillion that is overseas back to USA, and they are not wrong in thinking this, but are these sweet deals going to make companies like Apple build their products in the United States? 

Corporations are going to do what is best for them (and their stockholders) at the end of the day, and the our prediction is that companies will spend that money on buying back their own shares.  

Stock buyback: When companies purchase their own shares from the open market using their own excess cash. This gives a perceived look of companies earnings doing better, and that can also increase a company’s stock price and possibly future dividends.

This would be in the best interest for the company as they are not sure what the economic climate will be like and want to protect their potential earnings and stock prices. I mean, you would not invest in a new employee’s and a factory if you didn’t know what the future economy was going to be like.  Instead companies may use some of the other excess cash to invest in R&D, acquisitions, and other investments. 

So in theory the Trump policy for bringing back money to America sounds great, but there is no real way of enforcing the companies to use that money to “create” jobs. Trump needs to ensure companies what the future economy will be like to give confidence to these companies to create new jobs in America. Are we making America great again? or companies great again? Only the future will tell.