As I am led to understand it, this transaction would soon result in a $31B deposit (15.5%) into the Treasury account.
Hard to see the deficit going up under these conditions of "repatriation" unless the govt starts to increase withdrawals by the same type of amounts; which isn't going to happen as they think we are "out of money!".
"Deficit too small!" crowd and the "Trillion Dollar Deficit!" club (which btw is EVERYBODY...) might see some exploding heads...
Dude. https://t.co/zY3gRC30UE— Breitbart News (@BreitbartNews) January 4, 2018
5 comments:
It's not foreign cash
Surely, it's an asset swap from the treasuries account at the FED to the reserve account at the FED.
So then what will apple do with it ?
If they spend it all into the economy which is highly unlikely then it will generate more taxes than that because taxes don't stop after the first use.
None of this Gives the Treasury more money to spend. They are more than likely going to buy their own stock with it.
So what's your thought process on this Matt ?
Step by step please.
Prior to the new tax law, these balances in the offshore securities accounts were not taxable... so now with the new Trump tax law, they are taxable at 15.5% .
They have a few years to do this but this report implies sooner rather than later...
So when the transaction is over, Apple US has 169b and the TGA will have an additional 31b so that would make the deficit 31b lower for any fiscal interval of interest...
It doesn’t directly effect fiscal policy but for us we can look at it that they will think they have more munnie and perhaps the deficit scolds will lose some political capital...
All of the universe thinks the deficit is going up by 1T meanwhile Trump is balancing the budget... this should be fun to watch if it goes down like this...
“None of this Gives the Treasury more money to spend“
I would say yes it does...
Taxable at 15% assuming they are not "expensed" on stock buybacks, executive bonuses, lobbying, accelerated depreciation, deducting stock options issued to execs, tax inversion, earnings stripping, etc., etc., etc. Consult your corporate tax professional.
When the statutory rate is 36% and the effective rate is 15%, lowering the statutory rate to 20% puts the effective rate at -5% (all other things being equal).
This bill would not have passed if it wasn't going to be a windfall for corporate interests.
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