Editorial cartoon 1/31/18

I've never been a fan of big corporations like Apple that have made a habit of finding loopholes to avoid paying their fair share of taxes like the rest of Americans have to do.

That said, I understand the "just being good businessmen" alibi to defend why they stockpile billions of dollars in offshore accounts to escape the "onerous" U.S. corporate tax rate, until a few weeks ago, of 35 percent.

The Apples of the world never did pay 35 percent, of course. Some of them, GE being the prime example, actually got by without paying any corporate tax on U.S. income.

What's maddening is that the U.S. government — meaning its taxpayers — invented and developed the internet, built the infrastructure and in many cases provided tax-free incentives and capital so that these corporations could get their start in the first place. And that's in addition to the trillions spent bankrolling the military, the transportation network, airport and border security, financial safeguards and the dozens of other benefits that they receive along with the rest of Americans.

But they provide jobs is the typical counterargument, supposedly justification for not paying taxes as if just the working people should foot the bill for a government that's helped make millionaires and billionaires and feather the nests of Wall Street money changers.

Now that the corporate tax rate has been reduced to 21 percent, Apple and others are bringing back some of the money they've stockpiled in countries that haven't spent a dime to bolster their financial well-being, and we're supposed to be grateful and applaud them for helping out their fellow Americans.

And, look, as Donald Trump proclaims, they're using that money to pay bonuses and raise pay for their workers, proving that the tax cuts are making America great again.

Let's take a closer look.

The bonuses — Apple announced it was giving employees $2,500 in stock grants, Walmart boasted it was giving some workers (20-year employees) $1,000 bonuses, and conglomerate Bank of America also handed out $1,000 bonuses — have been big public relations coups for the corporations. Trump himself has praised them from his bully pulpit and House Speaker Paul Ryan has used them as proof, as he and other Republicans claim, that tax reform is working.

The free publicity these corporations have received in newspapers and on TV is priceless. Polls are already showing that the popularity of the tax cuts has improved as a result.

But for the most part, many economists say, the windfalls to employees aren't at all representative of the tens of billions that the new tax law means to their employers.

The New York Times reported that Bank of America's bonuses, for instance, will cost the corporation $145 million in 2018 or about 5 percent of the roughly $2.7 billion in tax savings it is expected to realize during the coming year.

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"Apple's bonuses will cost $300 million, a fraction of the $40 billion, at least, that the tech giant is saving from a single provision in the new law, which allows it to return earnings held overseas at less than half the rate it would have paid under the old system," the paper reported.

There's already strong evidence that much of the tax cut windfall will, as it has in other attempts to bring home money stashed abroad, go directly to shareholders either through increased dividends or buybacks of stock.

It will take months, if not years, to accurately gauge the impact on the middle class that this Republican tax cut will have.

But one thing's already clear: Someone must make up for the $1.5 trillion shortfall to the U.S. treasury that the tax cuts will cause.

And you can bet it won't be the corporations stepping up to help pay their fair share.

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com and on Twitter @DaveZweifel. Zweifel is the co-author, along with John Nichols, of the new book "The Capital Times: A Proudly Radical Newspaper's Century Long Fight for Justice and Peace," published by the Wisconsin Historical Society Press. It's available on the Historical Society website, and at Amazon and Barnes and Noble.

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Dave is editor emeritus of The Capital Times.