Regardless of ideology, we should all welcome Apple’s decision to pay around $38 billion in taxes in order to repatriate hundreds of billions of dollars in overseas cash holdings.
Announcing the decision on Wednesday, Apple CEO Tim Cook also pledged major new investments in job creation and a second operations base that will add 20,000 jobs. As part of what Apple says will be a $350 billion boost to the U.S. economy, it will invest $10 billion in capital projects over the next five years.
There’s no other rational way to greet this news other than with a smile and celebration. Of course, the smile primarily belongs to President Trump and House Speaker Paul Ryan who were the drivers of the recent tax reform effort to reduce corporate taxes from 35 percent to 21 percent.
At the time and since, Democrats have declared that the corporate tax cuts represented a payoff that would benefit only the richest companies and their dominant shareholders. Instead, as Apple is showing, political empowerment of businesses is leading to capitalist empowerment of workers.
Sure, the Left will say that 20,000 jobs is no big deal, and that $38 billion in new tax receipts pales in comparison with the amounts that a retention of the 35 percent corporate tax rate would have brought in to the federal coffers.
But this argument is wrong for two reasons. First, it ignores the fact that Apple is far from the only major company responding to tax reform by investing in the future and in American families. Consider Walmart’s decision to increase its basic starting wage to $11 an hour and to provide a one-off payment of between $200 and $1000 to employees. AT&T, Boeing, and Wells Fargo and others have all made similar pledges. Without going any further, we're already talking about millions affected.
Yet the key point here is not that these companies are acting this way because their boards and CEOs have suddenly become incredibly kind people. Rather, it's because they sense a new space to divert tax savings to their frontline services rather than to legions of tax lawyers and attorneys. They sense a business environment ripe for long-term investment in the pursuit of long-term productivity.
Second, the Left fail to recognize that the U.S. is suddenly once again becoming the world's go-to place to do business. Where the Obama administration hamstrung businesses with an ever-growing minefield of regulations, the Trump administration is breaking down the walls of inefficiency and encouraging global multinationals to expand or set up shop here in the U.S.
It’s a big deal. Considering the U.S. market size, our access to the globalized economy, our high living standards and our now unashamedly pro-capitalist agenda, tax reform should bring hundreds of billions in new investments to our shores. Trump has now done what Cook's predecessor, Steve Jobs unsuccessfully begged Obama to do many years ago.
So yes, the Left will continue to complain that abandoning one of Earth's highest corporate tax rates has denied government the funds to invest in a better future. But their argument is a very weak one.
The divergent history of capitalism and socialism proves that the former has done far more good for far more people. Now we're getting a new chapter of historical proof to that effect.