How Will Tax Reform Give You a $4,000 Raise?
Oct 17, 2017
RUSH: Okay. Clarification on the $4,000-a-year wage increase. I mean, that’s what the headline said. It’s from Paul Ryan’s office. “New Report: Tax Reform Will Raise Wages at Least $4,000 on Average.” (chuckles) Now, look, no way that tax reform can “raise your wages.” Your employer raises your wages. But, see, this is where I, as the mayor of Realville, get into trouble. They say something that can’t possibly be true, so I try to analyze what they really mean and then somebody says, “No, no, no, no. Let me tell you what it really means.”
And this is what they’re saying it really means. The “pay raise” — which, there isn’t a pay raise here. Unless Congress is ordering your employer to increase your gross or your net (however they calculate the four grand), “the pay raise is as the result of reforms that help keep businesses in the United States,” so that’s the repatriation of foreign revenue, “and bring jobs and capital back home from abroad.” Oh. So Apple has a cash pile — let’s round it up — $250 billion.
Now, 75 to 80% of it’s overseas because the American corporate tax rate’s 35%. Apple can… Why bring it back if you gotta pay 35% on it when there’s no comparable tax rate in any other country? So they leave it in the countries where it’s earned, and I think they park it in an account in Ireland. I’m not really sure about that. But the point is tax reform is gonna lower the corporate tax rate and there’s gonna be a special repatriation surcharge or some kind of thing.
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