The tech industry has become an unlikely ally to congressional Republicans in their push for sweeping tax cuts, The Hill reports. President Donald Trump has been arguing frequently with tech giants, and in the latest clash between the two sides, Trump accused tech companies like Facebook this week of cooperating with the media to undermine him.
However, major technology firms and the Washington trade associations that represent them have come out in support of the GOP’s newly released tax plan and its cuts to corporate tax rates.
“We’re excited that framework takes a look at reducing corporate tax rates, a territorial system and repatriating funds. We’re waiting for the details. We look forward to the legislative text.” says Tiffany Moore, Vice President of political affairs at the Consumer Technology Association, Washington D.C. based think tank representing a slew of major tech firms.
Technology companies and trade associations say that they’re particularly fond of repatriation policies in the reform proposal, as the the GOP suggestion calls for a one-time tax break on profits brought back from abroad, or repatriated, compared to the 35 percent such income would normally be subject to under current law, The Hill writes.
Trump’s repatriation push comes at an opportune time for tech giants, with the European Union threatening to raise their taxes, as the EU commission released a report last week outlining plans to increase the taxes it collects from U.S. technology companies. U.S. companies currently hold $2.6 trillion offshore. The technology sector, in particular, is holding large sums of money in Europe: Apple has $181 billion offshore, Microsoft holds $108 billion and Google holds $47.4 billion.
The proposed Republican plan would give companies another boost by cutting the corporate tax rate from 35 percent to 20 percent, and make the tax system territorial, meaning that only domestic earnings would be taxed, The Hill adds. The news outlet comments that tech firms have traditionally been politically aligned with Democrats on issues like LGBT rights and climate change. On tax reform, however, the Democrats are decidedly less pleased.
Senate Minority Leader Chuck Schumer predicted that the tax plan is “so perverse in helping the wealthy and hurting the middle class, it will fail.”