EDITORIAL: More benefits from GOP’s tax reform bill

Democrats promised an apocalypse in the wake of Republican tax reform, but it appears their crystal ball was cracked. Not only have several major U.S. companies announced bonuses and investments in the month since the measure passed, but some businesses are now promising to beef up retirement benefits.

On Friday, the Wall Street Journal reported that at least a dozen large companies — including Visa, Nationwide Insurance and AutoNation — plan to boost contributions to employee 401(k) plans as a result of savings they’ll gain from the new tax law.

“The change in the tax law, which cut the U.S. corporate tax rate to 21 percent from 35 percent, is the latest in a series of factors that are motivating companies to raise their 401(k) contributions,” the Journal reported.

This all comes on the heels of Apple’s recent announcement that, thanks to the new law, it will gladly take a $38 billion tax hit on the $250 billion it holds overseas. It would be the largest one-time tax payment in the country’s history and will happen only because of tax reform.

The GOP tax bill imposes a 15.5 percent levy on foreign profits whether or not they are returned to the United States. Previously, corporations not only paid taxes abroad, but faced a 35 percent U.S. tax if the money was brought home. That was an incentive for companies such as Apple to keep such profits parked in foreign accounts.

But there’s now no reason for Apple to shield the cash once it’s paid the lower tax rate under the GOP measure. Thus, the company also announced it intends to invest some $350 billion in the United States over the next five years, creating 20,000 new jobs.

“Other big tech companies, which also have stashed money offshore, are likely to pay big tax bills in coming months, although none will be as big as Apple’s,” Wired reported last week.

Would Democrats, who unanimously opposed the tax bill, prefer that the $2.8 trillion American companies collectively have in overseas holdings remain in foreign accounts rather than benefit the U.S. Treasury? Apparently so.

As a Journal editorial pointed out on Friday, Barack Obama “could have made all of this happen, but he refused to negotiate seriously with a GOP Congress. Companies continued to self-deport from the U.S. through corporate inversions and financial engineering that erodes the tax base. Democrats in Congress made the same calculation last year, and now not one can share in reform’s political dividends.”

Democrats may still be poised to ride a wave of dissatisfaction with the mercurial Mr. Trump to big gains in November. But their continued embrace of punitive taxes and a hyperactive regulatory state do little to dispel the notion that, when it comes to economic policy, they’re trapped somewhere between incompetence and wishful thinking.