The $1.5 trillion tax bill passed by the House and Senate has been called a gift to corporate America, with a sharp reduction in the corporate tax rate from 35% to 21%, the retention of significant loopholes and deductions, and the ability of pass-through businesses to deduct 20% of the first $315,000 of earnings.
But it’s especially generous for the giants of Silicon Valley.
Already, tech companies paid an average tax rate of 24% over the past decade, below the 29% average tax rate for companies in the S&P 500. That’s less in taxes than every other industry—which includes finance, healthcare, and energy—in the country, according to an analysis by Zion Research Group. For example, Hewlett Packard Enterprise only pays an effective tax rate of 12.6%, reports the Silicon Valley Business Journal. And now it promises to get even better.
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Some of the bill’s provisions will deliver a windfall to tech giants, allowing them to bring their huge piles of overseas cash back to the United States at a greatly reduced tax rate of 15.5%. The big five tech firms–-Apple, Alphabet, Amazon, Facebook, and Microsoft–-currently have a combined $457 billion held in foreign subsidiaries, reported Fast Company‘s Mark Sullivan last month.