A Foolish Take: The Biggest Corporate Taxpayer in America
There's a lot of talk right now about President Donald Trump's proposal to lower the top corporate income tax rate from 35% down to 15%.
This would be a boon to companies. It would make them more profitable and thereby encourage them to invest more aggressively in growth. It would also allow companies to return more capital to shareholders through dividends and stock buybacks, as the government would be getting a smaller piece of the pie.
Of course, some companies would benefit more from Trump's proposed tax cuts than others. Apple (NASDAQ: AAPL) ranks at the top. It earned $61 billion in pre-tax net income last year, remitting $15.7 billion, or 26%, to the government in the form of income taxes.
Data source: Apple 2016 10-K and author's calculations. Chart by author.
Under Trump's proposed 15% rate, Apple would have saved somewhere in the neighborhood of $6.5 billion last year. That's enough to buy 812.5 million "Make America Great Again" hats at Wal-Mart,or 7,065 hats for every Apple employee.
But a hat-buying spree seems unlikely. Apple would probably just raise its dividend or repurchase more stock.
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Offer from The Motley Fool: The 10 best stocks to buy nowMotley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the S&P 500!*
Tom and David just revealed their ten top stock picks for investors to buy right now.
Click here to get access to the full list!
*Stock Advisor returns as of 5/1/2017.
John Maxfield has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.