In Its Dec 2017 10Q filed with the SEC, Apple disclosed that it recorded as a reduction of its 4Q 2017 income tax expense, $1.8 Bil of US Federal Income Tax Debt Forgiveness Due to the Trump Tax Cuts Act.
But what it deceptively didn't disclose directly is that there is much more of this which was netted against its Mandatory Foreign Earnings Repatriation Toll Tax Expense which was disclosed as a net of only a meager $800 Mil which seems unbelievable when you consider that in its Sept 2017 10-K filed with the SEC, that it disclosed that as of Sept 30, 2017, it had a whopping $128.7 Bil of cumulative undistributed international earnings which are intended to be indefinitely invested outside the US for which it has not recorded any Deferred Income Tax Liability.
As of Sept 20, 2017, Apple had a Deferred Income Tax Liability (DTIL) on its books of $36.4 Bil related to its Unremitted Earnings of Foreign Subsidiaries. In all probability, that was established using a US Federal Income Tax Rate of 35%.
Thus when the Trump Tax Cuts Act was passed, that $36.4 Bil of DTIL has to be remeasured by reducing it by 40% (14%/35%) X the DTIL or by $14.6 Bil.
Thus Apple's Total US Federal Income Tax Debt Forgiveness Granted it by the Trump Tax Cuts Act was this $14.6 Bil plus the other $1.8 Bil disclosed by Apple for a total of $16.4 Bil, much lower than Berkshire Hathaway's $29.6 Bil, but still a huge chunk of change.
And Apple would also get an additional tax benefit from reducing this now 21% Tax Rate down to 15.5%.
Then the reported $800 Mil/ $128.7 Net Toll Tax Rate of 0.6% makes a lot more sense.
In addition, Apple disclosed that if it has to pay the $17.5 Bil Ireland Income Tax Exposure it has, it would use it as a foreign tax credit to apply against the Huge Toll Tax it owes under the Trump Tax Cuts Act.
Just like Alphabet, Facebook, Amazon and Microsoft and other Best and Brightest Tech Companies, Apple also has the Best and Brightest working in its Income Tax, Finance and Accounting Depts.
The last thing that the US Government wanted is for any California Technology Company to do extremely well with the Trump Tax Cuts Act. Apple was the one US Technology Company which overwhelmingly Trumped the Trump Tax Cuts Act. The rest of them were Trumped by it.
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#3 on the Highest 4Q 2017 Net Income List Was AT&T, which generated 4Q 2017 Net Income of $19.1 Bil.
In Its Dec 2017 10K filed with the SEC, AT&T disclosed that it recorded a reduction of its 4Q 2017 income tax expense of $20.3 Bil related to the remeasurement of our deferred tax balances (I more appropriately call that US Federal Income Tax Debt Forgiveness) and to other impacts of the Trump Tax Cuts Act.
In its Dec 2016 10-K, AT&T disclosed that its Noncurrent Deferred Income Tax Liabilities were $60.1 Bil at Dec 31, 2016.
In its Sept 2017 10-Q, AT&T disclosed that its Noncurrent Deferred Income Tax Liabilities grew to $64.4 Bil at Sept 30, 2017.
Then in its Dec 2017 10-K, AT&T disclosed that its Noncurrent Deferred Income Tax Liabilities were $43.2 Bil.
Thus, its Noncurrent Deferred Income Tax Liabilities declined by $21.2 Bil in the 4Q 2017, the quarter the Trump Tax Cuts Act was signed into law.
Therefore, it only makes sense that the US Federal Income Tax Debt Forgiveness component would be at least $20.3 Bil and probably a bit higher than that.
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#4 on the Highest 4Q 2017 Net Income List Was Verizon, which generated 4Q 2017 Net Income of $18.8 Bil.
In Its Dec 2017 10-K filed with the SEC, Verizon transparently states "that the enactment of the TCJA results in a one-time reduction in net deferred income tax liabilities of approximately $16.8 billion, primarily due to the re-measurement of U.S. deferred tax liabilities at the lower 21% U.S. federal corporate income tax rate, and no impact from the repatriation tax".
It's pretty safe to assume that nearly all of the $16.8 Bil is due to the US Federal Income Tax Debt Forgiveness in the Trump Tax Cuts Act.
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And #5 on the Highest 4Q 2017 Net Income List Was Comcast, which generated 4Q 2017 Net Income of $15.0 Bil.
In Its Dec 2017 10-K filed with the SEC, being very transparent just like Verizon, Comcast states "The 2017 Tax Act reduces the federal corporate income tax rate to 21% from 35% effective January 1, 2018. The rate change, along with certain immaterial changes in tax basis resulting from the 2017 Tax Act, resulted in a reduction of our net deferred tax liabilities of $12.4 billion and a corresponding deferred income tax benefit in 2017."
It's pretty safe to assume that nearly all of the $12.4 Bil is due to the US Federal Income Tax Debt Forgiveness in the Trump Tax Cuts Act.
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So, when you add just these 5 Companies together, they Earned Total 4Q 2017 Net Income of $105.7 Bil and precisely 90.4% of it or $95.5 Bil was due directly to the US Federal Income Tax Debt Forgiveness Feature in Trump Tax Cuts Act and this in the same quarter before the lower 21% US Federal Income Tax Rates even take effect.
My rough estimate is that the Total US Federal Income Tax Debt Forgiveness in the Trump Tax Cuts Act is somewhere between $800 Bil and $1 Tril, with Foreign Corporations Receiving $150 Bil to $200 Bil of it.
And the huge deficits in the Trump Tax Cuts Act are completely funded by US Taxpayers.
I suggest there is a much better way to spend US taxpayer money.
My rough estimate is that the Total US Federal Income Tax Debt Forgiveness in the Trump Tax Cuts Act is somewhere between $800 Bil and $1 Tril, with Foreign Corporations Receiving $150 Bil to $200 Bil of it.
And the huge deficits in the Trump Tax Cuts Act are completely funded by US Taxpayers.
I suggest there is a much better way to spend US taxpayer money.
