from Kevin Williamson at National Review, The Great Leap Forward:
Apple will not pay another dime in U.S. taxes on its overseas earnings. The most important feature of the recent corporate-tax reform is the adoption of a “territorial” corporate-tax regime in the United States, which in short means that Apple and other multinational firms will pay U.S. taxes on their U.S. business activities, French taxes on their French income, Japanese taxes on their Japanese earnings, etc., whereas before the U.S. government had claimed the right to tax a U.S.-based company’s earnings everywhere in the world, which of course is what those offshore cash hoards were all about in the first place. And that change represents something more than low-hanging fruit: By modernizing its corporate-tax practices, the United States has made itself a more attractive place to do business, which makes U.S.-based assets — including U.S.-based workers — more valuable. Remember that when Washington was in a panic about corporate-tax “inversions” a few years back, U.S. companies were not relocating to tropical tax havens or even to such little islands of hypercapitalism as Singapore or Dubai: They were going to Canada, Ireland, and Switzerland — which are not countries with radically low taxes but countries with corporate-tax arrangements that were more sensible than our own. Fixing that isn’t a radical change on the order of going from oxen ploughs to semiconductors, but it is the sort of deep change that is available to an already-advanced modern economy. It isn’t the one-time event that will keep us innovative and prosperous — it is creating the conditions that allow billions of little experiments to take place, most of which will fail while the few that succeed will carry us all forward with their momentum.
Apple already was the largest corporate taxpayer in the United States. And Apple is a great company, but what will really drive our future prosperity is what comes next — and no one knows what that is. Very few people if any in Washington really understand that. The profit we are all so excited about today is only the residue (welcome residue!) of deals already done. Some low-hanging fruit has been picked.
What has been planted?
America’s success is a combination of constitutional liberty, heterogeneous culture that has a healthy disrespect for authority, solid protection of property rights, a respect for the common man and a classless society, and willingness to risk and fail. There are certainly hundreds of other attributes, but the combination is uniquely American. Government’s function is to foster and protect the elements of our productive society.
Arthur Laffer offered this simple formula: low taxes, low regulation, stable dollar, and free trade.
I would add the right immigration policy. At AEI and Carpe Diem, Mark Perry writes Immigrant Fact of the Day:
43% of the Fortune 500 companies in 2017 (the 500 largest US companies measured by sales revenues last year) were founded or co-founded by an immigrant or the child of an immigrant
The American experience is able to leverage the best minds in the world, by being attractive to them. Whatever corrections we need to make in our immigration policy we should never lose sight of this.