President Trump's Tax Plan Would Give Alphabet $47B

The President of the United States, Donald Trump, is currently working on tax reform, which was a big campaign promise for him while he was running for the office last year. He and his team unveiled the new plan yesterday to the world, which brings some pretty big tax cuts for essentially everyone. And when it comes to Alphabet, it means that they would pocket about $47 billion with these new tax breaks. And many believe that Alphabet would use that money for acquisitions, giving them about $81 billion to spend on acquisitions.

This new tax plan is something that companies that have money held overseas is definitely liking. Seeing as they would need to pay taxes on that money to bring it over to the US, seeing a lower percentage would mean they get to keep more of that money, and that includes Alphabet and Apple. Of course, this tax plan does have a ways to go before it is approved and implemented. President Trump has only taken the first step in tax reform, which was announcing his plan, which has simplified things. Next up, it'll visit the House and the Senate for approval, and given the current state of the House of Representatives and Senators, it may not be as easy as many had hoped, including the President.

Alphabet currently has about $86.3 billion in cash, but $52.2 billion of that cash was held overseas, as of the end of 2016. Bringing that money over to the US is going to be expensive, but with taxes going down, this might be the time for Alphabet to bring it over. Especially since they can use that money for acquisitions to bolster their cloud business. Alphabet believes that their cloud business could overtake Amazon's AWS, which is currently the market leader, by 2022. Lately, Google has been targeting enterprise companies for cloud services, and even picked up Snapchat recently as a cloud customer. While others believe that Alphabet may use the money to buy back stock or pay dividends, but that's not something they have done in the past, so that is highly unlikely. Of course this is all "what ifs" at this point.

You May Like These
More Like This:
Android Headlines We Are Hiring Apply Now