President Donald Trump—the great dealmaker—has an ego fueled by flattery, which is allowing corporate America to play him like a fiddle. Since the passage of his massive tax cuts, Trump has trumpeted the news of one-time bonuses, wage hikes, capital investment projects, and job creation promises as affirmations of his genius.
His State of the Union Address Wednesday night was no different. As Trump proclaimed:
Since we passed tax cuts, roughly 3 million workers have already gotten tax-cut bonuses—many of them thousands and thousands of dollars per worker, and it’s getting more, every month, every week. Apple has just announced it plans to invest a total of $350 billion in America, and hire another 20,000 workers. And just a little while ago, Exxon Mobil announced a $50 billion investment in the United States. Just a little while ago.
This, in fact, is our new American moment. There has never been a better time to start living the American Dream.
So what about that ExxonMobil investment? ExxonMobil CEO Darren Woods, who took over for Rex Tillerson when he went to work for Trump, announced Monday that the company would be investing $50 billion in capital and exploration investments over the next five years—a move, he said, that is thanks in part to the corporate tax cuts. Trump repeated the news in his address to much applause, as Tillerson looked on from the front row.
It turns out the fossil fuel giant was, in all likelihood, going to make that investment anyway. As Americans for Tax Fairness point out, SEC filings show that ExxonMobil made about $53 billion in domestic investment in the five-year period between 2012-2016. This suggests that the company will continue to invest in capital spending at a similar (or even lower) pace.
The company was already paying an absurdly low rate in corporate taxes—just 13.6 percent on $60 billion in U.S. profits between 2008-2015. Lowering the statutory rate to 21 percent, then, doesn’t do much for its after-tax profits.
Of course, ExxonMobil is an incredibly powerful corporate actor—the third largest company in the world. It has a tremendous interest in currying favor with its regulator, the Trump administration. Trump’s presidency could prove highly lucrative for the company, enhancing prospects for drilling along the U.S. coasts, in the Arctic National Wildlife Refuge, and potential for new fracking operations on public land.
It’s also absurd to assert that news of these bonuses is anything more than savvy public relations. And that money that Apple is “bringing back” from overseas is merely an accounting move on paper—and an affirmation that it was evading U.S. taxation by shifting its income into foreign accounts. Apple’s move is not any sort of tribute to the brilliance of Trump’s deal making on taxes.
Corporations like ExxonMobil and Apple will continue to misrepresent their typical business operations as all due to the brilliance of Trump. The flattery will work. But that does not mean the Trump tax cuts are working.