Throughout the first year of President Trump's tenure, Silicon Valley corporations and executives have made their opposition to a number of the administration's efforts clear, weighing in on immigration, net neutrality, education reform and climate change.
But on Monday, just days after Senate Republicans passed a massive bill that would overhaul the American tax system, tech firms remained largely silent.
Some experts said this may be because tech companies were still reading the tea leaves, trying to determine how the bill, a massive 479-page document, could affect them in the coming years.
Others said it's because tech giants like Google, Apple and Facebook were quietly celebrating.
That's because a big cut in the corporate tax rate -- from 35 percent to a possible 20 percent rate -- and a new approach to companies that park millions of dollars overseas could benefit tech giants in a big way, said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, a nonpartisan think tank.
"On balance, the companies in Silicon Valley are probably pretty happy right now," Hufbauer said.
Spokespeople for companies including Apple, Cisco, Alphabet, Oracle and Facebook did not immediately respond to requests for comment on the tax bill.
Though tech is far from the only industry that would feel significant effects of the GOP's proposed tax bill -- health care, banking, hospitality and many other industries that call the Bay Area home would also see impacts -- few house quite as much money overseas as tech multinationals do.
Apple, Alphabet and other Silicon Valley multinationals have for years been sheltering hundreds of billions of dollars overseas in countries known as tax havens for their low or non-existent tax rates on foreign investment.
According to data from the Institute on Taxation and Economic Policy, a nonpartisan research firm, four of the top five California companies with profits stockpiled in overseas tax havens are tech companies: Apple, Cisco, Google and Oracle. The five biggest tech firms in the world -- Apple, Alphabet, Amazon, Facebook and Microsoft -- have a combined $457 billion in overseas holdings, according to a Bloomberg report from earlier this year.
Apple issued a statement last month that said it has paid more than $35 billion in corporate income taxes over the past three years, with an effective tax rate of 24.6 percent, "higher than average for U.S. multinationals."
Provisions in the GOP's tax bill would allow corporations to bring offshore cash back to the U.S. at a tax rate of 10 percent if the Senate's proposal holds. Companies would be credited for taxes already paid overseas on those profits and allowed to pay the balance back over several more years.
"Most of these tax havens are small little countries, where there's nothing to buy and nothing to invest," Hufbauer said. "There are plenty of companies that would rather invest and build here, where there's tremendous infrastructure and a lot of skilled people."
The Senate version of the bill also does not include a provision that is in the House measure that would tax stock options -- like the kind startups rely on when compensating their employees -- as soon as those options become vested. Senators instead added language that would allow employees to defer taxes on stock options for up to five years.
"We think deferring cash tax payments until an IPO is a great step to support the innovation economy where non-cash compensation can be a significant portion of an engineer's pay," said Rohit Kulkarni, managing director of private investment research at SharesPost in San Francisco.
One worrisome aspect of the Senate's bill is its treatment of a research and development tax credit that tech firms and Bay Area startups rely on.
Republican senators decided to keep the corporate alternative minimum tax (AMT), a secondary tax with fewer tax breaks and lower rates meant to prevent wealthy companies and individuals from artificially reducing their tax bills by leaning on deductions. By keeping the AMT in place, corporations would be faced with a choice between paying the minimum rate, which is 20 percent, or a new reduced corporate rate, that could be brought down from 35 to 20 percent if the Senate bill passes as is.
That means as companies fall into the AMT category, many could lose some of their tax credits, including the research and development credit. Hufbauer, though, suggested that provision is likely to change as the bill works its way toward the president's desk.
It's not all good news for tech firms, however.
Offshore assets that are liquid -- cash or an equivalent of cash -- will be taxed at a higher rate over the course of the next 10 years as a means of deterring companies from stockpiling cash overseas.
It's unclear how much of American companies' estimated $2.6 trillion in tax havens like the Caribbean and European islands are liquid assets. But since tech companies are less likely to need property, materials and other tangible assets, as they deal largely in ideas and digital property, experts said, it is likely to have an outsize impact on tech firms.
"It's kind of an old-school bill in the sense that it's designed to benefit people with tangible assets," said Robert Willens, a tax professor at Columbia University.
Congressional Republicans argue that cutting the corporate tax rate will induce companies to spend more money on investment and hire more workers. But that's not likely to happen in Silicon Valley, for the simple reason that the tech industry is already doing those things.
Take Alphabet, the parent company of Google. From 2010 to 2016, the Mountain View tech giant has more than doubled its full-time workforce to more than 72,000 workers, according to documents filed with the Securities and Exchange Commission. In that same time period, Alphabet more than quadrupled its research and development spending to nearly $14 billion.
In 2017, the top 20 U.S. companies ranked by research-and-development expenses, which include Silicon Valley stalwarts Alphabet, Apple, Intel, Oracle, Cisco Systems and Facebook, spent a collective $157 billion on innovation, according to a report by the PricewaterhouseCoopers accounting and consulting firm. That was up from $90.7 billion six years ago.
Generally speaking, American corporations are not hurting for financial resources, said Jerry Nickelsburg, an economist with UCLA Anderson School of Management. Companies are not only sitting on large piles of cash, but they can still borrow money at low interest rates, he said.
"A lack of capital is just not an issue for corporations," Nickelsburg said. "The tax bill won't make them do anything that they aren't already doing."
Marissa Lang and Thomas Lee are San Francisco Chronicle staff writers. Email: email@example.com, firstname.lastname@example.org Twitter: @Marissa_Jae, @ByTomLee
Senate tax plan and Silicon Valley: the good, bad and uncertain
Would remove a provision that taxed stock options private tech firms give employees before those options vest.
Would reduce the corporate tax rate from 35 to a possible 20 percent.
Would allow multinational corporations to bring cash back from overseas at a reduced rate to avoid penalties on offshore liquid assets.
May eliminate some benefits from the popular research-and-development tax credit.
Corporations' liquid assets held offshore, such as cash and its equivalent, would be taxed at a higher rate.
Though Republicans claimed the corporate tax cut will stimulate investment and hiring, big tech firms like Alphabet and Apple have already spent lots of money doing those very things.
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