Big Businesses Are Cashing In on Trump’s Tax Cuts
Corporate tax revenue has quickly dipped since Republicans passed tax cuts this summer. But economists think these tax breaks might be worth it.
By Andrew Duehren
Reporting from Washington
Dec. 12, 2025Updated 12:08 p.m. ET
For most people, the tax cuts that President Trump signed into law this summer have yet to materialize. Only after Americans file their taxes next year will the savings become apparent, launching what Republicans hope will be a “refund boom” that lifts the public’s view of the economy.
Many of America’s largest companies have not had to wait. In the months since the law’s passage in July, corporations like Walmart, Amazon, Verizon and Eli Lilly have all disclosed in securities filings that the law would reduce their cash tax payments in the near term. AT&T Inc. projected that it would save as much as $2 billion in taxes just this year.
Those corporate tax savings have already started to have an effect on the federal budget. Between July and November, the last full month of data, revenue from the corporate income tax has dropped by roughly a third, or $52 billion, compared to the same period the year before, according to Treasury data.
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CHAT GPT:
1) Overview: Trump’s Corporate Tax Breaks and How They Work Under the updated Republican tax legislation signed in 2025 (often referenced as the One Big Beautiful Bill), several key corporate tax provisions have been reinstated or expanded:
A. Immediate expensing/bonus depreciation:
Corporations can immediately deduct the full cost of qualifying capital expenditures instead of amortizing them over years. This improves near-term cash flow by reducing taxable income up front. The Wall Street Journal
B. Research & Development deductions:
Domestic R&D expenses can again be deducted immediately, rather than capitalized over several years. This change can be especially material for tech companies with significant R&D budgets. Forbes
C. Permanent lower corporate rate:
The core corporate tax rate of 21%, originally set by the 2017 Tax Cuts and Jobs Act, remains in place and certain enhancements are made permanent. Kiplinger
Across the economy, these changes have driven lower cash taxes paid and improved liquidity for many large firms, boosting cash flows available for investment, buybacks, dividends, or operational spending. The Wall Street Journal
2) Qualcomm’s Specific Situation: A Mixed Tax Impact For QCOM, the tax law has had both positive and challenging effects:
Positive: Lower Future Cash Tax Payments Qualcomm’s most recent SEC filings explicitly state that the reinstated tax provisions—especially immediate expensing of domestic R&D—are expected to favorably affect cash flow from operations by reducing future cash tax obligations. This is valuable for a high-R&D tech company like Qualcomm. SEC
Complication: Deferred Tax Adjustments and AMT Exposure However, Qualcomm also reported a $5.7 billion non-cash tax charge in late 2025 tied to the new tax law. This charge reflects establishing a valuation allowance on deferred tax assets and anticipates exposure to the corporate alternative minimum tax (AMT) starting in fiscal 2026. This one-time charge reduced GAAP net income and contributed to a stock price dip. MarketWatch+1
In simple terms:
- Cash taxes likely decline thanks to accelerated deductions.
- Accounting (GAAP) tax expense may be higher or volatile because of deferred tax accounting adjustments.
- AMT considerations could reduce the value of some tax assets in future years. SEC
This mix means near-term earnings metrics look worse in headline GAAP results even though cash tax outlays should be lower over time.
3) Strategic and Financial Implications for QCOM Cash Flow and Investment: Lower cash taxes free up capital for R&D, capital expenditures, dividends, stock buybacks, strategic M&A, or debt reduction. Qualcomm has already deployed capital aggressively, including significant share repurchases, though this also reduces financial flexibility. Panabee
Valuation Impact: Markets may price in lower effective tax rates and stronger free cash flow, which can support higher valuation multiples. However, one-time charges reporting as losses occasionally compress short-term earnings and can weigh on the stock.
Future Tax Profile: The shift in international tax provisions (e.g., changes to FDII/FDDEI) means Qualcomm’s offshore income may be taxed differently, which will also affect long-term tax planning and effective rates. SEC
4) Macro Context: How Big Businesses Are Cashing In The wider narrative about corporations benefiting from Trump’s tax cuts generally points to:
- Significant reductions in cash tax payments for many large U.S. firms.
- Increased cash reserves that often go toward stock buybacks and dividends as opposed to new investment. TIME
- Retroactive deductions for capital expenditures that create a near-term windfall in cash flow. The Wall Street Journal
While Qualcomm is a beneficiary of lower cash tax burdens, it has not escaped accounting complexities and future minimum tax exposure.
5) Investor Considerations Bullish factors:
- Strong R&D deduction benefits.
- Potential for improved cash flow boosting investor returns.
- Enhanced freedom to allocate capital strategically.
Bearish or risk factors:
- GAAP earnings distortion from one-time tax charges.
- AMT and international tax regime changes adding complexity.
- Market reaction sensitive to earnings beats/misses influenced by tax adjustments.
Summary:
Trump’s tax breaks are lowering corporate cash taxes broadly, and for Qualcomm in particular, they are increasing near-term cash flow through enhanced deductions. However, non-cash accounting charges and future AMT exposure complicate earnings results and require careful analysis by investors. Overall, the tax law is a net positive for cash flow but not without earnings volatility and structural tax planning challenges for QCOM. SEC |
