WSJ: Big Tech to Save Tens of Trillions from Trump Tax Cuts

Likely to Have Contributed to Stock Market Gains

The Wall Street Journal (WSJ) reported on the 4th (local time) that, due to President Donald Trump's large-scale tax cut law, major corporations?including big tech companies?are expected to benefit from tens of trillions of won in tax reductions.

Recently, US telecommunications company AT&T announced that it expects to reduce its actual tax payments this year by $1.5 billion to $2 billion (approximately 2 trillion to 2.7 trillion won). The $2 billion figure corresponds to 11% of the company's estimated free cash flow for this year, as projected by securities analysts. AT&T also estimated that its tax savings would reach $2.5 billion in 2026 and $3 billion in 2027.

This effect is thanks to President Trump's "one big, beautiful bill." The law allows companies to immediately expense asset depreciation costs?which were previously reflected in costs over several years?and to instantly expense research and development (R&D) costs as well. Amounts expensed in accounting are excluded from taxable income, so companies see a reduction in the taxes they owe.

WSJ pointed out that "this will provide US companies not only with an immediate and unexpected windfall, but also with a sustained tailwind going forward," and noted that these tax cuts will significantly increase companies' free cash flow. Free cash flow refers to the amount remaining after deducting capital expenditures from cash flow generated by operating activities. This money can be used to repay debt or repurchase company shares.

David Zion, founder of consulting firm Zion Research Group, said, "More cash flowing into corporate pockets and less into government coffers is, in theory, a good thing for investors." In a recent report, Zion Research estimated Meta's tax savings for this year at $11 billion, which amounts to 31% of the company's estimated free cash flow. For Amazon, the firm estimated that $15.7 billion in tax savings would secure cash equivalent to 43% of its projected free cash flow for this year.

Zion Research surveyed 369 companies among those listed on the S&P 500 and found that the total scale of tax benefits would reach $148 billion. This represents 8.5% of the total estimated free cash flow for these companies before tax cuts.

In particular, the four big tech companies?Meta, Amazon, Google, and Microsoft?are expected to enjoy 38% of the estimated $148 billion in tax benefits. WSJ stated, "Whatever one's view on corporate tax cuts and the expansion of the fiscal deficit, the tax cut law appears to have contributed to boosting stock market valuations."