The most commonly heard refrain when Donald Trump and the GOP were seeking to pass some version of corporate tax reform went something like this: There are literally trillions of dollars trapped in offshore dollar deposits which, because of America\u2019s uncompetitive tax rates, cannot be brought back home. Cut the corporate tax rate and get those dollars repatriated, thereby unleashing a flood of new job-creating investment in the process. Or so the pitch went.It\u2019s not new and has never really stood up to scrutiny. Yet virtually every single figure who lobbied for corporate tax reform has made a version of this argument. In the past, Congress couldn\u2019t or wouldn\u2019t take up the cause, but, desperate for a political win after the loss on health care, Trump and the GOP leadership ran with a recycled version of this argument, and Congress finally passed the Tax Cuts and Jobs Act on December 22, 2017. The headline feature was a cut in the official corporate tax rate from 35 percent to 21 percent.So did reality correspond to the theoretical case made for the tax reform bill? We now have enough information to make a reasonably informed assessment. Unless you think that tax havens like Ireland, Bermuda or the Cayman Islands, all of which continue to feature as major foreign holders of U.S. Treasuries, have suddenly emerged as economic superpowers, the more realistic interpretation of the data shows the president\u2019s much-vaunted claims about the tax reform to be bogus on a number of levels. Even though some dollars have been \u201cbrought home,\u201d there remain trillions of dollars domiciled in these countries (at least in an accounting sense, which I\u2019ll discuss in a moment). If anything, the key provisions of the new legislation have given even greater incentives for U.S. corporations to shift production abroad, engage in yet more tax avoidance activities and thereby exacerbate prevailing economic inequality. Which, knowing Donald Trump, was probably the whole point in the first place.This tax bill was constructed on a foundation of lies. To cite one obvious example, the real U.S. corporate tax rate has never been near the oft-cited 35 percent level. As recently as 2014, the Congressional Research Service estimated that the effective rate (the net rate paid after deductions and credits) was around 27.1 percent, which was well in line with America\u2019s international competitors.But even the new and supposedly more competitive 21 percent rate has not been as advertised. As Brad Setser (a senior fellow at the Council on Foreign Relations) has illustrated, the new tax bill also included a provision that enabled \u201ccompanies that shift their profits abroad to pay tax at a rate well below the already-reduced corporate income tax\u2026Why would any multinational corporation pay America\u2019s 21 percent tax rate when it could pay the new \u2018global minimum\u2019 rate of 10.5 percent on profits shifted to tax havens, particularly when there are few restrictions on how money can be moved around a company and its foreign subsidiaries?\u201d The upshot, as Setser concludes, is that \u201cthe global distribution of corporations\u2019 offshore profits\u2014our best measure of their tax avoidance gymnastics\u2014hasn\u2019t budged from the prevailing trend.\u201dAlthough this new 10.5 percent rate applies to \u201cglobal intangibles,\u201d such as patents, trademarks, and copyrights, the legislation still creates incentives for companies (notably pharmaceuticals and high-tech companies) to shift investment in tangible assets as well (such as factories) in order to maximize the benefits of this global rate on intangibles.Many anticipated this result at the time the new law was enacted. The legislation incentivizes increased offshore investment in real assets such as factories, because the more companies invest in these \u201ctangibles\u201d in offshore low tax jurisdictions such as Ireland, the easier it becomes to incur a \u201ccalculated minimum tax on your offshore intangible income (the patents and the like on a new drug, for example),\u201d according to Setser. The effect is also to exacerbate the trade deficit. A $20 billion jump in the pharmaceutical trade deficit last year provides excellent evidence of this trend. Ironically, this works at variance with Trump\u2019s \u201cAmerica First\u201d trade nationalism, and his concomitant efforts to wield the tariff weapon in order to disrupt global supply chains and get corporate America to re-domicile investment at home.Parenthetically, a further political by-product has been to give the deficit hawks more political ammunition in their goal to cut supposedly \u201cunsustainable\u201d social welfare expenditures, perpetuating even greater economic inequality, on the grounds of insufficient tax revenues to \u201cfund\u201d these programs. That is another lie (see this New York Times op-ed by Stephanie Kelton to understand why).As for the other bogus arguments used to justify this legislation, it is worth noting that most of dollars allegedly \u201ctrapped\u201d overseas are in fact domiciled in the U.S. They have been classified as \u201coffshore\u201d purely for tax accounting purposes. Yves Smith of \u201cNaked Capitalism,\u201d for example, has pointed out that Apple stored the dollars \u201crelated to its Irish sub in banks in the US and managed it out of an internal hedge fund in Arizona.\u201d Similarly, the Brookings Institution notes that American tax accounting rules do not place geographic restrictions on where those U.S. dollars are actually held, even if the Treasury data records them as \u201coffshore\u201d for tax purposes. Quite the contrary: \u201c[T]he financial statements of the companies with large stocks of overseas earnings, like Apple, Microsoft, Cisco, Google, Oracle, or Merck\u2026show most of it is in U.S. treasuries, U.S. agency securities, U.S. mortgage backed securities, or U.S. dollar-denominated corporate notes and bonds.\u201d In other words, the dollars are \u201chome\u201d and invested in the U.S. financial system.So in what ways are the dollars actually \u201ctrapped\u201d (i.e., unavailable for domestic use without severe tax repercussions)? They have never been so in reality. Through financial engineering, the banks that have held the dollars \u201coffshore\u201d on behalf of these American multinationals have extended loans against the stockpile so as to \u201cliberate\u201d the capital to be used as the companies saw fit. It\u2019s a form of hypothecated lending. Not only has the resultant \u201csynthetic cash repatriation\u201d provided a nice margin for what are effectively risk-free loans, but it also has enabled the beneficiary companies to deploy the dollars within the U.S. while avoiding tax penalties.But here\u2019s the key point: instead of investing in new plants and equipment, a large proportion of these dollars have instead been used for share buybacks or distributed back to shareholders via dividend payments. Anne Marie Knott of Forbes.com quantifies the totals: \u201cFor the first three quarters of 2018, buybacks were $583.4 billion (up 52.6% from 2017). In contrast, aggregate capital investment increased 8.8% over 2017, while R\u0026D investment growth at US public companies increased 12.5% over 2017 growth.\u201d So the top tier again wins in all ways: net profits are fattened, shareholders get more cash, and CEO compensation is elevated, as the value of the stock prices goes higher via share buybacks.The dollars, in other words, have only been \u201ctrapped\u201d to the extent that corporate management has chosen not to deploy them to foster real economic activity. \u201cPunitive\u201d corporate tax rates, in other words, have been a fig leaf. But the American worker has derived no real benefit from this repatriation, which was the political premise used to sell the bill in the first place.Since the passage of the tax bill, the data show no significant evidence of corporate America bringing back jobs or profits from abroad. In fact, there is much to suggest the opposite: namely, that tax avoidance is accelerating in the wake of the legislation\u2019s passage, rather than decreasing. Consider that the number of companies paying no taxes has gone from 30 to 60 since the bill\u2019s enactment.But it\u2019s worse than that, as Setser highlights:\u201cWell over half the profits that American companies report earning abroad are still booked in only a few low-tax nations\u2014places that, of course, are not actually home to the customers, workers and taxpayers facilitating most of their business. A multinational corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary and then funnel income to its Bermudian subsidiary\u2014taking advantage of Bermuda\u2019s corporate tax rate of zero.\u201dAgain, the money itself does not make this circuitous voyage. These are all bookkeeping entries for accounting purposes. In another report, Setser estimates the totals in revenue not accrued by the U.S. Treasury to be equivalent to 1.5 percent of GDP, or some $300 billion that is theoretically unavailable for use on the home front.Global tax arbitrage, therefore, runs in parallel with global labor arbitrage. That\u2019s the real story behind globalization, which its champions never seem to mention, as they paint a story of worldwide prosperity pulling millions out of poverty. However, as I\u2019ve written before, \u201ca big portion of Trump voters were working-class Americans displaced from their jobs by globalization, automation, and the shifting balance in manufacturing from the importance of the raw materials that go into products to that of the engineering expertise that designs them.\u201d During the 2016 election and beyond, Trump has consistently addressed his appeals to these \u201cforgotten men and women.\u201d Yet the president\u2019s signature legislative achievement, corporate tax reform, suggests that his base continues to receive nothing but a few crumbs off the table. The tax reform also works at variance with the main thrust of his trade policy or, indeed, his restrictionist immigration policies (and it\u2019s questionable whether these forgotten voters are actually deriving much benefit from those policies either). Not for the first time, therefore, the president\u2019s left hand is working at cross-purposes with the right. The very base to whom he continues to direct his re-election appeals get nothing. And the country as a whole remains far worse off as a result of his policy incoherence and mendacity.Marshall Auerback is a market analyst and commentator.This article was produced by Economy for All, a project of the Independent Media Institute.