Corporations Brought Back $1 Trillion From Overseas Due to Trump Tax Plan
by Matt Palumbo
Posted: December 24, 2019

For decades before President Donald Trump’s tax plan took effect, U.S. corporations with foreign subsidiaries had no (sane economic) choice but to keep their overseas profits abroad. After all, they’d face double taxation if they wanted to bring them home. Their profits were already taxed by the foreign country they’re operating in, and then to repatriate those funds would’ve required them to pay the U.S. corporate tax rate, which was then among the highest in the world. By year end 2017, right before Trump signed his Tax Cuts and Jobs Act (TCJA), upwards of $2.5 trillion in cash was parked overseas.

The TCJA reduced the corporate tax rate from 35% to 21%, but offered extra incentives to repatriate cash. After all, we’d rather have that money in America for economic reasons regardless of how much the government can get their hands on. The Trump tax law allowed corporations to repatriate cash at a discounted 15.5% tax rate, and a reduced 8% rate to repatriate other assets that are non-cash or illiquid.

While estimates differ on how much cash was parked overseas pre-TCJA, between 40% and 66% has made its way back to America.

According to Bloomberg:

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Corporations have brought back more than $1 trillion of overseas profits to the U.S. since Congress overhauled the international tax system and prodded companies to repatriate offshore funds, a report showed. The flow rose to $95.3 billion in the third quarter from a downwardly revised $70.4 billion in the previous three months, according to Commerce Department data, reaching a total of $1.04 trillion since the end of 2017.

Investment banks and think tanks have estimated that American corporations held $1.5 trillion to $2.5 trillion in offshore cash at the time the law was enacted.

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And it’s not just business doing well. Real disposable person income rose by nearly $6,000 since the TCJA, of which nearly half can be attributed to the tax changes (based on how much wages grew above projections).



For as much as liberals will try to convince you otherwise, it’s undeniable that the Trump tax cuts worked.

https://bongino.com/corporations-brought...trump-tax-plan/

December 27, 2019
One trillion dollars have flowed into the American economy as Trump’s tax law changes allowed companies to repatriate profits without tax penalty
By Thomas Lifson

President Trump’s tax reform has delivered more than a trillion dollars of stimulus to the American economy through corporations repatriating profits held overseas in order to avoid penalties that the tax law had imposed on bringing home the funds earned abroad. Bloomberg reports:

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Corporations have brought back more than $1 trillion of overseas profits to the U.S. since Congress overhauled the international tax system and prodded companies to repatriate offshore funds, a report showed Thursday. (snip)

Investment banks and think tanks have estimated that American corporations held $1.5 trillion to $2.5 trillion in offshore cash at the time the law was enacted. Before the overhaul, companies were incentivized to keep profits overseas because they owed a 35% tax when bringing it back and could defer payment by keeping funds offshore. The law set a one-time 15.5% tax rate on cash and 8% on non-cash or illiquid assets.

Compare and contrast the way that Presidents Trump and Obama chose to stimulate the American economy, each of them generating roughly a trillion dollars in “stimulus.”

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Under Obama, federal, taxpayers ponied up almost a trillion dollars that was disbursed to various projects deemed worthy. Obama initially claimed that “shovel ready” projects would be the main beneficiaries, only to later realize (or admit) that few such immediate opportunities existed, and that the regulatory jungle meant that new projects would take years to be run through the gauntlet of obstacles that federal, state, and local jurisdictions impose on construction. Instead, the major recipients were government employees whose salaries and benefits were funded by the “stimulus.”

The cost to taxpayers: $831 billion. But schoolteachers and bureaucrats (and their unions) did get paid, and a few worthy projects were built.

President Trump, by contrast, generated additional revenue for the federal budget as companies paid 15.5% to the US Treasury on cash repatriated, and 8% on non-cash repatriations. And more than a trillion dollars entered the country, to be invested by corporations in their projects, or returned to shareholders as dividends, or used as stock buybacks. In all cases, money was put into the hands of people who would use it for investment or consumption. That is part of the reason that economic growth has taken up and wages have risen, especially at the lower skill end of the employment spectrum. Trump’s regulatory reforms (see Obama’s naivete about shovel ready jobs) boosted the economic impact even more.

Bloomberg notes that President Trump initially promised $4 trillion would be repatriated, but this has not proven to be true. OK, he was optimistic and employed hype. But I am not going to complain that he both generated tax revenue (unlike Obama’s stimulus which spent taxpayers’ funds) and increased corporate investment and job opportunities for Americans, thereby increasing the net national wealth.

https://www.americanthinker.com/blog/201...ax_penalty.html