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.
https://bongino.com/corporations-brought-back-1-trillion-from-overseas-due-to-trump-tax-plan/
