transporter
Well-Known Member
Gilligan might want to read this one...but then again maybe not...he might learn something and he certainly wouldn't want THAT to happen!
Trump said his tax cuts would bring $5 trillion into the U.S. We have 97 percent to go.
...
...
...
Trump said his tax cuts would bring $5 trillion into the U.S. We have 97 percent to go.
“We expect to have in excess of $4 trillion brought back very shortly,” he told a group of business leaders in August, and in all likelihood something “close to $5 trillion.”
The only problem is that Trump’s claim shouldn’t be true, and so far, it hasn’t been. The Wall Street Journal estimates that the nation’s biggest publicly traded companies have repatriated $143 billion this year, while the Federal Reserve puts the number at a slightly more than $300 billion. Whichever number is accurate, it’s 94 percent to 97 percent less than Trump predicted.
There’s a simple reason the Trump tax cuts haven’t inspired companies to move that much money to the United States: The money was already here.
...
The important thing to understand is that foreign profits were taxed when companies brought them back to the United States to put into their businesses but not when they brought them back to put into other things — which, of course, is exactly what cash-rich companies such as Apple did. Of the roughly $250 billion that the tech giant was supposedly holding overseas last year, about $208 billion was in U.S. Treasury bonds, corporate bonds, or Federal National Mortgage Association and Federal Home Loan Mortgage Corp. debt.
...
The tax cuts aren’t likely to prompt companies to invest more in their own businesses, either. Again, this has already been happening — companies were using borrowed money rather than their overseas earnings to invest. This saved on taxes in two ways: Companies could deduct the interest they were paying on their borrowing, and if they could persuade Washington to give them another tax repatriation holiday, like the one in 2004, they would not owe Uncle Sam much on their foreign profits, either. This was more than worth the minimal amount they had to pay to borrow money in the first place. And so, they’ve been making the investments in their businesses without needing a tax break on their overseas earnings to do so.
...
Which is to say that as beneficial as the tax cuts may be for investors, they’re not significant for the U.S. economy. Under the new tax law, companies will just take the money they had been putting into U.S. Treasury and corporate bonds and use it to either pay down their debt, buy back their shares or pay out bigger dividends. But, in any case, the growth in American jobs and investment that is “supposed to follow” will “not occur.”
That is what the Senate Permanent Subcommittee on Investigations said when it looked at what happened after the 2004 tax repatriation holiday. In all, the 15 companies that “brought back” the most money to the United States back then cut their workforces and research and development spending. But they did increase their stock buybacks and boost executive pay. In fact, a group of researchers from the Massachusetts Institute of Technology, Harvard University and the University of Illinois found that for every $1 that was repatriated during that time, shareholder payouts went up 60 to 92 cents.