The Overseas Cash Grab
NYT Dealbook points to a how the 2 trillion dollar overseas money can come “home” and how money is spent. 2005 comes to mind the last time repatriation of “overseas money” comes to mind.
Linda Beale Repatriation holiday lobbying – Money Speaks and More on repatriation.
Taxprof blog here and Senate report here.
The Overseas Cash Grab (from Dealbook)
Corporate chiefs in the United States have bemoaned for years the taxes that they would face if they brought home more than $2 trillion in cash kept overseas.
They may soon stop complaining. President Trump and the Republican-controlled Congress are widely believed to be open to lowering taxes on funds that companies bring back.
For lawmakers, the idea of a tide of funds coming home creates visions of infrastructure investment and job creation. But on Wall Street, it has set off hopes for another spending priority: mergers and acquisitions. And deals often lead to job losses.
The differing visions come amid a broader debate about whether cutting taxes spurs investment or leads to higher incomes and more jobs.
Among other things, there are questions about the ways people respond to lower taxes. If your tax is lowered, would you strive to be more productive at work? Or would you take advantage of a higher income that came at no extra effort?
Either way, the more pressing issue may be at whether a tax overhaul can happen at all.
Cash??
These are bookkeeping entries.
The cash aspects are managed like all cash, it is somewhere. Likely quite a bit is tied directly to the US banking system.
We need a study just on the cash aspects.
I have trouble believing any article that lazily refers to the bookkeeping on what is in a tax-base subject to tax rates as if it was cash.
Detracts from some point about new revenues via taxation. When these recalculated tax bills are due, the companies will find the tax-paying cash somewhere to cover the transfers to Treasury (perhaps in an Irish bank, or a Cayman account, or a NYC bank who are tied to the institutions who manage this tax-transfer for the corporation).
Dont multinational companies have an effective tax rate around 10 percent, so payments to Treasury might be $200 billion. A good, one time amount, but it is NOT a matter of cash management or $2 Trillion.