Nice catch!

need it here. Thinking they will is just more supply-side eco BS. Companies expand when there is an increase in demand or they believe there will be an increase in demand. "Build it and they will come" is a great movie line but it's not the way successful businesses make decisions. Maybe that's part of the problem. We have a crappy business man in charge.

they get a foreign tax credit for the taxes paid to the foreign country, but they still have to pay the difference to the irs.

they need to repatriate the money if they want to use it for dividends or stock buybacks.


currently, even companies awash in cash, like apple, actually borrow money in the u.s. to achieve the same effect without the tax consequence.

if companies figure taxes are temporarily low (e.g., if they figure democrats will regain power and restore higher tax rates), then they have an incentive to repatriate the overseas profits while the lower tax rate applies.


note that in sending those funds to shareholders, much of that money will go right back overseas as many investors are not american.
in any event, bringing that money back to the u.s. does *not* mean it will be *reinvested* in the u.s.

There is no incentive to repatriate the money. But, it's a strong selling point that Ryan & Mnuchin are using. It's nonsensical.

it's stuck in the corporation, albeit overseas, until the company decides to repatriate so it can get it to shareholders via dividend and/or stock buybacks.

they might as well do it at a lower tax rate than a higher tax rate, and that's been the logic for parking it overseas for years now, waiting for a lower tax rate.

now that it's here, quite a number of companies are going to do exactly that.


but it won't have much of a positive effect, if any, on our economy.

That's too "x therefore y" for me. They are making money on that money overseas. If they bring it back, all they have to do is bring back the margins, not the principal.

And, despite their statements, nobody holding stock in those companies with large overseas holidings is complaining about dividend or growth values.

They bring back 10% of the earnings on that money, and dividends go up a pinch. Gains won't be measureable as it can be attributed to these new funds.

So, we're going to have to agree to disagree on the "incentive".

The companies announcing buybacks include some of the biggest in the world, like Home Depot, Oracle, Honeywell, Bank of America, Anthem, Boeing, MasterCard, and United Airlines. All of the announcements have come since December 5.

https://theintercept.com/2017/12/18/tax-bill-corporate-rate-stock-buyback/

(follow the link for the complete list.)

Buybacks happen all the time. And $70.2 billion, while a lot, is still a tiny fraction of the equity markets.

I'm not making the correlation. Others certainly are free to. Not me, though.

and when it's during a time when they're discussing tax rates, it's an easy correlation.

i agree it's still nowhere near the entire market size, but again, i don't think it will have an material positive effect.

but it will happen.

What matters is what they do with the money, regardless of where it is "located." Most of it is in cyberspace anyway.

Without an expanding economy that requires more plant and equipment and local hiring, nothing will happen. There are no incentives in this bill to reinvest in plant and payroll within the borders of the US.

Any counter to the "they'll bring money back" is an appropriate rhetorical weapon.

they're not going to return the money to the US. A lot of the bigger corporations are already effectively paying 0 taxes here in the US, so cutting the rate won't do much for them.

That said, some mid-sized corporations that still have US operations may reconsider outsourcing to other countries

. . .all day about how badly we frame the debate, and this is one more example. Ryan spews his nonsense and we don't have a ready made reply set up to debase it.

the wingnuts would be all over the media outlets decrying the BS

Somebody got a post removed on this thread? That seems bizarre.