Corporate America brought $665 billion of offshore profits back to the U.S. last year — falling well short of the $4 trillion President Trump predicted would return due to the 2017 tax overhaul.
President Trump speaks on tax policy during a visit to Sheffer Corp. in Blue Ash, Ohio, on Feb. 5, 2018.
Companies repatriated $85.9 billion in the fourth quarter of 2018, the lowest sum for the year and down from $100.7 billion the previous quarter,Corporations are bringing back more than they did in 2017, before the tax law was enacted, when U.S. firms repatriated $155 billion. But in touting the tax overhaul, Trump predicted trillions would return to the U.S., creating jobs and spurring investment. Investment banks and think tanks have estimated that U.S.
Companies had kept much of their overseas profit offshore over the years because a 35% tax kicked in only if they brought the cash back to the U.S. The Republican tax law set a one-time 15.5% tax rate on cash and 8% on non-cash or illiquid assets, regardless of the country where the profits sat. The repatriation figures were part of a quarterly report on the current-account deficit, which widened from $126.6 billion to $134.4 billion in the October-December period. The gap is considered the broadest measure of international trade because it includes income payments and government transfers.the tax-law changes would bring about the level of repatriation that Trump suggested.
Any claims made about how repatriated cash would boost wages and investment in the U.S. are likely overblown, according to researchers at the University of Richmond and Claremont McKenna College. “Policy changes have a relatively small impact on hiring and investment decisions if firms have relatively easy access to credit markets,” the
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