Posted on 06/27/2018 9:28:55 AM PDT by SeekAndFind
They said it wouldn't happen, but it did: The money companies stashed overseas to protect them from high U.S. corporate tax rates is flooding back in, boosting growth, jobs and confidence in the economy. Thank the Trump tax cuts.
All told, the Bureau of Economic Analysis (BEA) reported, some $305.6 billion returned to the U.S. from overseas accounts. That's a $1.2 trillion annual rate, and far more than the $35 billion one year before.
The BEA's analysts explain why this happened: "The large magnitudes (of inward capital flows) ... reflect the repatriation of accumulated earnings by foreign affiliates of U.S. multinational enterprises and their parent companies in the United States in response to the 2017 Tax Cuts and Jobs Act."
In short, the Trump tax cuts did it.
American companies were commonly estimated to have about $2.6 trillion parked in overseas accounts as of 2017. So in the first three months of 2018 alone, some 12% of that overseas stash came back to the U.S. It's now available here for companies to invest, pay out in dividends and bonuses, hire new workers, purchase new plants and equipment, or just buy back stock.
It's a shot in the arm for the U.S. economy.
Of course, you say. It's entirely logical to suppose that by slashing the top corporate tax rate from 35% to 21% — a 40% reduction — and by giving one-time breaks to those companies that had piles of cash sitting overseas, money would flow back into the U.S. After all, Trump's 21% tax rate is now lower than the current OECD average corporate tax rate of 25%.
But last year, when the tax cuts were still a topic of conversation, some in the media seemed to have trouble with this idea.
(Excerpt) Read more at investors.com ...
No, no. The Democrats have told us that the economic good news has nothing to do with Trump or his policies or the tax bill.
They tell us that Trump inherited a growing economy from Obama and his policies. They tell us that Obama planted the seeds of economic growth, seeds which are sprouting only now.
OMG we’re gonna need a bigger winnamin....
It's nothing but a tax cut for the rich, and crumbs for the working person, but my son got a $2,000 crumb, and he is very grateful.
He said the new tax rates will result in his savings of about an additional $ 2,500 for the tax year 2018.
Bringing it back! MAGA!
Or just stick in the bank and let the bank loan it out as part of its lending practices
It is like there is A Stable Genius at the helm.
We win by GETTING GOVERNMENT OUT OF THE WAY. We lose with more government via boneheaded “protectionist” tariffs and failure to finish the job of getting government out of the way by abolishing federally protection of unions, high taxes, regulations, minimum wage, subsidies, and a federally-created weak dollar.
Respectfully disagree.
Go America. :)
Hopefully you at least understand the need to abolish federal protection of unions, high taxes, regulations, minimum wage, subsidies, and a federally-created weak dollar.
Indeed.
I was only (strongly) opposing your opposition to protectionism.
It is time to be for American industry once again.
In my view.
“Protectionism” for the greatest economic power on earth is fraught with problems. We’ll talk about it sometime if you want to.
We are in a real struggle, with China.
China is much of what America is not. It is cheap, competitive, and growing very, very fast.
It is also HIGHLY protectionist.
America needs to become much, much, much more competitive. Soon.
Or we will lose the lead, you speak of.
Already, it is a big conflict.
Abolishing the governmental economic roadblocks I listed is EXACTLY what it will take to bring back American economic competitiveness.
Tariffs blunt competitiveness, penalize the American consumer, and mask the underlying causes of our economic problems. Tariffs are palliative, not curative. It makes people feel good without fixing the underlying causes of our price, quality, and competitive malaise.
China is not the problem. China cannot sustain a vibrant economy under government command and control. It may appear so temporarily, but government command and control is why China has been in the economic backwaters. Their subsidies and tariffs hurt them as much as ours hurt us. It may seem like they are “winning” but I don’t believe that is really the case. I think their lack of freedom make them much like the USSR - a paper tiger with great underlying economic flaws and weaknesses.
BTW, “trade imbalance” is not a measure of winning or losing - there is nothing inherently lost about paying to buy a product instead of producing a product being paid for. The popular implication of “trade imbalance” is a fiction like so many popular notions these days. The issue is in what types of businesses is a nation naturally geared to engage. No nation including America can except to be the best at everything. You have to look at what SHOULD be a nation’s most competitive products and why.
To the degree they truly have “trade free” zones, to that degree China has prospered. To the degree they remain under the iron fist of their government, they fail. Same with us. Our federal government is THE reason for our economic failures and our free market economy is what will win out in the end. America’s free market economy policy is what will eventually win the day - always has, always will.
I’d like to see a little winning in my paycheck but working for a non profit, no chance...
This will not be in the media in the USA.
United Technologies, based in the blue state of Connecticut, used it (overseas money) to hire more employees...mostly in Connecticut. Is that crumbs, Maxine?
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