What did the Tax Cuts and Jobs Act of 2017 do?
The recent Tax Cuts and Jobs Act that was signed into law in December of 2017 included a one-time repatriation tax of 15.5% on the 2.6 trillion of profits held in overseas subsidiaries of U.S. multi-national corporations.
The 15.5% tax rate replaced the existing 35% top marginal rate that may have been deterring a lot of the U.S. companies from bringing those funds back to America. There was a similar tax holiday that was utilized in 2005 when a 5.25% one-time tax, also down from a top rate of 35%, motivated American businesses to repatriate 312 billion back from the U.S.
For the first nine months of 2018, American businesses actually repatriated 571 billion back to the United States. This was statistics coming from the Commerce Department.
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