Bring the Billions Home!
The end of year tax reform made big news, and the effect remains to be seen. What is fascinating is the issue of repatriation, and whether the big tech companies who have parked truckloads of cash offshore will now bring the billions home.
- Previously, the US’s corporate tax rate was a major disincentive. At 35%, it was the second highest in the world.
- Apple, Microsoft, and Google alone have $464 billion stashed in foreign countries.
- Now companies can take advantage of the one-time opportunity to repatriate their treasure chests and get taxed at just 15%.
- Beginning in 2018, the US corporate tax rate has been permanently reduced to 21%.
On a macro-level, it will be interesting to see the impact, particularly if these funds are deployed for reinvestment and job creation. Let’s hope!