American money flowing back into America
By Suzanne O’Halloran
June 26, 2018
America’s CEOs are not wasting anytime in taking advantage of [President Trump’s] tax reform plan. Over $300 billion was repatriated to the U.S. in the first quarter, according to the Bureau of Economic Analysis (BEA) — the most on record.
“U.S. firms that used to build their factories overseas in order to avoid U.S. taxes, they stopped in their tracks because of the tax bill, they are bringing all the money home,” said Kevin Hassett, chair of the president’s Council of Economic Advisers, during an interview on FOX Business’ Varney & Co. in June.
The BEA notes the main driver of the repatriation surge is that companies are no longer taxed on foreign earnings when returning the funds to the U.S. “We fixed that really, really stupid thing” said Hassett. By comparison just $38 billion was repatriated during the same period a year ago.
While the BEA keeps the names and sums of corporations repatriating confidential, the latest data appear to show CEOs are likely sticking to their pledge to bring more money earned overseas back to the U.S. promised shortly after the tax plan was signed by President Trump in late December 2017.
While it is not crystal clear how the lion’s share of funds returning to the U.S. will be used, pro-growth economists hope it will be used for hiring, boosting wages and other moves that will benefit the American worker and eventually trickle down to the broader economy. This is why many economists are boosting their GDP forecasts to between 3% and 4%.