Thanks to the Tax Cuts and Jobs Act (TCJA) of 2017, American businesses have repatriated over $1.04 trillion since its passage.
The Bureau of Economic Analysis (BEA) released the 2019 third-quarter account deficit report, which stated that repatriation numbers narrowed by $1.1 billion (0.9 percent), bringing the deficit to $124.1 billion. The second quarter deficit was a staggering $125.2 billion. The BEA stated, “The $1.1 billion narrowing of the current account deficit in the third quarter mainly reflected a reduced deficit on goods and an expanded surplus on primary income”.
Prior to TCJA’s passing, the corporate tax rate was at 35 percent, which incentivized companies to keep profits overseas to avoid being taxed. TCJA’s one-time 15.5 percent tax rate on corporate cash and 8 percent on corporate non-cash offers an incentive for companies to keep their business profits in America.
On January 29, 2020, Congressional Budget Office Director Phillip Swagel testified before the House Budget Committee. When asked if competitive tax rates were “essential to the long term growth” of the U.S. economy, he responded, “The lower corporate rate made the United States a more attractive place for global investment”.
Americans have much to celebrate two years after the passage of TCJA.