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Saturday, August 18, 2018

Trump brings $1.5 trillion home to America

Before I get into this news story, let us take a stroll down memory lane. I will start with a CNBC from September 26, 2016, "US companies are hoarding $2.5 trillion in cash overseas." These were overseas profits.

The story said, "American companies are holding $2.5 trillion abroad, an increase of nearly 20 percent over the past two years, according to the latest calculations from forecaster Capital Economics. The total is equivalent to nearly 14 percent of total U.S. gross domestic product."

Democrats wanted that money. They believed they were being cheated out of tax revenue.

Months earlier, the Washington Post reported, "The report highlights what has become a growing frustration for Congress: U.S. companies have refused to bring the profits they earn overseas back home where they face the highest tax rate in the developed world, 35 percent.

"Instead, hundreds of companies simply leave the funds overseas. Some are waiting for Congress to lower the rate, or hoping for a window of amnesty. But others are pursuing inversions, in which they buy or merge with a smaller foreign company and move their headquarters overseas where they will be taxed less and can gain access to their unrepatriated foreign profits."

To his credit, Obama proposed a one time lowering of the tax on overseas profits of 19 percent.

Obama had eight years to get it done, plus four as a U.S. senator.

He failed.

In his first year, President Trump did it. He dropped the taxes on overseas profits to 15.5 percent -- but in some cases it is as low as 8 percent.

Plus our beloved president also got Congress to drop the corporate tax rate to 21 percent -- down from 35 percent.

We call this leadership, something Obama would not understand.

Not a single Democrat voted for President Trump's tax cut. Not one applauded the results of this tax cut.

Now for the news from MSN: "The biggest U.S. asset managers are going head-to-head to win a piece of a $1.5 trillion corporate cash comeback. That’s the sum companies are expected to bring onshore under the U.S. tax overhaul passed last year, according to Invesco estimates. About $400 billion has already been repatriated, according to the firm."

That is 60 percent of the money parked overseas.

Under Obama, we got nothing for it. Under President Trump, we will get $150 billion to $200 billion.

Allow me to correct myself. That is just the government's share. We get the full $1.5 trillion, which will be invested here.

That Invesco report answered how the repatriated funds will be used: "While many companies have highlighted their plans to increase employee compensation and capital expenditures in the US, we expect a significant portion of repatriated cash to be used for stock buybacks and mergers and acquisitions transactions. We believe the repatriation tax will incentivize companies to use their own overseas cash to fund buybacks and M and A in place of debt issuance."

The companies will come out stronger, employees will make more money, and pension funds will be fattened through the buybacks and the like. This will strengthen our economy.

I have two words for those who would criticize the buyback: Quantitative Easement.

Obama had the Federal Reserve pour trillions into the stock market to keep it afloat for eight years.

President Trump is having the companies do this.

Everyone agreed in 2016 that we wanted this money brought back to the USA. Critics now are just saying the grapes are sour.

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Please enjoy my books in paperback and on Kindle.

Trump the Press covers the nomination.

Trump the Establishment covers the election.

Fake News Follies of 2017 covers his first year as president.

For autographed copies, write me at DonSurber@gmail.com

10 comments:

  1. Silly wabbit. If it was YOUR money why doesn't it have your name on it??

    ReplyDelete
  2. Good catch Don! The winning is awesome!

    ReplyDelete
  3. Crumbs, Don, crumbs

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  4. Manafort is being prosecuted for doing essentially what these companies did: hiding their profits overseas. He's being prosecuted for doing it; they are getting a tax break.

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  5. Tony Podesta, who did the same thaing that Manafort did, is not being prosecuted. Dimocrats skate. - GOC

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  6. According to the Washinton Examiner:

    "The U.S. national debt has increased by more than half a trillion dollars in less than six months, amid predictions that the U.S. is on the verge of returning to another explosion in government borrowing.

    The debt rose to an all-time high of $21.4 trillion on Thursday, according to government data posted Friday. That's more than $500 billion above the $20.88 trillion seen March 7, just a bit more than five months ago.

    ReplyDelete
  7. According to the Washington Examiner:

    "The U.S. national debt has increased by more than half a trillion dollars in less than six months, amid predictions that the U.S. is on the verge of returning to another explosion in government borrowing.

    The debt rose to an all-time high of $21.4 trillion on Thursday, according to government data posted Friday. That's more than $500 billion above the $20.88 trillion seen March 7, just a bit more than five months ago.

    ReplyDelete
    Replies
    1. Waddaya know, it’s the sixth Marx Brother ... “Echo”.

      Delete
    2. Funny, this year like the year before and the year before that and the year before that, etc the feds have brought in record money.

      Obama did via higher taxes and helping companies ship job outside the US.

      Trump does it via lower taxes and bringing jobs back.

      Both spend a lot, just as W and Clinton and HW and Reagan and etc.


      Now, which is better, getting fed $$ by more people working or by breaking the backs of Americans.

      Delete
  8. A chunk of that money will be invested in new and refurbished manufacturing facilities. MAGA!

    ReplyDelete