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U.S. Corporations' Repatriation of Offshore Profits
Report

U.S. Corporations' Repatriation of Offshore Profits

Michael Smolyansky, Gustavo A. Suarez and Alexandra M. Tabova
Federal Reserve Board, 2018
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Editorial Rating

8

Qualities

  • Analytical
  • Eye Opening
  • Overview

Recommendation

Corporate leaders have responded to the 2017 US Tax Cuts and Jobs Act with a wave of capital repatriation from overseas, bringing back in just the first three months of 2018 almost one-third of the $1 trillion in foreign-earned assets stashed abroad. Economists Michael Smolyansky, Gustavo Suarez and Alexandra Tabova examine the repatriation boom and how businesses are currently deploying this capital in an insightful report for company executives and tax policy experts.

Take-Aways

  • As a result of massive disincentives, US companies held $1 trillion in assets abroad to avoid domestic corporate tax rates.
  • The 2017 Tax Cuts and Jobs Act removed this barrier and also offered corporate leaders a way to bring back the existing pool of cash.
  • In the first quarter of 2018, companies repatriated some $300 billion in capital.

About the Authors

Michael Smolyansky, Gustavo Suarez and Alexandra Tabova are economists with the Board of Governors of the Federal Reserve.

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