American companies have brought $1 trillion back to the United States since the passage of President Donald Trump’s tax cuts in 2017, according to new U.S. Department of Commerce data.
Bloomberg News reported the repatriation figure since the Tax Cuts and Jobs Act of 2017 took effect last year, though noting that it was short of the $4 trillion that Trump had initially promised:
Investment banks and think tanks have estimated that American corporations held $1.5 trillion to $2.5 trillion in offshore cash at the time the law was enacted. Before the overhaul, companies were incentivized to keep profits overseas because they owed a 35% tax when bringing it back and could defer payment by keeping funds offshore. The law set a one-time 15.5% tax rate on cash and 8% on non-cash or illiquid assets.
As the Tax Foundation has noted, the tax on past overseas profits is payable over eight years, whether or not the funds are repatriated. Going forward, companies will only be taxed on earnings in the U.S.
The repatriation rate is somewhat slower than initially expected, the Wall Street Journal reported last year, because the U.S. tax rate is only one factor in companies’ decision to keep profits abroad: full story