Well, we don’t know for certain what he’s going to announce (and maybe even he doesn’t know what he will) — but according to Bloomberg…
President Donald Trump plans to propose a 10 percent tax on more than $2.6 trillion in earnings that U.S. companies have stockpiled offshore, said a White House official familiar with the president’s tax plans.
Proceeds from the so-called “repatriation tax” would represent a one-time source of sorely needed revenue, which could offset some of the deep tax cuts Trump has proposed for businesses — or could be devoted toward popular, bipartisan initiatives, like infrastructure spending.
…Economists say that removing the tax-related disincentive to repatriation would stimulate the U.S. economy by encouraging domestic investment — though it’s also possible that much of the cash would be plowed into stock buy-backs or shareholder dividends.
Gee, I wonder if the tax holiday is likely to spur private investment, higher employment. Or will this just be a gift to stock owners? Somebody should investigate this question, using formal statistical techniques, given the potential cost to taxpayers.
This paper analyzes the impact on firm behavior of the Homeland Investment Act of 2004, which provided a one-time tax holiday for the repatriation of foreign earnings by U.S. multinationals. The analysis controls for endogeneity and omitted variable bias by using instruments that identify the firms likely to receive the largest tax benefits from the holiday. Repatriations did not lead to an increase in domestic investment, employment or R&D — even for the firms that lobbied for the tax holiday stating these intentions and for firms that appeared to be financially constrained. Instead, a $1 increase in repatriations was associated with an increase of almost $1 in payouts to shareholders. These results suggest that the domestic operations of U.S. multinationals were not financially constrained and that these firms were reasonably well-governed. The results have important implications for understanding the impact of U.S. corporate tax policy on multinational firms.
In other words, the main beneficiaries of this plan would, at first glance, appear to be owners of equities.