Will the Republican Tax Bill Be Aimed at the Economic Past, or the Future?<br />And for companies that see promising opportunities, the booming stock market and low interest rates mean<br />that capital is readily available on favorable terms already; it’s not clear why a company would invest in a new factory, for example, using repatriated overseas profits but not using money borrowed at a low interest rate by issuing bonds.<br />“A lot of the reason so much money is socked away overseas is<br />because of the ability of large multinationals to shift income on paper, so you’re kind of rewarding bad behavior.”<br />Business lobbyists argue that when companies return money home, they will use it to create jobs and investment in the United States.<br />Among them: Whether, and how, to incentivize American companies to bring home the trillions of dollars in accumulated profits<br />that they have kept parked overseas to avoid the 35 percent federal tax they would have to pay by repatriating the money.<br />“With repatriation at a lower rate, you’re not only providing a tax cut for choices<br />that have already happened, but you’re rewarding choices that involved heavy tax avoidance and gaming of the tax system,” said Lily Batchelder, a law professor at New York University.<br />It’s easy to see why the smart thing politically would be to apply the lower rates to 2017; more money<br />would show up in taxpayers’ refund checks in the spring of 2018, ahead of the midterm elections.<br />Depending on how it is structured, that could amount to a one-time boon for companies with large overseas profits,<br />essentially rewarding past success rather than providing the incentives to invest in future growth.
