Big buzz these days about giving American companies a corporate tax holiday to repatriation of funds from abroad, seems like Republicans and Democrats both agree on this. Most estimates suggest that American corporations have $1-$1.5 trillion in retained earnings abroad and foreign operations account for about a quarter of the S&P 500 profits.
I think this kind of corporate tax break would be beneficial to the US dollar and U.S. asset markets. on the other hand impact of a corporate tax holiday on the dollar and U.S. stocks will be sufficiently negligible for medium term investors. If you remember in 2004-05, American companies were allowed to repatriate their earnings from abroad at a tax rate of 5.25% to create 500k jobs in two years. But it didn’t worked. A repatriation holiday — a one-off occasion where companies could bring overseas earnings into the U.S.
There is no reason to believe that the full amount would be repatriated. But worth trying!!!
Do you think it Would Benefit U.S. Markets Or Currency?