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In its annual report on trends in foreign direct investment (FDI) - a measure of cross-border private sector investments - UNCTAD warned that the US tax reform package would have "significant implications for global FDI patterns over the coming years." The tax overhaul "will affect the multinationals and their affiliates," James Zhan, who heads UNCTAD's investment and enterprise division, told reporters in Geneva. He said the affected multinationals account for nearly half of some of the US$26 trillion in current FDI stock, which measures the total level of global direct investments at a given point. "The reform (could) lead to the repatriation of almost US$2 trillion of returned earnings," Zhan said, referring to the amount of easily-repatriated FDI cash US multinationals are estimated to be holding abroad. The new tax bill, which slashes the corporate tax rate to 21 per cent from 35 per cent previously, could entice some businesses to return with the promise of higher profits.
It is coming ''back' because it has been held somewhere else....
Repatriation, in financial terms, is the process of converting a foreign currency into the currency of one's own country. The dollar amount resulting from the repatriation of funds depends on the exchange rate between the two currencies at the settlement time of the conversion.
originally posted by: bigfatfurrytexan
a reply to: matafuchs
To be clear: the issue isn't your doctor sending home money to India to help pay the bills for mom. That is an exporting of funds that, generally speaking, is healthy for the US dollar.
This has everything to do with the morose policy of taxing earnings in foreign markets? If that is the case, that is a fantastic change in taxing policy (that, incidentally, will likely be a boon to Trump as well). There is no value with US dollars being used to fill off shore accounts.
originally posted by: xuenchen
Democrats were screaming their heads off about the money being somewhere else.
Now they scream when it comes back.
Vote 2018 for "stable minds".
Now, the last time repatriation funds saw a notable spike was in 2005, following passage the year before of the American Jobs Creation Act, which offered a tax holiday, among other tax benefits, under President George W. Bush. Yet, Mark Zandi, chief economist at Moody’s Analytics, tells FOX Business, at that time the benefit to the economy was minimal and will likely be the same this time around. “The repatriated cash will go to more stock repurchases, dividend increases, and paying for mergers and acquisitions. All of this has no significant impact on the economy” he said.