Trump Says His Tax Break Will Get Companies to Hire More Workers. Companies Say It Won’t.
Heather Long | Wonkblog
In an interview about a corporate tax holiday, Alex Brill warns that the strategy doesn’t work:
“Trump wants to bring that money back to the United States to spur jobs and growth, and he’s been aggressively pitching a plan to offer companies a large tax break if they bring all those dollars back to America soon. Under Trump’s proposal, companies would only have to pay a 10 percent tax on money they bring back — a process often called ‘repatriation’ — rather than the usual 35 percent. . . . The [George W. Bush] White House tried this once before, and the results were grim. . . . Companies voluntarily brought more than $300 billion back to the United States during that window. The vast majority of it — 80 percent, according to Bank of America estimates — was used on share buybacks. . . . ‘This policy is not one that’s going to drive growth,’ said Alex Brill, a research fellow at the right-leaning American Enterprise Institute. . . . [S&P Dow Jones Indices’ Howard] Silverblatt and Brill predict that Trump’s plan would end up repeating what happened before: Companies will buy back more shares.”