Trump is looking to revive a discredited Bush-era tax gimmick
Tax repatriation holidays, explained.
Updated by Matthew Yglesias@mattyglesiasmatt@vox.com Aug 24, 2017, 8:30am EDT
Republican leaders still seem far from agreement on some fundamental questions about tax reform, but they appear to have all rallied around a truly terrible idea for economic policy. According to reporting from Nancy Cook at Politico, negotiators from the Trump administration and the congressional GOP have reached agreement on a plan to push for a discredited tax gimmick that will produce windfall financial gains for wealthy shareholders while doing almost basically nothing to help the economy.
“Among the decisions that the White House, Treasury and congressional leaders have settled on,” Cook writes, “is that any tax proposal will require U.S. companies to bring back earnings from overseas at a one-time low tax rate, a favorite proposal of the business community known as repatriation.”
The basic idea, which comes in different flavors, is to let companies that have stashed profits in foreign tax havens get a kind of amnesty for past tax avoidance. Back during Barack Obama’s administration, there was a fair amount of buzz around the idea of doing repatriation, as a gimmicky way to pay for an infrastructure building push. Obama’s economic policy team always vigorously objected to this notion, and Harry Reid didn’t like it either. Still, there was considerable evidence that under a Hillary Clinton administration, with Reid gone, some kind of repatriation-for-infrastructure-spending swap would have been on the table as Clinton looked for a bipartisan legislative deal.
Clinton didn’t win the White House, of course, and with Republicans running the show in Washington, repatriation is likely to take a different form — a gimmicky tax cut that can also be made to “pay for” additional tax cuts.
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https://www.vox.com/policy-and-politics/2017/8/24/16183674/trump-tax-repatriation
