WASHINGTON – President Donald Trump speaks often of a pile of money sitting overseas that will come rushing back into the U.S. because of his tax plan. An AP Fact Check finds that’s something of a mirage.
Some U.S. companies park profits overseas because of the high corporate tax rate at home. A lower rate should indeed bring some profits back to the U.S. But Trump’s estimate of $4 trillion appears unrealistic. And when companies last got a tax holiday, they tended not to use it for hiring or operations.
A 2004 law temporarily cut taxes on repatriated profits to 5.25 per cent from 35 per cent. About 843 companies brought back $312 billion. But a 2011 Congressional Research Service report found that the tax holiday “did not increase domestic investment or employment.”
EDITOR’S NOTE _ A look at the veracity of claims by political figures