The prospect of a corporate tax holiday for repatriated foreign earnings is unlikely, and even if it were to become law, it would have minimal impact on the economic outlook, notes JPMorgan.
Dubravko Lakos-Bujas and team at JPMorgan in their March 4, 2015 research report titled: “The Prospect for Repatriation of Foreign Earnings. 25 US Multinationals with Highest Cash Balance Abroad” believe multinationals have left substantial earnings in controlled foreign subsidiaries, over $2 trillion.
Equity market implications under three scenarios
The JPMorgan analysts note the corporate tax rate in the U.S. is among the highest in the developed world, with U.S. multinationals paying well below this rate, while domestic companies pay closer to statutory tax rate.
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