Updated: Hundreds of billions of dollars have poured back into the US

Updated: Hundreds of billions of dollars have poured back into the US 

Bottom Line: A few months ago, I brought you the story of how the tax cuts were impacting the economy within the first six months of their existence. In a separate story today, I demonstrated that employees have been the single biggest beneficiary of the Tax Cuts and Jobs Act. I also wanted to update my research on how much money has been repatriated into the United States benefitting the US economy generally so far in 2018.  

Earlier this year the Bureau of Economic Analysis showed a record amount of repatriated money flowed back into the United States in first quarter of 2018 on back of tax reform having passed. Here's the comparison... 

  • $305 billion repatriated Q1 2018 
  • $38 billion repatriated Q1 2017 

Not only did $267 billion additional dollars flowing back into the US year over year, but the tax revenue generated from the repatriation was $46 billion as well. For just the first quarter of the year! The most recent updates from Investco and Goldman Sachs have shown what’s happening in real-time as we wait for new government reporting to demonstrate the specifics. The highlights... 

  • According to Investco well over $400 billion has already been repatriated and they projected a total of $1.5 trillion to be repatriated 
  • Goldman Sachs is projecting $1 trillion in repatriated money

That's all upside to our economy and our treasury. It's also a reminder that historically reduced tax rates lead to an increase in tax revenue based on increased economic activity (in contrast to the political narrative of those who opposed the tax cuts). To put this in perspective President Obama’s ill-conceived “stimulus” plan was $825 billion in federal debt spending that we have to pay for with interest as tax payers. We’re talking about, using the conservative pacing, $1 trillion in cash flowing into our economy that wouldn’t have otherwise and that produces an extra $125 billion in tax revenue to the federal government. It’s an incredible story that’s part of the economic success we feel but might not see and certainly that doesn’t get widely reported. 

 

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