multinationals would repatriate foreign earnings only if they intend to cut back on foreign operations
otherwise, why forfeit that capital base?
it is essential for continuation of foreign operations
profit held can be invested anew
profit sent away cannot
I dont see much repatriation happening
why would they send a flood of cash home to USA?
for better growth opportunities?
doubtful
with higher taxes, higher currency, higher health costs, higher debt loads, higher regulatory hurdles, higher environmental obstacles, USA is not the place to be
here is an analogy
suppose as a teenager, you are having a party with some booze and some girls and other friends in the apartment over the garage, the carriage house
your parents tell you that you can come home and repatriate your bottles of booze, with amnesty on the violation (underage drinking)
but you know that means you would have to send your girls away
sounds appealing, right?
so you do so, get back under M&D's roof, and the party ends
you are no longer having any fun whatsoever
you are not whooping it up with rum & cokes
if you had stayed, you'd be getting laid
the only benefit is avoiding a visit by police for the underage drinking violations
there are no such rules against making money abroad
every year, a similar issue comes up with March 31st deadline for Japanese to repatriate their foreign-held money abroad, bring it back to Japan, convert it to local JYen currency, and continue whatever
it is annually a non-event, much ballyhooed, but a non-event
I suspect the Congressional lure of foreign money will have a much greater impact on speculators than in operational effects
and wear off very quickly
also, with such a deficit underway, I doubt the bill will pass
/ jim |
