Chart of the Day: Here’s What Corporations Did With Their Tax Cut

The Congressional Research Service has analyzed the 2017 Republican tax bill and concluded that it had no noticeable effect on GDP, consumption, domestic investment, or wages. But wait! What about the reinvestment of overseas profits, which the act allowed companies to repatriate at a low tax rate?

One of the major sources of anticipated increased investment through supply-side effects is international capital flows….Some also argued that eliminating the tax barrier to repatriating funds (as was done with the tax revision) would lead to reinvestment in the United States of unrepatriated earnings held abroad in U.S. subsidiaries.

Let’s check! What happened to all those repatriated earnings?

Companies repatriated more than a half-trillion dollars (blue line), but reinvested earnings actually turned negative for a couple of quarters before returning to the same level as before. End result: bupkis. Nice work, Republicans.

Of course, none of the Republican arguments in favor of the tax act were offered in good faith anyway, so it’s hardly a surprise that it had little to no effect on the economy. As the report puts it, “Fiscal stimulus is limited in an economy that is at or near full employment.” The real goal of the tax act was to reduce the taxes of corporations and rich people. Rep. Chris Collins explained things elegantly: “My donors are basically saying, ‘Get it done or don’t ever call me again.'”

So they got it done. Now their donors are happy and will continue contributing money to Republican candidates. What’s not to like?

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

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