US: Tax cut to have an impact on corporate earnings and on repatriation of profits - Natixis

In the end, the United States looks set for a sharp cut in tax on corporate earnings (from 35% to 21%) and a low tax (15.5%) on earnings held abroad and repatriated to the United States, explains Patrick Artus, Research Analyst at Natixis.

Key Quotes

“US companies’ available cash flows are therefore going to increase sharply. How will this additional cash flow be used? Might it lead to an increase in corporate investment?”

“When we look at:

• The current level of US corporate investment;
• Whether or not US corporate investment has been reduced by financing problems;
• The recent and past behaviour of US companies regarding cash holdings, acquisitions, share buybacks, dividend payouts and investment,

it seems that additional available cash flows for companies in the United States could be expected to have only a small effect on investment.”