At least $2.6 trillion in American corporate profits are parked outside the country, and President-Elect Donald Trump’s major tax reform plan could bring it back into the United States — which could provide a big boost to the economy and federal revenue.

Trump’s plan is part of his larger business tax plan to lower the corporate tax rate from a top rate of 35 percent down to 15 percent.

“We want to bring the money back here. Under the present law, you’re better off leaving it in Japan to build a factory. That’s stupid policy.”

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A key element is also providing a one-time tax rate of 10 percent on offshore corporate profits brought back to the United States, or repatriated money. After the one-time tax, the country would move to a “territorial” tax system, meaning only profits earned inside the country would be taxed. Ideally, this would do away with a disincentive for companies to reinvest inside the United States.

The Joint Committee on Taxation estimates that there is $2.6 trillion in offshore profits from American companies. That’s money that could be used to build in the United States. Repatriation, in economic terms, is the process for a U.S. parent company moving profits from a foreign-based affiliate back to the U.S. headquarters or to U.S. shareholders.

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Currently, profits American companies make abroad are taxed only when the money is brought back into the country, up to 35 percent. Because the United States has one of the highest corporate tax rates in the world, corporations seek to avoid paying the rate by leaving the money offshore. So, the federal tax code is an incentive for U.S. companies to store foreign earnings in foreign subsidiary countries with lower tax rates.

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This is one rare area where the Left doesn’t want to be more like Europe. Of the 36 countries in the Organization for Economic Cooperation and Development, only the United States, Mexico, Ireland, South Korea, and Israel have the antiquated tax code. The other 30 countries, including Canada, Japan, Britain, France, Italy, and Germany have a territorial tax system that Trump wants to move closer to.

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Grover Norquist, president of Americans for Tax Reform, believes the repatriation tax rate will likely be lower than 10 percent when Trump works out the specifics with House Republicans.

“We want to bring the money back here,” Norquist told LifeZette. “Under the present law, you’re better off leaving it in Japan to build a factory. That’s stupid policy.”

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The new money in the United States will mean companies will have an incentive to expand locally and that will ultimately mean more federal revenue, Norquist predicted.

“Under a territorial tax system there is no pressure for tax inversion, no advantage to selling to a Dutch company just to pay a lower rate, or having a Canadian company buy Burger King just to make the company more valuable,” Norquist added.

In a written statement to the House Ways and Means Committee in February, Michelle Hanlon, an accounting professor at MIT, gave a simplified example:

“Assume a foreign subsidiary of a U.S. parent earns $10 million and pays $2 million in local tax to the foreign jurisdiction. The remaining earnings could be repatriated to the U.S. parent or left in the foreign subsidiary. If repatriated, there would be an additional U.S. tax of $1.5 million ([$10 million X 35% U.S. rate] – $2 million credit for foreign tax). Thus, if left in the foreign subsidiary, there would be $8 million to invest, but if repatriated to the U.S., there would only be $6.5 million to invest (less if state income tax is imposed). In contrast, a UK company, for example, could repatriate the $8 million back to the UK and then invest the full $8 million in their home country (or they could change their mind and invest the full $8 million in a foreign country depending on the investment opportunities).”

Critics of the proposal say the repatriation tax of just 5.25 percent signed by President George W. Bush had little impact on the economy and jobs. Norquist noted that’s because it was a temporary measure that sunset — or a “tax holiday.” By contrast, Trump is proposing a permanent tax reform.

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There are three ways to repatriate corporate profits outside the United States. The “tax holiday” is a voluntary system with a time window. The valid concern here is that companies take advantage of the holiday, but continue to store the cash overseas and just wait for the next holiday. The second, President Barack Obama favors a “transition” which would offer a one-time lower rate before requiring companies pay into a new tax system that would tax the companies for all overseas profits. The third, which Trump’s proposal would fall under, is a “deemed repatriation” system, which would be a one-time tax, then cease to charge companies for profits overseas under a territorial system that more resembles other industrialized economies.

President Obama’s goal was to go after the overseas profits by taxing them, while some Democrats would use rhetoric like “Benedict Arnold companies.” Putting philosophy aside, punishments for offshoring might make sense if one believes companies would stop looking for creative loopholes to avoid taxes. They wouldn’t. If government were that smart, the American economy wouldn’t be missing $2.6 trillion.

So even if you think corporations are evil, incentives to bring the money back make more sense. Nevertheless, it’s almost certain Democrats will fight this as helping big business — even if that means more American jobs.