Translation: American shareholders would be better off, but American workers wouldn't.

AD

AD

Not that this should be a surprise. It's precisely what happened the last time there was a repatriation tax holiday in 2004. Indeed, according to a 2011 Senate report, the 15 companies that brought the most money back actually cut their R&D spending and over 20,000 jobs in the three years after the policy. So what'd they do with the $150 billion they brought into the country? Easy: they paid it out to shareholders either directly in a dividend or indirectly by buying back stock. It's not an exaggeration to say that's pretty much all they did. "A one dollar increase in repatriations was associated with an increase of almost one dollar in payouts to shareholders," concluded economists Dhammika Dharmapala, C. Fritz Foley, and Kristin Forbes in their 2009 study.

And keep in mind this happened despite the fact that the George W. Bush administration put rules in place to try to prevent it from doing so. The problem, you see, is that money is fungible: even if I don't pay out the money I brought back, bringing it back allows me to pay out other money. The broader point, though, is that our big companies are not capital constrained. If they see good investment opportunities, they can make them—borrowing costs, after all, are still very low by historical standards—whether or not they're able to bring their overseas earnings over here at a low tax rate. In other words, there aren't any jobs they want to create but can't afford to.

That doesn't mean corporate tax reform isn't a good idea. It still could be. A system that raised the revenue we need and didn't create an incentive for companies to "move" their intellectual property to, say, low (or no) tax Ireland would be better than one that did. But it does mean that it probably wouldn't be "something that is so phenomenal, far beyond what people even think," as Trump claimed during the campaign. Which is to say that it wouldn't exactly, to quote the president again, "turn America into a new magnet for new jobs. Instead, it would do a lot for Wall Street and the well-connected, and do nothing for Main Street and what Trump called the "forgotten men and women" of the country.