David Rosenbloom Discusses Corporate Repatriation of Profits with Tax Notes

Trump said that the administration is envisioning a temporary, 10 percent rate on the repatriated profits of U.S. companies. The White House tax reform outline called for a one-time tax on the profits of U.S. companies being kept overseas as part of a transition from a worldwide to a territorial tax system, but it left unsaid at what rate those profits would be taxed.

The president argued that the reason why U.S. companies are deterred from repatriating trillions of dollars in profits stashed overseas is twofold: First, U.S. corporate tax rates are too high, and second, the administrative process for repatriating those profits is too complex. Trump and Treasury Secretary Mnuchin said they would simplify the process for repatriation.

H. David Rosenbloom of Caplin & Drysdale, Chtd. told Tax Analysts he didn’t have “the slightest idea” what Trump and Mnuchin were referring to when they described the repatriation process as overly burdensome. Between 2004 and 2005, “companies had the chance to bring back funds taxable at a 5.25 percent rate. . . . They figured out how to do that to the tune of about $300 billion,” he noted.

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Excerpt taken from the article “Trump Dismisses Border Adjustability, Eyes Interest Deductibility” by Jonathan Curry for Tax Notes.