An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Monday, April 24, 2023
Will America win from de-dollarisation? — Thomas Fazi,
Summary. You know all this if you have been following this, but it's a useful summary for those not following it closely.
Foreign official reserves are only down about the 300B they disappeared from Russia a year ago:
https://ticdata.treasury.gov/Publish/mfh.txt
The rest is just repatriation of USD reserves by US multinationals due to the Trump tax cuts which iirc allowed a 5 year transition to qualify for the tax cuts..
US multinationals no longer have to keep the offshore USD retained earnings in foreign banks to avoid the taxes…
“ Section 965 imposes a transition tax on untaxed foreign earnings of foreign subsidiaries of U.S. companies by deeming those earnings to be repatriated. A mandatory tax of 15.5 percent on post-1986 accumulated foreign earnings held in cash or cash equivalents and an 8 percent mandatory tax on post-1986 accumulated foreign earnings held in liquid assets is imposed. The transition tax generally may be paid in installments over an eight-year period.”
This is what the TIC accounting is illustrating… it’s going to the TGA…
Not as catastrophic as we keep hearing on the MSM.
ReplyDeleteForeign official reserves are only down about the 300B they disappeared from Russia a year ago:
ReplyDeletehttps://ticdata.treasury.gov/Publish/mfh.txt
The rest is just repatriation of USD reserves by US multinationals due to the Trump tax cuts which iirc allowed a 5 year transition to qualify for the tax cuts..
US multinationals no longer have to keep the offshore USD retained earnings in foreign banks to avoid the taxes…
It was 8 years:
ReplyDeletehttps://www.irs.gov/newsroom/tax-cuts-and-jobs-act-a-comparison-for-large-businesses-and-international-taxpayers
“ Section 965 imposes a transition tax on untaxed foreign earnings of foreign subsidiaries of U.S. companies by deeming those earnings to be repatriated. A mandatory tax of 15.5 percent on post-1986 accumulated foreign earnings held in cash or cash equivalents and an 8 percent mandatory tax on post-1986 accumulated foreign earnings held in liquid assets is imposed. The transition tax generally may be paid in installments over an eight-year period.”
This is what the TIC accounting is illustrating… it’s going to the TGA…
AAPL alone had 300B stashed in Ireland…
ReplyDelete