A Reverse Tax Repatriation Holiday
Now and again, people (particularly large companies with vast foreign holdings) press Congress for a Tax Repatriation Holiday. The concept is, you bump the domestic money supply and generate some much needed inflation by encouraging companies to bring their earnings home. What better way to encourage them than by providing a tax break as an incentive?
Since companies are currently sitting on huge wads of cash, encouraging them to bring it home now might generate only larger wads of cash, with no attendant economic benefits and lower tax revenues to boot. So how about a reverse tax repatriation holiday? Instead of promising lower tax rates if they bring profits home now, promise higher tax rates for any profits brought home after a future date. Add a bit of stick in with the carrots. As a side benefit, a reverse tax reparation holiday would also provide more scope for future tax reparation holidays.