In his BusinessWeek.com column this week, “Stimulus of $1 Trillion Adds Nothing to Deficit,” Frank Aquila joins the chorus calling for enactment of Homeland Reinvestment, Part II, a sequel to highly successful legislation enacted in 2004.
When Congress lowered the “toll charge” in 2004 on bringing money back to the United States, companies repatriated some $300 billion to the U.S. economy, about 1.7 percent of the U.S. economy. The funds reinvested in the United States in 2004 were spent on a host of things including capital investment, job creation, share repurchases, dividend increases and merger and acquisitions. The funds also generated some $17 billion in additional tax revenue to federal coffers—and this figure doesn’t include the increased income, payroll and corporate tax collections from higher levels of economic activity.
With an anemic economy, an unemployment rate close to 10 percent and a historic federal deficit, an infusion of some $1 trillion in cash from overseas is a move supported by the National Association of Manufacturers. We agree with Frank Aquila that “[G]iven the weak economy and the debate over the need for additional stimulus and further quantitative easing by the Federal Reserve, bringing home hundreds of billions, possibly trillions, of dollars should be a priority.”
Dorothy Coleman is vice president of tax and domestic economic policy at the National Association of Manufacturers (NAM).