Recently, as I was reaching out to one of the many retired tax luminaries in Silicon Valley with an important question for him. I asked, “What advice would you give the rising new generation of tax executives and CFOs? His response is valuable; I hope you will pass this on to everyone you know in the tax and financial profession.
As the CEO of www.taxconnections.com, I believe it is an indicator of what is to come in the future of the United States business.
Prior to reading this letter, for the record, many corporate tax executives call me by by nickname Kitty. Here is the letter received today that is an eye opener from a seasoned and now retired tax executive.
It was very nice to speak with you this afternoon. A surprise to hear your “million dollar voice”.
Attached is the WSJ article “Companies Bring Profits Back To U.S.” from 6/21/2020 explaining that the $124 Billion in cash was brought back into the U.S. in Q1 and that $851 Billion in cash was repatriated in 2018. The article got its information from the Commerce Department and that information is probably underestimated by many times.
I have explained to friends and consumers in the U.S. who were buying iPhones, tools, electronics, clothes, fast food hamburgers, books, etc. from foreign affiliated sellers of those U.S. companies that revenue from those sales, and manufacturing and jobs went outside the U.S. But, with Trump’s lower tax for U.S. businesses, that trend is reversing. Now, U.S. companies want to generate U.S. revenue subject to the lower U.S. taxes, not foreign revenue. Additionally, there are now penalty taxes for continuing to generate revenue outside the U.S. In order to achieve these benefits, tax planning has changed from when I did it. These changes help the U.S. economy and return jobs to the U.S. and bring manufacturing back to the U.S. But more than ever, CFOs need tax people to plan, execute and achieve these benefits. See reshorenow.org for a list of thousands of U.S. companies reshoring, a lot of household names.