This is a great news for USA and for my strategy.
The Senate voted Thursday afternoon to approve a bill authorizing construction of the Keystone XL pipeline over the presidential approval process, capping off weeks of debate over amendments.The bill passed by a vote of 62 to 36, with all Republicans and nine Democrats voting in favor.
While French Senat is breaking relationship with the House of Deputy, bipartisan power is back in USA. Just for your infomation, 67 is the magic number of favorable votes. Any results with this number will outpass any veto from the White House.
But, the most exiting news came from the Boxer-Paul “Invest in Transportation Act”!!!!!
Senator Boxer and Senator Paul will be introducing the Invest in Transportation Act of 2015, a bipartisan transportation funding solution. Using revenue from repatriation, the proposal will extend the Highway Trust Fund, which supports millions of jobs. The bipartisan bill will also boost economic growth and create jobs by providing an incentive for companies to bring back some of the estimated $2 trillion in foreign earnings that are being held overseas.
This bill would allow companies to voluntarily return their foreign earnings to the USA at a taxe rate of 6.5%. The rate is only for repatriation that exceed each company’s average repatriations in recent years, and funds must have been earned in 2015 or earlier. Companies would have up to five years to complete the transfer.
A portion of repatriated funds will be used for increasd hiring, wages and pensions; environments; PPP; etc…
All tax revenues from the repatriation program would be transferred into the Highway Trust Fund.
In my Strat GTO 2015, I mentionned in December :
– The US administration will not support any EU state budget funding through any Google and Amazon taxes…
– Infrastructure needs are huge in USA
– In the coming months, the Congress will work on a complete reshuffle of the US corporate taxation. Repatriation act is a part of this process.
At the end , it’s a very good news for the US economy. Regarding single stocks, the taxe rates could increase for the the repatriation candidates. But this increase should be limited (juste applied on a portion) and the US administration, by lowering the global taxe rate (from 35% to 25% or 20%), should dilute the impact.
I still beleive that the Polical risk is not priced in European markets but the improvment of the US corporate taxation is not too.
