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- Nov 26, 2011
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More from the CBO report:
In CBO’s projections, the private domestic saving rate initially rises in response to the higher after-tax rates of return on U.S. investment resulting from the tax act. In addition, because the act boosts U.S. economic output, national income rises, and total private domestic saving grows. (However, some portion of the increased private domestic saving is used to finance increased federal borrowing, reducing the amount of saving available for private investment.) Earnings subject to deemed repatriation are expected to be used primarily to reduce corporate debt and thus to contribute only slightly to financing the increase in private investment (see Box B-1 on page 109). Meanwhile, increases in the rate of return on investment in the United States in relation to the rate in other countries will attract additional inflows of foreign saving. CBO estimates, therefore, that a substantial portion of the increase in private investment will be financed through those inflows.
The CBO does not give an 80 percent figure here, but they clearly state a "substantial portion" of the tax cut benefits will be reaped by foreign investors.
They again state foreign investors will reap the most benefit here:
The act is expected to increase GNP less than it increases GDP because it shrinks U.S. net international income (see Table B-2 on page 115).
There are two reasons for that decline in net income flows to the United States. First, the increase in foreign investment in the United States that is associated with greater private investment and increased government borrowing generates a fall in net international lending, which is national saving minus domestic investment.29 In CBO’s projections, the act decreases net international lending over the next 11 years by an average of 0.4 percent of GDP (see Figure B-5). The additional income generated by the foreign investment in the United States accrues to foreign investors.
In CBO’s projections, the private domestic saving rate initially rises in response to the higher after-tax rates of return on U.S. investment resulting from the tax act. In addition, because the act boosts U.S. economic output, national income rises, and total private domestic saving grows. (However, some portion of the increased private domestic saving is used to finance increased federal borrowing, reducing the amount of saving available for private investment.) Earnings subject to deemed repatriation are expected to be used primarily to reduce corporate debt and thus to contribute only slightly to financing the increase in private investment (see Box B-1 on page 109). Meanwhile, increases in the rate of return on investment in the United States in relation to the rate in other countries will attract additional inflows of foreign saving. CBO estimates, therefore, that a substantial portion of the increase in private investment will be financed through those inflows.
The CBO does not give an 80 percent figure here, but they clearly state a "substantial portion" of the tax cut benefits will be reaped by foreign investors.
They again state foreign investors will reap the most benefit here:
The act is expected to increase GNP less than it increases GDP because it shrinks U.S. net international income (see Table B-2 on page 115).
There are two reasons for that decline in net income flows to the United States. First, the increase in foreign investment in the United States that is associated with greater private investment and increased government borrowing generates a fall in net international lending, which is national saving minus domestic investment.29 In CBO’s projections, the act decreases net international lending over the next 11 years by an average of 0.4 percent of GDP (see Figure B-5). The additional income generated by the foreign investment in the United States accrues to foreign investors.
