Wilbur Ross: Done right, tax reform could boost economy by 1%
By Mike Murphy
Commerce secretary also says China doesn't need preferential trade status
Commerce Secretary Wilbur Ross said America's economy could get a 1% boost if tax reform is done right.
Speaking Tuesday on CNBC's "Squawk Box," (https://www.cnbc.com/2017/09/26/tax-reform-wilbur-ross-sees-1-percent-gdp-jump.html) Ross said revamping the tax system is now the "single-most important thing" on the legislative agenda, and that if done effectively, it could cause the U.S. GDP to grow by 100 basis points, or 1%, amounting to "$10 trillion more GDP, $3 trillion more revenues to the federal government" over the next decade.
"Those are gigantic numbers even for a country the size of the U.S.," Ross said, "so the tax changes could be transformative events."
Ross also called the repatriation of U.S. companies' foreign cash -- in which cash from foreign sales brought back to the U.S. would be taxed at a lower rate -- "a very important objective."
"We believe that there'll be a vast amount of it brought back if the president's notion of a very reduced rate on the immediate repatriation goes through," he said.
Companies such as Apple Inc. (AAPL) , Microsoft Corp. (MSFT) , and Cisco Systems Inc. (CSCO) and Alphabet Inc. (GOOGL) (GOOGL) combined have hundreds of billions of dollars in cash overseas (http://www.marketwatch.com/story/trumps-tax-holiday-wont-make-much-of-a-difference-without-corporate-tax-reform-2016-12-08). A repatriation holiday won't necessarily benefit the economy though; the most recent one, instituted under President George W. Bush in 2004, resulted in gains mostly for shareholders, increased layoffs and $3.3 billion in lost tax revenues, according to a 2011 report (https://www.wsj.com/articles/SB10001424052970203633104576623771022129888).