U.S. stock investors are buzzing over the prospects of a new administration slashing the corporate tax rate from 35% to 15%. They may also provide a tax repatriation holiday at an even lower rate. The thinking goes that such a tax cut will send a tidal wave of corporate profits flooding back into the domestic market that will stimulate capital spending and send stock prices soaring on their next leg to the upside. Perhaps this optimistic scenario will come to pass. But if history is any guide, the actual impact from any future profit repatriation on the U.S. stock market and the economy may fall short of expectations.
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