Tax break on repatriated foreign earnings may spur R&D

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A new academic study suggests that the provisions in the Tax Cuts and Jobs Act encouraging companies to repatriate their foreign earnings back to the U.S. at a reduced tax rate could lead to more spending on research and development.

The study looked at an earlier corporate tax holiday in 2004 from the American Jobs Creation Act, which led to a wave of stock buybacks and corporate dividends rather than the number of jobs originally envisioned. However, the study found that the law did produce more spending on research and development. The study…

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