The failure of repealing and reforming Obamacare has left the Trump administration without any legislative victory. Both the Trump administration and the Republican controlled government are eager to pass a tax reform before the end of the year. The key points of the tax reforms will have the following effects:

One-time Low Repatriation Tax Rate for Corporate Profits Held Overseas

Big cash rich MNC such as Google and Apple are holding most of their cash outside of USA due to the high tax expenses they will need to pay if the money is repatriated back. This one time “Tax Holiday” will allow MNC to move the cash back to US at a very favorable tax rate, allowing more investments and jobs to be generated with the profits made outside of US.

Implication: It will temporarily spur jobs and investments in US leading to inflationary pressures. Inflow of money back to US will also boost USD. The overall impact will a …