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Investors eyeing sectors that could benefit from return of untaxed foreign earnings, finance scholar says

Monday, February 06, 2017

LAWRENCE — As a major tenet of its economic policy, the Trump administration campaigned on returning more jobs and business inside American borders.

Some investors and media reports have speculated on a policy change that might return a portion of untaxed foreign earnings from U.S.-based companies and possibly account for some initiative in federal spending, such as paying for much-needed infrastructure improvement.

A University of Kansas researcher who studies investment theory and corporate relations is available to discuss how this potential windfall would affect U.S. businesses and the economy.

Felix Meschke, associate professor of finance in the School of Business, has written numerous peer-reviewed journal articles on investment theory and application as well as corporate governance issues.

"The theory is that a potential untaxed foreign earnings holiday would allow these major companies to return some of their earnings at a lower corporate tax rate than normal, and in turn, it would return some cash to shareholders and give the government a one-time revenue stream to fund something like infrastructure projects," Meschke said. "Perhaps investors right now are trying to determine which sectors would be most likely to take advantage of this."

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