The new U.S. federal tax law lowers the corporate tax rate from 35 percent to 21 percent, increases bonus depreciation on new business aircraft purchases from 50 percent to 100 percent from this year through 2023, and introduces 100 percent bonus depreciation for preowned aircraft purchases. It allows for the one-time repatriation of an estimated $3 trillion of corporate profits held outside the U.S. at rates of 15.5 percent for cash and just 8 percent for less liquid assets, with companies able to spread their tax payments over an eight-year period.
A fresh influx of capital into U.S. corporate coffers, exemplified by recent announcements by companies such as Apple, is already replenishing “dry powder” available for corporate purposes. These include investments in plants, property, equipment, people, and business development (such as acquisitions, joint ventures, and initial public offerings), as well as liability reduction and capital restructuring (such as debt payoffs, share buybacks, and increased pension funding) and higher dividends. And did I mention business aircraft?
