The Republican tax plan unveiled Wednesday seeks to spark economic growth through lower rates but could punish one key market area: U.S. government bonds.
A key provision of the reform plan calls for the repatriation of cash that multinational companies are holding overseas. While details remain thin, foreign holdings will get softer tax treatment when they are brought home. Companies have about $2.5 trillion stashed abroad.
Treasurys fit into the equation because much of that overseas money is held in cash, cash equivalents or short-term investments — a category that includes government debt.
So, when companies start pulling that money back to the U.S., that presumably would mean selling of Treasurys, a move that would push up yields. Buyers will be needed for those bonds as government debt and deficits increase, which also could see a demand for higher rates.
https://www.cnbc.com/2017/09/27/bonds-could-be-the-big-loser-under-the-gop-tax-plan.html
This new tax plan will affect many different people/industries in good and bad ways. The main benefit is keeping more money in the average americans pockets, this could allow for the purchase of bonds or more investment. It is easy to dissect the plan now, but we will not know the results until it happens. Bringing companies holdings back to the US and taxing them here will obviously increase tax revenue and may force companies to do more business here, and again stimulate the economy in that way. Maybe an increase in minimum wage could follow and we will see how all these changes will affect the US
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