death and taxes and more taxes
The Republican tax overhaul will leave Goldman Sachs an estimated $5 billion shorter in profits in its final quarter of this year, CNN Money reports. While that is partially due to changes to tax credits, which will be worth significantly less next year under the new rules, most of the hit comes from the "repatriation tax," which involves money returned to America from overseas.
"U.S. companies had found ways to legally park money overseas to avoid the higher U.S. corporate tax," The Associated Press explains. "It has been expected that changes in the law would prompt some of those companies to return money to the U.S., potentially $2.5 trillion or more," although "historically, repatriated profits have not had a broad effect on the U.S. economy."
Amgen, a biopharmaceutical company, expects tax expenses as high as $6.5 billion due primarily to the repatriation tax, Reuters reports. Separately, European banks expect one-off losses between $1 billion and $3 billion each.