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Foreign Earnings Repatriation Proposal
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Foreign Earnings Repatriation Proposal
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Records of the Council of Economic Advisers (George W. Bush Administration)
Phillip Swagel's Files
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Tuesday, April 05, 2016
FOIA Marker
This is not a textual record. This FOIA Marker indicates that material has been removed
during FOIA processing by George W. Bush Presidential Library staff.
Council of Economic Advisers
Swagel, Phillip - Subject Files
Location or
NARA Number:
FRC ID:
OA Number:
Stack: Row: Sect. Shelf: Pos.:
Hollinger ID:
W
30
16
1
2
5861
18796
4372
4539
Folder Title
Foreign Earnings Repatriation Proposal
5/19/03
INVEST IN THE USA PROPOSAL (S. 596)
INCLUDED IN THE SENATE TAX RELIEF RECONCILIATION BILL (S. 1056)
Current Law
Under international tax principles, primary jurisdiction to tax income is the country
where the business operates rather than the country where the business is based. Many
countries (but not the U.S.) exclude foreign dividends from domestic taxation, which
encourages the reinvestment of surplus foreign earnings back home into these countries.
In the U.S., by contrast, companies are required to pay tax on foreign subsidiary earnings
when the earnings are brought back to the U.S., to the extent of any shortfall in the
income tax paid abroad and the 35-percent U.S. tax rate. As a result, foreign earnings of
U.S.-based companies have accumulated abroad because, if they are reinvested in U.S.
operations, the U.S. will collect up to a 35% tax.
This aspect of U.S. tax law is a significant incentive to leave foreign earnings offshore.
As a result, less desirable foreign investments are frequently more profitable for U.S.
companies despite better investment opportunities in the United States.
Pool of Accumulated foreign earnings abroad
Based on an examination of the financial statements of the S&P 500, JP Morgan
estimates that the pool of foreign earnings that has accumulated over the years and is
eligible to be brought to the United States is about $500 billion, an estimate that is
consistent with an examination of IRS tax data. Much of this accumulated foreign
investment is designated for financial reporting purposes as permanently invested
overseas and thus there is no expectation of any U.S. tax being paid in the future.
Invest in the U.S.A. proposal included in S. 1056
The Senate-passed Jobs and Economic Growth tax bill includes a provision originally
introduced as S. 596 by Senators Ensign, Boxer, Smith, Bayh, Allen and Enzi. It was
adopted by voice vote after a 75-25 vote adopting a procedural motion on the floor by
Senator Ensign to consider it. All the Republicans and half the Democrats voted in favor.
Similar bipartisan proposals have been introduced in the House.
Proposed Change
For a one-year period, the 35% tax rate on transfers to the U.S. of foreign corporate
earnings would be replaced with a 5.25% toll charge on transfers in excess of the
company's historical average. No foreign tax credit would be allowed for 85% of the
foreign taxes associated with dividends and other transfers qualifying for the 5.25% toll
charge. The 5.25% toll charge could not be reduced by net operating losses.
1
5/19/03
To encourage immediate economic stimulus, the reduced rate of tax would be effective
for the first taxable year ending 120 days or more after the date of enactment. Thus, for
example, if the bill is enacted on May 25, 2003 and the electing taxpayer is on a calendar
year, the bill will apply to the taxpayer's taxable year ending December 31, 2003. The
effective date is structured so as not to encourage taxpayers to suppress current dividends
before it becomes effective.
Estimated additional U.S. investment from accumulated foreign earnings
The Joint Committee on Taxation estimates that the change would bring into the United
States an additional $140 billion of accumulated foreign earnings.
JP Morgan performed an independent study of S&P 500 financial data for its investors
and estimated the amount to be about $300 billion. JP Morgan advises that the proposal
will result in a 2-3% cumulative increase in domestic investment during 2003-04, a one
percentage point cumulative increase in GDP growth over 2003-04 and a 3% reduction in
nonfinancial corporate debt that strengthens corporate balance sheets and lowers
corporate bond rates.
A PwC survey of just 14 companies showed that the additional U.S. reinvestment would
increase domestic investment in plant, equipment, R&D, and pension plans depleted by
decline in the stock market; reduce domestic debt loads; increase dividends that could be
productively redeployed; and raise equity market valuations by increasing funds available
for share repurchases.
Uses of Additional Dollars Brought to the U.S. as a Result of S. 596
PricewaterhouseCoopers Survey of 14 Companies (4/11/03)
Percent of foreign subsidiaries' accumulated untaxed earnings at end of
54%
2002 that would be distributed to the U.S. as a result of S. 596
Additional distributions to U.S. in the survey (note that this is just
the amount in excess of the base amount of normal distributions)
$47,045,799,109
Use of additional distributions shown above -
1. Additional investment in U.S. plant, equipment, inventory, land or
working capital
32%
2. Additional U.S. debt reduction 1
32%
3. Additional repurchase of company stock
12%
4. Additional portfolio investment in the U.S.
9%
5. Additional/accelerated contributions to U.S. pension plans
4%
6. Additional dividends to shareholders
1%
7. Additional compensation to corporate officers
0%
8. Additional compensation to other than corporate officers
0%
9. Other investments in the U.S. (identified by respondents as
additional expenditures on R&D, business start-ups, and business
& technology acquisitions)
10%
Total
100%
1
The additional debt reduction is reported by some as a first step prior to a determination as to how best to use resources
that were previously invested abroad. For others, the U.S. debt reduction is the intended improvement in the U.S.
operations (to stabilize or improve debt ratings).
2
5/19/03
Revenue estimate.
The Joint Committee on Taxation estimates that S. 596 will increase tax receipts by about
$3.8 billion in the first year, and reduce net revenue by $3.8 over the 10-year budget
period.
PricewaterhouseCoopers. JP Morgan and a statement by House Ways and Means
Committee Chairman Thomas at a hearing disagree with the JCT estimate. PwC and JP
Morgan both estimate that the proposal increases federal receipts over the 10-year period.
3
JPMorgan
Economic & Policy Research
JPMorgan Securities Inc.
May 1, 2003
Special report
Introducing the Homeland Investment Act
A tax change is proposed that temporarily reduces obstacles to repatri-
ating accumulated foreign earnings of US corporations
Legislation to produce results; repatriation estimated at $300 billion
Survey suggests that firms would use funds for varied purposes; shor-
ing up corporate finances is the top priority
Estimated increase in business spending to lift GDP growth 0.5%
Budget impact is negligible
Introduction
Amid the current flurry of activity on US tax policy, it is easy to neglect the
Homeland Investment Act. This tax proposal, which has bipartisan support,
would remove many of the tax obstacles that inhibit repatriation of foreign earn-
ings by US corporations. The intention of this legislation is to make it less costly
to repatriate earnings that might be used for investment spending and hiring in the
United States.
However, there is little analysis available that bears on the likely impact of this
legislation. To fill this gap, this special report draws on existing company infor-
mation and provides new survey material to give rough guidance as to the poten-
tial effects of the Homeland Investment Act. The analysis suggests that there is a
large pool of reinvested foreign earnings that would be repatriated if this legisla-
tion were passed. JPMorgan estimates that the gross flow that would result from
the passage of the pending legislation is roughly $300 billion. This number is
more than twice the estimate of the Joint Committee on Taxation made in 2001.
A survey of firms suggests that this money would be put to varied use. Shoring up
Anne Swope
balance sheets would be a central priority. JPMorgan estimates suggest that the
(1-212) 834-7566
legislation would lead to a roughly 3% reduction in nonfinancial corporate debt.
[email protected]
An important part of the funds would be used to increase business activity. Esti-
JPMorgan Chase Bank
mates suggest a 2-3% increase in capital spending over two years, during which
Bruce Kasman
the GDP level would likely be boosted by roughly one-half of a percentage point.
(1-212) 834-5515
The impact of the legislation on the Federal Budget is likely to be negligible.
[email protected]
JPMorgan Chase Bank
Introducing the Homeland Investment Act
Robert Mellman
(1-212) 834-5517
Legislation was recently introduced in both the House (H.R.767) and Senate
[email protected]
(S.596) to temporarily change the tax treatment of US subsidiaries foreign earn-
JPMorgan Chase Bank
www.morganmarkets.com
May 1, 2003
Economic & Policy Research
JPMorgan
Introducing the Homeland Investment Act
JPMorgan Chase Bank, New York
Page 2
Anne Swope (1-212) 834-7566
[email protected]
ings. These bills, the Homeland Investment Act of 2003 and
A stylized example of tax lawproposal
Invest in the USA Act of 2003, would temporarily reduce
In this example Acme International earns $100 abroad and pays
the US tax rate on foreign subsidiary earnings that are dis-
$10 in foreign taxes. No. US taxes are paid because the earnings
tributed to the United States parent company. Although the
are not repatriated.
legislation has been proposed separately from the Bush
administration's "jobs and growth" stimulus package, it is
Under current law, if the profits were repatriated the firm would
now being discussed as a possible element of this plan.
also owe $35 in US taxes and $4.50 in additional foreign taxes
for distributed earnings less a $14.50 tax credit to offset the
The current form of the proposed legislation reduces the tax
foreign corporate income tax and witholding-tax-paid Thertotal
rate to 5.25% on distributions in excess of a corporation's
additional tax cost of-repatriating the $90 $25
"normal" annual distribution, and would be effective for
distributions made in either 2003 or 2004, depending on
Under the proposed law, the US corporate tax would belowered
when the legislation becomes law.
by 85% from $35 to $5.25; the foreign tax would also be
reduced by 85% to $2.18, and Acme would still have to pay the
The Senate Bill differs from the House version in requiring
$4.50 foreign witholding tax on distributions The tax cost to the
US corporations to provide a domestic reinvestment plan.
firm of repatriating the $90 in earnings to the United States is
This plan requires firms to describe how repatriated income
lowered by more than two-thirds, from $25 to $7.57
will be reinvested in the United States. The Senate bill an-
ticipates that an electing corporation's reinvestment plan
Example
would provide for use of the distributed cash as a source for
Foreign Taxable Income
$100
funding worker hiring and training, infrastructure, research
10% Foreign Corporate Tax
$10
and development, capital investments and/or providing fi-
Foreign Net Earnings
$90
nancial stability (of the corporation) for purposes of job
retention or creation.
Tax cost of repatriating-foreign earnings
If the Homeland Investment Act becomes law on or before
Under Current Law
September 2, 2003, the temporary reduced tax rate will only
US Corporate Tax at 35%
$35.
apply to qualifying distributions made on or prior to De-
Foreign Tax Credit
$14.50
cember 31, 2003 for all calendar year taxpayers. This im-
Foreign Withholding Tax
$4.50
plies that any resulting capital flows would occur in a very
Additional Tax Burden
$25.00
short period of time. If the Act becomes law after Septem-
ber 2, 2003, the reduced tax rate would apply to distribu-
Under Proposed Law
tions made during 2004 for calendar year taxpayers.
US Corporate Tax at 5 25%
$5.25
Foreign Tax Credit
-$2.18
Motivation for changing the law
Foreign Withholding Tax
$4.50
Unlike most other industrial countries, current US tax law
Additional Tax Burden
$7.57
provides multinational firms with strong incentives to keep
earnings from foreign operations outside the United States,
even when efficiency considerations would argue that the
funds be used within the United States.
US corporations: profits earned abroad
billions of dollars
percent
Under international tax principles, primary jurisdiction to
210
28
Profits earned abroad
tax income is given to the country where the foreign subsid-
180
iaries operate. The accumulated earnings of a US
24
150
corporation's foreign subsidiaries are generally not subject
to US corporate income taxation until the earnings are actu-
120
20
ally distributed to the corporate parent as a dividend. As a
90
general principle, US tax on repatriated income is imposed
16
60
Share of total profits
to bring the total corporate tax rate to 35%. In countries in
V
30
12
which tax rates are below 35%, an additional US tax gener-
85
87
89
91
93
95
97
'99
01
May 1, 2003
Economic & Policy Research
PMorgan
Introducing the Homeland Investment Act
JPMorgan Chase Bank, New York
Page 3
Bruce Kasman (1-212) 834-5515
[email protected]
ally is paid when earnings are repatriated. Thus, foreign
Foreign undistributed earnnings by credit rating
investments financed with foreign earnings of US multina-
share of
tionals typically have been more attractive than returns on
undistributed earnings
domestic investments financed with foreign earnings (after
AAA
22.9
additional taxes are paid to repatriate the earnings). To be
AA
9.9
sure, US tax rules are far more complex than this short de-
AA-
11.5
scription suggests. Often they operate to create disincen-
A+
13.6
tives to repatriate foreign earnings even when tax rates
abroad are high.
A
10.3
A-
9.4
In lowering the tax rate to 5.25%, the cost of repatriating
BBB+
3.3
earnings is significantly reduced. Firms can repatriate funds
BBB
10.3
at a lower tax rate and may receive a partial tax credit for
Lower
8.8
taxes paid abroad. A stylized example presented in the ac-
companying box (previous page) makes this point clear. In
Foreign undistributed earnings by sector
the example, costs of repatriating earnings are cut by more
share of
than two-thirds.
undistributed earnings
Manufacturing
39.7
Many firms have large pools of accumulated earnings from
High tech and telecom
17.7
foreign operations but lack promising investment opportu-
nities for use of the funds abroad. In particular, tax laws
Pharmaceuticals and health care
27.0
make it difficult to structure direct investments from one
Consumer
12.2
subsidiary to another. And while the US parent can gener-
Energy
9.6
ally borrow as an alternative to repatriating funds, the cur-
Finance and insurance
6.5
rent environment is one in which firms have strong incen-
Other
5.0
tives to deleverage. Risk considerations should also pro-
Note: Both tables based on the sample of 237 S&P 500 corporations that report reinvested
mote repatriation. Absent a US tax bite, the risk of political
foreign earnings.
change or shifting foreign tax regimes create disincentives
The Joint Committee on Taxation analyzed a proposal simi-
for holding assets in many parts of the world.
lar to the current one in 2001. It estimated that repatriated
earnings would rise by $135 billion in the first year after
The primary motivation of the change in the law is to allow
legislation is effective. The estimated revenue impact was
firms to repatriate these foreign earnings to promote long-
modest. A small positive $4.1 billion gain in the first year
term growth. The hope is that some of these funds would be
was estimated to be temporary. Over ten years the legisla-
used in ways that boost US investment and hiring. That a
tion was estimated to reduce revenues by a net $3.9 billion.
reduction in the tax rate on repatriating earnings might have
The Joint Committee has provided little detail in how it ar-
little if any net cost to the US Treasury is also appealing.
rived at these estimates.
There would be a net loss in revenues from firms that
planned to repatriate earnings in the future and would now
JPMorgan's assessment of the Homeland Investment Act
bring these funds home at a lower tax rate. However, firms
begins with an estimate of the size of the accumulated for-
that keep virtually all their foreign earnings abroad to avoid
additional taxes under current law would have incentive to
eign subsidiary earnings that would be available for repa-
triation to the United States. In the audited financial state-
repatriate earnings currently under the proposal.
ments of many S&P 500 corporations, the cumulative
amounts of foreign subsidiary earnings that are permanently
Foreign subsidiary earnings: A large pool exists
or indefinitely reinvested outside the US hereafter, rein-
Although the motivation of the legislation is clear, there is
vested foreign earnings) are disclosed.
little information available to assess the likely size of in-
flows that will be generated under the new law and its mac-
These figures generally appear in the tax footnote to audited
roeconomic effects.
financial statements. They are available because, under
May 1, 2003
Economic & Policy Research
JPMorgan
Introducing the Homeland Investment Act
JPMorgan Chase Bank, New York
Page 4
Anne Swope (1-212) 834-7566
[email protected]
GAAP, all corporations that consider all or some of their
$500 billion in estimated retained foreign earnings
foreign subsidiary earnings as permanently or indefinitely
reinvested outside the US-and therefore do not accrue a
Financial statements show $406 billion in accumulated foreign
deferred tax liability-are required to disclose the amount
subsidiary earnings for the S&P 500. This figures likely underes-
in theiraudited financial statem entsF inancial statements
timates the size of the total pool of foreign earnings that could
indicate that the reinvested foreign earnings of the S&P 500
potentially be repatriated
corporations that could potentially be repatriated following
passage of the Homeland Investment Act is $406 billion.
The S&P 500 is a subset of the entire corporate sector S&P
500 operating earnings has recently averaged about 60% of
Most of these earnings are held by companies with high
overall after tax earnings. Its share of foreign earnings is likely
credit ratings (see tables, page 3). Based on S&P ratings,
larger, although no official breakdown is available.
more than three fourths of the earnings are held by compa-
nies that are rated A or higher. Sectorally, manufacturing
The aggregate reinvested foreign earnings of corporations in
and pharmaceutical companies account for the largest con-
the S&P 500 includes reinvested foreign earnings of only 237
centration of accumulated foreign earnings, more than one-
corporations. The remaining 263 corporations did not overtly
half of earnings held abroad.
disclose reinvested foreign earnings In some cases, the tax
effects but not the total amount of foreign subsidiary earnings
There are good reasons to think that this $406 billion figure
are disclosed. For our calculation, these companies are treated
underestimates the total pool of earnings that would be eli-
as if they have no reinvested foreign earnings
gible for repatriation (see box, page 4). Indeed, this view is
confirmed by an alternative estimate based on IRS data for
There are foreign subsidiary earnings that have not been repa-
a larger sample of firms. Taken together, the total pool of
triated but also not been treated as permanently reinvested.
reinvested foreign earnings eligible for repatriation is esti-
These earnings could also be repatriated if the bill becomes law.
mated at about $500 billion.
An alternative exercise employs IRS data for the 7500 largest
Survey points to large-scale repatriation
controlled foreign corporations for 1998 and points to accumu-
lated foreign subsidiary earnings in 2002 of close to $500 billion.
The existence of a large pool of reinvested foreign earnings
This level appears consistent with a scaled up estimate from the
provides little insight as to the likely size of repatriated
smaller S&P sample:
funds under the tax plan. In order to estimate the likely ef-
fect of the legislation, an informal survey of large firms was
Survey results, repatriation of reinvested foreign earnings
conducted. The survey sampled tax and treasury depart-
percent of reinvested foreign earnings
ments of 28 firms. Their reinvested foreign earnings repre-
sent about one-quarter of the aggregate $406 billion mea-
60
sured in the S&P 500 sample. The results of the survey
50
highlight the following:
40
A strong incentive to repatriate. Respondents representing
30
slightly over half of the sample-both as a share of the
20
number of respondents and as a share of reinvested foreign
10
earnings-indicate that substantially all of their earnings
0
would be repatriated. Most other companies indicated that
Substantially all
Some
None
some of their earnings would be repatriated. Only two re-
spondents, accounting for about 8.7% of reinvested foreign
Estimate of repatriated earnings
earnings of the sample, did not plan to repatriate foreign
billions of dollars
earnings to the United States.
From Firms
From Firms
Repatriating
Repatriating
Dollars
Cash flow and repatriation. Adequate liquidity appears to
Substantially All
Some
Repatriated
Share of sample
50.3%
41.2%
be an important consideration for firm's willingness to repa-
triate. Firms with large cash balances globally appear more
Percent repatriated:
committed to repatriating all their reinvested foreign earn-
Higher estimate
100%
60%
$375
Lower estimate
80%
30%
$265
1. Corporations may change their reinvestment strategies, however, at which time
Note: Estimates are based on a JPMorgan survey of 28 firms accounting for roughly 25% of
deferred taxes may be required to be accrued.
all accumulated earnings by the S&P 500 sample of very large firms.
May 1, 2003
Economic & Policy Research
JPMorgan
Introducing the Homeland Investment Act
JPMorgan Chase Bank, New York
Page 5
Bruce Kasman (1-212) 834-5515
[email protected]
ings. Corporations that do not have sufficient cash would
S&P sample and survey group
have to borrow the cash at the foreign subsidiary level, liq-
$ billion
uidate operating assets, or distribute property, all of which
Global
Lesser of Reinvested
have collateral consequences and make the decision signifi-
Group
Reinvested Foreign
Cash & Cash
Foreign Earnings or
cantly more complex. Liquidity is also significant as there
Earnings
Equivalents
Global Cash and Equiv.
would be cash taxes due on the distributed earnings. In ad-
dition to US taxes, most countries impose a withholding tax
when earnings are distributed.
S&P 500 sample
407
374
193
Survey Group
102
76
59
The results of the survey point to a substantial flow of repa-
Note: The S&P sample represents the 237 corporations in the S&P 500 that
triated foreign earnings (see table, page 4). The estimates
disclose reinvested foreign earnings. The survey group represents the
28 corporations sampled by JPMorgan. The amount of global cash and
range from $265- $375 billion.
cash equivalents for each company is the amount reflected on each
company's audited financial statements. The aggregation of corpora-
The possibility that the survey sample is biased towards
tions using the lesser of their reported reinvested foreign earnings or
global cash is reported in the last column.
companies with high levels of liquidity-and therefore a
greater proclivity to repatriate earnings-was also examined
(see top table, page 5). In the aggregate, companies in the
survey sample do not appear to have a larger cash position
relative to those in the broader S&P 500 sample. This find-
Survey results: uses of repatriated funds
ing holds when the data are aggregated such that repatri-
survey of 28 firms; respondents could mention more than one use
ated flows are no larger than a corporation's available cash
Percent of
position.
Number
respondents
Pay down outstanding debt
13
46
In all, $300 billion looks to be a reasonably conservative
Finance capital spending
11
39
estimate of the magnitude of foreign earnings that could be
Fund R&D, venture capital, or acquisitions
11
39
repatriated under the proposed legislation. This estimate is
Buy back stock
5
18
more than twice as large as that produced by the Joint Com-
Use cash for working capital
3
11
mittee on Taxation.
Might pay dividend (if double taxation ends)
3
11
Fund underfunded pension fund
1
4
A modest boost to growth and deleveraging
The ultimate intent of the Homeland Investment Act is to
provide a boost to US macroeconomic performance. In con-
sidering the possible benefits of repatriating $300 billion in
foreign earnings, once again the survey provides guidance
cash or is used for stock buy-banks and shoring up pension
(bottom table, page 5). Most corporations point to shoring
funds.
up corporate finances-buying back debt, increasing levels
of liquid assets, rebuilding pension funds or even retiring
Under these assumptions, $150 billion of corporate debt
equity-as a key priority for the use of these funds. How-
would be paid down, equivalent to about 3% of total nonfi-
ever, a substantial number of corporations also indicate that
nancial corporate debt. For many firms repatriating funds,
a portion of the funds will be used to finance activity: capi-
the percentage reduction in debt would be much greater.
tal spending, research and development, and the like.
The share allocated to new expenditures amounts to about
There are no hard numbers on how the money would be al-
$50 billion per year in new spending. At this magnitude,
located among these varied purposes. As a rough translation
GDP would likely be boosted by about one half a percent-
of the survey results, assume that 50% of the $300 billion is
age point. The biggest benefits would likely come in spend-
used for debt repayment and 35% is used for spending - on
ing on equipment and software and new plant. The boost to
research and development or capital expenditure - spread
the total national level of capital spending would be 2-3%
out over a two-year period. The remaining 15% remains in
in each of the two years.
May 1, 2003
Economic & Policy Research
JPMorgan
Introducing the Homeland Investment Act
JPMorgan Chase Bank, New York
Page 6
Anne Swope (1-212) 834-7566
[email protected]
Budget impact is expected to be small
tial offset to the $10 billion to $15 billion gain. Most likely,
the past trend of earnings accumulating abroad would con-
The effects of the proposed change in the tax law on the
tinue to prevail, and this partial offset would be minimal.
federal budget are likely to be relatively modest: positive in
the short run and slightly positive in the longer run as well.
Based on the estimate of the repatriated earnings, cash tax
Close to $100 billion shift to dollar assets
payments of roughly $10 billion to $15 billion as a direct
Regarding the currency impact of the tax change, the key
result of the legislation would accrue to the Treasury in the
issue is the extent of the shift from nondollar to dollar assets
first year. This assumes an effective tax rate of 3.5-5%, after
that takes place. Anecdotal evidence gained from talking to
adjusting for foreign tax credits.
US corporations suggest that a large portion of foreign
earnings held abroad are held in US dollars. Although no
To the extent that some of the reinvested foreign earnings
hard information is available, a reasonable estimate places
would have been distributed in the foreseeable future and
the dollar share of reinvested foreign earnings at between
taxed at the statutory rate of 35% absent the proposed legis-
one-half and three-quarters. As a result, the repatriation of
lation, the present value of the foregone taxes on these earn-
$300 billion in foreign earnings is likely to produce a one-
ings (difference between 35% and 5.25%) would be a par-
time currency shift of around $100 billion.
Copyright 2003 J.P. Morgan Chase & Co. All rights reserved. PMorgan is the marketing name for J.P. Morgan Chase & Co., and its subsidiaries and affiliates worldwide. J.P. Morgan Securities Inc. is a member
of NYSE and SIPC. JPMorgan Chase Bank is authorised by the FSA and a member of FDIC. J.P. Morgan Futures Inc. is a member of the NFA. J.P. Morgan Securities Ltd. and J.P. Morgan plc are authorised
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by the MAS and the Financial Services Agency in Japan. J.P. Morgan Australia Limited (ABN 888 is a licensed securities dealer. Additional information is available upon request. Information herein
is believed to be reliable but JPMorgan does not warrant its completeness or accuracy. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative
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