Whatever you think about the GOP tax reform plan, it’s increasingly likely to pass and would undoubtedly be positive for one constituency…

U.S. shareholders.

This tax reform package will likely include some form of repatriation of foreign earnings—a potential windfall for Tech (XLK) and Healthcare (XLV) shareholders in particular. We recommend investors set their politics aside and study the facts.

“You can get all freaked out and start talking about the communist manifesto, and put people in classes, or just forget all that political gobbledygook and realize the upshot to repatriation is absolutely positive for people who own stocks,” says CEO Keith McCullough in the video excerpt above from a recent edition of The Macro Show.

Let’s run through the numbers.

  • There is currently an estimated $2.4 trillion in earnings held by U.S. multinationals overseas.
  • The top 30 companies with the largest amount of foreign earned profits account for 46% of that $2.4 trillion.
  • Of this top 30, Technology and Healthcare sectors lead the pack with $579 billion and $425 billion respectively.

There’s a precedent for how much of this money might get returned to shareholders. A 2009 study showed that a 2005 one-time tax holiday resulted in between $0.60 and $0.92 of every dollar was returned to shareholders. Take that number with a heavy dose of skepticism.

“I think it’s disingenuous for any strategist to tell you the exact number of repatriation dollars,” McCullough says. “Just go through the scenario analysis and understand that this is good for shareholders in Tech and Healthcare particularly.”

Watch the video above for more.

A $2.4 Trillion Investor Windfall Inside GOP Tax Package - the macro show