U.S. multinational corporations had up to recently accumulated as much as $2.6 trillion of overseas profits. To avoid recently higher U.S. corporate tax rates, U.S.-based companies operating internationally have kept their foreign earnings in subsidiaries overseas rather than bringing them back to the United States.

One of the main purposes behind Congressional Republicans attempt to overhaul the U.S. tax code was to repatriate these earnings and invest them in the U.S.

As the following National Bank Hot Chart illustrates, there was a record repatriation of U.S. corporate earnings in the first quarter of this year, and the share buybacks by the 15 top corporations also soared in the first quarter.

Of course, this kind of a reaction has happened before in the U.S. In 2004 Congress offered a tax holiday to U.S. corporations on their repatriated profits, hoping that would spur investment and create jobs. Instead, an NBER study concluded that the repatriated cash was distributed almost entirely to shareholders. The repatriated cash had no significant impact on the economy.

The 2018 iteration of the tax holiday is having similar results. As the National Bank Hot Chart reports (September 11, 2018) “According to latest data from the Federal Reserve, a record US $313 bn (or about 30% of the US$1 trillion or so held by American multinational enterprises abroad) was repatriated in the first quarter of 2018. The repatriation coincided with a sharp increase in share buybacks from US$23 bn in 2017Q4 to US$55 bn in 2018Q1. So much so that, as today’s Hot Charts show, the ratio of corporate buybacks to assets is now at a multi-year high.”

America’s international companies are not wasting anytime in taking advantage of the tax reform plan. Over $300 billion was repatriated to the U.S. in the first quarter. The Bureau of Economic Analysis (BEA) noted that this more than $300 billion repatriated in the first quarter was the highest on record. The BEA also concluded that the main driver of the repatriation surge is that companies are no longer taxed on foreign earnings when returning the funds to the U.S. For comparison purposes, only $38 billion was repatriated during the same period a year earlier.