After taking the oath office on January 20, President Donald Trump may have a rare opportunity to bring billions of dollars back to the U.S. He would do so by closing tax loopholes that allow companies such as General Electric Corp. (GE), Apple Corp. (AAPL), Exxon Mobil Corp. (XOM) and many others that are currently keeping at least $2 trillion in profits abroad to avoid taxes at home.

$2 Trillion in Profits

While the presidential election was divisive, and many real policy issues were ignored or marginalized, there is a growing political consensus among Republicans and Democrats that the time has come for changes in the tax code in order to encourage repatriation of the vast troves of both individual and corporate earnings held outside our country.  Companies under current rules can say that foreign profits are permanently or indefinitely reinvested abroad, thus deferring taxation. The amount is estimated at anywhere between $2.4 trillion to $3 trillion." See also: (Can the Next President Kill Carried Interest?)

Trump's Challenge

During the election campaign, both Trump and his Democratic rival, Hillary Clinton, vowed to close tax loopholes and make the tax code more fair and straightforward. Closing loopholes on profits stored abroad is another fix. Of course, a newly elected Trump will face opposition from the corporate lobby and certain investor groups who see this potential move as a negative pressure on profits. It is also not always easy to accurately discern and attribute what foreign assets belong to whom and how much taxes would be owed on it. Still, assuming an average corporate tax rate of 35%, being able to tax $2 trillion in profits stored abroad would bring the U.S. government $700 billion in new revenue.

Jobs Engine

This money could be used to bolster the U.S. economy and its citizens by creating jobs at home, fixing crumbling infrastructure, and going toward education and skill training - and that's with the $2 trillion figure being on the low end of the range of the amount of money out there. (See also: Overseas Cash Hoards: Shareholder Boon or Taxpayer Burden?)

Republican Healing

With a Republican in the White House as well as Republican majorities in the Senate and House, it would be theoretically easier to reach a political consensus to close tax loopholes that are deemed unfair. Achieving this may depend heavily on Trump's ability to heal political wounds and work with establishment Republicans he feuded with during the election. 

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.