By Jeff Cox, CNBC.com Senior Writer
NEW YORK ( CNBC) -- Allowing U.S. companies to bring back overseas profits without taking a big tax hit would benefit shareholders but might not do much for the economy or jobs. The debate over tax repatriation has focused thus far on the hoped-for economic benefits. But according to one analysis, the impact actually could be greater on the stock market and result in a huge boost to the Standard & Poor's 500 dividend.
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The benefits would be widespread, with materials, energy, health care and consumer staples also poised to surge. Utilities, telecom and financials "given their low levels of overseas cash," would see "little effect" from repatriation, the note said. Overall, the move could take the S&P 500's current yield from 2.2% to 6%, a figure based on the notion that $400 billion would be deployed to dividends. Should that happen, it at least would get more money circulating, though real economic conditions such as employment and housing may not improve much. "A boost to stock prices from simply returning cash could translate to greater equity market returns (both capital appreciation and total return) as well as even a muted wealth effect," Subramanian wrote. -- Written by Jeff Cox, CNBC.com Senior Writer