After all, a nations trade deficit needs to be offset by capital inflows into it otherwise its currency naturally depreciates. Capital inflows would increase in the US’s case, if the tax rate on dividends were dropped.

That would be because American shares would then offer higher rates of return after tax for foreign investors, compared to say German shares. Arbitage, or the invisible hand would then need to correct the balance.

The Germans in turn could then experience capital outflows as a direct result of their high tax rates.