U.S. Corporations Now Hold Over $2 Trillion In Untaxed Profits Overseas: Study

This is how the 1%er's are gaming the tax system and they want Paul Ryan's proposed budget to pass, so they can cut the safety to pieces for the poor and elderly, at the behest of these already overwhelmingly rich corporations, to give them EVEN MORE tax breaks and so they can safely bring this money back here without taxation, like they did once before in the not too distant past.  Yeah, everyone better get out and vote or the Guilded Age of the robber barons will be back in no time, on steroids this time.  It's not looking good for the Dems, despite the truth put right in the public's face.  It does make you wonder...

U.S. Corporations Now Hold Over $2 Trillion In Untaxed Profits Overseas: Study


* U.S. Senate Finance Committee Chairman Wyden calls for reform

* Total of profits stashed abroad up 93 percent 2008-2013

* GE tops list, followed by Microsoft, Pfizer, Merck, Apple (Adds comments from Merck, Microsoft and Apple)

By Kevin Drawbaugh and Patrick Temple-West

WASHINGTON, April 8 (Reuters) - Foreign profits held overseas by U.S. corporations to avoid taxes at home nearly doubled from 2008 to 2013 to top $2.1 trillion, said a private research firm's report, prompting a call for reform by the Senate's top tax law writer.

"The new numbers ... certainly highlight what is one of the key challenges for tax reform. I do think there need to be some reforms in this area," Senate Finance Committee Chairman Ron Wyden told reporters on Tuesday on Capitol Hill.

Under U.S. law, corporations do not have to pay income tax on most of their overseas profits until they are brought into the United States. These earnings can be held offshore for years if they are classified as indefinitely invested abroad.

Research firm Audit Analytics said in a report issued last week that the total of such earnings was up 93 percent from 2008 to 2013, citing federal financial filings for companies listed in the Russell 1000 index of U.S. corporations.

Conglomerate General Electric Co had the biggest pile of earnings stored abroad, at $110 billion, the firm said.

Next were software maker Microsoft Corp, with $76.4 billion; drugmakers Pfizer Inc, with $69 billion, and Merck & Co Inc, with $57.1 billion; and high-tech group Apple Inc, with $54.4 billion, it said.

In response, GE said in a statement: "GE operates in more than 170 countries, and most of these overseas earnings have been reinvested in active business operations like manufacturing facilities and loans to non-U.S. customers."

A Merck spokesman said the company files its tax returns in accordance with all applicable laws and regulations.

A Microsoft spokesman referred questions to 2012 congressional testimony, in which company officials said it abides by foreign and U.S. tax laws.

In testimony in 2013 before Congress, Apple Chief Executive Tim Cook said the company is a large taxpayer and does not use tax gimmicks. Apple declined to comment on the new report.

Pfizer was not immediately available for comment.


BAUCUS AND WYDEN

Congress has quarreled for years over the law that lets multinationals stash profits abroad tax-free. Some favor killing the law, known as offshore corporate income tax deferral, and some back a one-time tax holiday that would let companies bring foreign profits home, or "repatriate" them, at a low tax rate.

Debate over offshore deferral flared again in November when Wyden's predecessor as finance committee chairman, former Democratic Senator Max Baucus, proposed doing both. Baucus resigned weeks later to become U.S. ambassador to China.

Wyden in the past has called for repeal of offshore deferral, along with a repatriation holiday, among other changes to the tax code, which he last month called "a rotten carcass that the special interests feast on."

No decisive action is likely for now, however, with Congress deadlocked over fiscal issues at least until after the November mid-term congressional elections, according to policy analysts.

Next year lawmakers are likely to mount another push to overhaul the tax code, a politically difficult feat that has not been accomplished since 1986, when Republican President Ronald Reagan and a divided Congress managed to get it done.

The top U.S. corporate income tax rate is 35 percent, though few multinationals pay anywhere near that thanks to tax-reducing loopholes written into the code in the past 28 years, including some that have enabled wider use of offshore deferral. (Additional reporting by Lewis Krauskopf and Bill Berkrot in New York, Bill Rigby in Seattle, Edwin Chan in San Francisco; Editing by Howard Goller and Tom Brown)

Some follow up reading on the issue of repatriation and how that does nothing to benefit job creation but certainly is a bonanza to the shareholders who gain the most by this action:

Tax Holiday for Overseas Corporate Profits Would Increase Deficits, Fail to Boost the Economy, and Ultimately Shift More Investment and Jobs Overseas (2011)

We're Giving a Tax Holiday to Huge Companies, and It's a Terrible Idea  (2004)

Tax Holiday Rejected On Overseas Profits (2011)  

The last link is the WSJ presenting the big money excuses for why this would be good...(for them, not us but they forget to mention that fact in their oped)

The whole point to repatriation is bring that money home and have it reinvested in job training and creating more American jobs but they always end up just passing the bulk of the money to the shareholders and nothing happens to help the middle class or the poor and they DON'T pay any tax on that money when it's brought back.

power feeds power

as soon as such overseas places are available
ppl will pour there money

I don't want to make another thread for this, so I'm posting it here as it relates to corporate finances but from another subtext.  It concerns unequal pay for women by employers who continue to deny that it's a fact of life for working women and hurts families, especially single mothers who work full time.  Anyone who has ever done payroll knows it exists but still they deny.  

Well yesterday marked the day that most women have to work through, in order to achieve the same pay as their male counterparts.  So in other words, in order for women to match the salary earned by men in 2013 in the very same jobs, you have to include their earnings for the following pay periods of the next year, through April 8th to equal the salary levels of both genders....on average.  Well the conservatives have been trying to deny this as a myth made up by progressives but they can't really combat the social science that backs up our claims.  They try to discredit what President Obama is doing in this regard as a political ploy but forget that his first act as President was to sign the Lilly Ledbetter Fair Pay Act.

The link below to the Rachael Maddow show has a wonderful discussion on this issue with a prominent professor at George Washington University, about how the conservatives are trying to deny the science proving this gender wage gap is true:

LINK: TRMS

Look on this link for the video of the discussion under the heading:

Rachel Maddow 04/08/14
Gender wage gap exists in real life
Heidi Hartmann, president of the Institute for Women’s Policy Research and professor at George Washington University, talks with Rachel Maddow about what the data and social science literature show about the wage gap between men and women in America.