U.S. multinationals have made a lot of money overseas, but bringing their overseas earnings to their U.S. headquarters subjects that cash to corporate taxes of 35 percent. Because of this, U.S. IT businesses are holding over half a trillion dollars in cash overseas. That results in such behavior as Apple borrowing $17 billion to fund a return of capital to shareholders instead of tapping its estimated $145 billion in cash overseas.
U.S. companies say a permanent or temporary tax slash would allow them to invest that cash in their businesses and create jobs domestically. The U.S. government, however, is loath to give up the potential tax revenue on that income. Furthermore, the last tax break resulted in companies mainly increasing shareholder payouts.
Here's a look at the magnitude of how much cash is waiting to be repatriated. Also, check out the rest of CRN's special report on overseas profits, available exclusively on the CRN Tech News App.