In today's WSJ there is an analysis of 60 big US corps that says altogether they put a total of $166 billion offshore last year, 'thus shielding more than 40% of their annual profits from US taxes'. It also means those companies can't use that money to pay dividends, buy back stock, or make investments here in the US. In some cases, these companies moved more earnings offshore than equaled their bottom line, to reduce their tax burden here. Upshot - the US economy loses out on potential growth and the US Treasury loses out on possible revenue.
Why? One reason is a very bad tax code for businesses. Leaving aside the argument on personal taxes, the current US corp tax rate is the highest in the world. And we tax global profits, whereas most other countries tax only profits generated locally. Which means the big corps aren't bringing foreign generated profits home to reinvest here. How crazy is that?
Why? One reason is a very bad tax code for businesses. Leaving aside the argument on personal taxes, the current US corp tax rate is the highest in the world. And we tax global profits, whereas most other countries tax only profits generated locally. Which means the big corps aren't bringing foreign generated profits home to reinvest here. How crazy is that?
