When the Republicans complain about the National deficit, they need to partially thank the Reagan tax cuts of 1968 which allows the offshore housing of money.
A recent report( http://ctj.org/...) gives a very good description of the game being played.
Below is extracted from the report.
Fortune 500 companies are holding more than $2.1 trillion in accumulated profits offshore for tax purposes. Just 30 Fortune 500 companies account for 65 percent of these offshore profits. These 30 companies with the most money offshore have booked $1.4 trillion overseas for tax purposes. Only 57 Fortune 500 companies disclose what they would expect to pay in U.S. taxes if these profits were not officially booked offshore. In total, these 57 companies would owe $184.4 billion in additional federal taxes.
Based on these 57 corporations’ public disclosures, the average tax rate that they have collectively paid to foreign countries on these profits is a mere 2 Offshore Shell Games 2015 6.0 percent, indicating that a large portion of this offshore money has been booked in tax havens. If we apply that average tax rate of 6.0 percent to the entirety of Fortune 500 companies, they would collectively owe $620 billion in additional federal taxes.
Some of the worst offenders include:
• Apple: Apple has booked $181.1 billion offshore — more than any other company. It would owe $59.2 billion in U.S. taxes if these profits were not officially held offshore for tax purposes. A 2013 Senate investigation found that Apple has structured two Irish subsidiaries to be tax residents of neither the United States, where they are managed and controlled, nor Ireland, where they are incorporated. This arrangement ensures that they pay no tax to any government on the lion’s share of their offshore profits.
• American Express: The credit card company officially reports $9.7 billion offshore for tax purposes on which it would owe $3 billion in U.S. taxes. That implies that American Express currently has paid only a 4 percent tax rate on its offshore profits to foreign governments, indicating that most of the money is booked in tax havens levying little to no tax. American Express maintains 23 subsidiaries in offshore tax havens.
• Nike: The sneaker giant officially holds $8.3 billion offshore for tax purposes on which it would owe $2.7 billion in U.S. taxes. This implies Nike pays a mere 2.5 percent tax rate to foreign governments on those offshore profits, indicating that nearly all of the money is officially held by subsidiaries in tax havens. Nike likely does this in part by licensing the trademarks for some of its products to three subsidiaries in Bermuda to which it then pays royalties (essentially to itself).
As was done previously, the game will be to have a 'offshore funds bring back' where it will be stated that 'look we will allow them to bring the money back and only charge them (a small number) of tax which will decrease the deficit (they will claim a deficit reduction for the small amount!) ', They will claim the companies will spend the money in the US. Past history is the money leaves the US practically immediately since there is no real requirement they keep the money in the US.
Be prepared for this shell game in certain peoples tax cuts! The GAME getting ready to be played.