Reply #11: Backwards.

[Igel]

It was earned overseas and taxed in the jurisdiction in which it was earned.

Under current law, the easiest way to bring that money into the US ("repatriate" doesn't imply "expatriation") is to treat it as new, untaxed income. Meaning that it was taxed in France or Kenya or Mexico under whatever laws they have, and then the amount brought to the US taxed as though it were never taxed.

Most countries have the total income tax not exceed their country's income tax. So if you pay tax one country and then shift the funds, you only pay additional income tax if the destination country's tax rate is higher. And you only pay the difference. The US is a bit of a rogue in this regard, but if foreign corporations repatriate money earned in the US they're not double taxed.

Anyway, the result is that companies keep the income abroad and don't bring it home. They can find uses for it abroad--shift money from France to Brazil, from S. Korea to Mexico. But if they want to bring it home there are hoops to jump through to avoid double taxation (as opposed to additional taxation).

There was a big spike in corporate financing in the early 2000s (maybe 2000). What they're requesting has been done before, and it resulted in a huge influx of money from abroad. Shifted the trade deficit significantly for a few months as billions "came home".

It's also worth mentioning that current corporate tax policy has also been personal tax policy. If I'm an American working in Moscow, I have to file a US tax return and pay US tax in addition to the tax I pay in Russia. This puts expatriates in a bit of a bind: Many don't file tax returns, running the risk of fines and penalties when they return. Many find ways to reduce their relationship to the US, taking foreign citizenship, for instance. It's hardest for those working abroad and still supporting families or relatives in the US.