Dodging Repatriation Tax Lets U.S. Companies Bring Home Multinational Cash

[The Straight Story]

At the White House on Dec. 15, business executives asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens.

The money -- including hundreds of billions in profits that U.S. companies attribute to overseas subsidiaries to avoid taxes -- is supposed to be taxed at up to 35 percent when it’s brought home, or “repatriated.” Executives including John T. Chambers of Cisco Systems Inc. say a tax break would return a flood of cash and boost the economy.

What nobody’s saying publicly is that U.S. multinationals are already finding legal ways to avoid that tax. Over the years, they’ve brought cash home, tax-free, employing strategies with nicknames worthy of 1970s conspiracy thrillers -- including “the Killer B” and “the Deadly D.”

Merck & Co Inc., the second-largest drugmaker in the U.S., last year brought more than $9 billion from abroad without paying any U.S. tax to help finance its acquisition of Schering-Plough Corp., securities filings show. Merck is also appealing a federal judge’s 2009 finding that Schering-Plough owed taxes on $690 million it had earlier brought home from overseas tax-free.


http://www.bloomberg.com/news/2010-12-29/dodging-repatriation-tax-lets-u-s-companies-bring-home-cash.html

[DrDan]

1. perhaps a friendly WH can help rid the corporations of these unfair taxes

[WinkyDink]

2. Posted earlier:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x87234

[Progressive_In_NC]

3. My boss refers to the US Corporate Tax as a 20% Tariff on goods produced in the US

That being said, we produce all of our goods in the US being a marketing company, and he is fairly progressive on most other issues.

He pointed out that profit from goods made in China/India are subjected to either no tax or a minimal tax. Many developing markets (and european markets) have corporate tax rates at or below 15%. So we can do business in the US and pay 35% or source all of that business somewhere else and pay 0-15% on all corporate income.

We are not a large business, so we don't get all of the loopholes the 500 top corporations get. If we were producing goods for sale in retail stores, I can guarantee, we'd have some form of foreign presence to stay competitive.