The biggest U.S.-based companies have accumulated $1.95 trillion in offshore profits after adding $206 billion to those stockpiles last year.
The multinational companies have an incentive to park profits overseas because federal lawmakers haven’t decided how those funds should be taxed. President Barack Obama and a divided Congress want to overhaul corporate tax laws and bring that money back to the U.S., though they haven’t agreed on the details.
“Congress hasn’t acted because of disagreements over whether to be tougher on U.S. companies operating abroad amid broader disputes over government spending and taxation,” as Richard Rubin wrote in this Bloomberg News story, which analyzed securities filings by 307 corporations.
The Obama administration’s proposals would “make it harder for companies to move profits offshore and defer U.S. taxes,” Rubin reported March 5.
A draft plan last month from Rep. Dave Camp of Michigan, the top Republican tax writer in Congress, calls for levying a one-time tax on the assets that U.S. multinational companies have built up outside the country, with proceeds dedicated for a transportation trust fund.
Check out this graphic, which lists the companies with the most accumulated offshore profits. General Electric Co. is tops with $110 billion, followed by Microsoft Corp. with $76.4 billion and Pfizer Inc. with $69 billion.