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Is the US government making a big mistake turning a blind eye to money that could be used to build roads and other infrastructure? Two trillion dollars is currently stockpiled overseas by US companies. Under US tax law, these profits are subject to taxation upon return to the US. A possible solution President Obama is considering is a 'tax holiday' where the government institutes a lower tax rate to incentivize companies to bring the money home.
U.S. companies have more than $2 trillion amassed outside the U.S., according to a Bloomberg News review earlier this year of the securities filings of 304 companies. Apple has more than $200 billion in cash stockpiled, with almost 90 percent of it overseas. As of its most recent annual report, Apple had $69.7 billion in profits on which it hasn’t assumed taxes. U.S. lawmakers are looking for ways to get some of that cash back in the U.S. President Barack Obama supports a one-time 14 percent tax on stockpiled profits, with the proceeds going to highways and other infrastructure programs. Some Republicans favor a similar approach and are working on a detailed plan.
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