Politicians are up in arms over the growing wave of U.S. corporations hooking up with foreign companies as a way to lower their U.S. tax bills.
Plenty of companies that do business abroad delay paying big bucks to Uncle Sam by leaving foreign profits abroad, indefinitely. As long as they don’t bring that money back home and reinvest it in the business, they don’t have to pay U.S. tax on it.
Microsoft, for example, said that it lowered its tax bill by $29.6 billion last year by keeping $92.9 billion abroad, according to a regulatory filing by the company.
Why are so many U.S. firms reluctant to bring their profits home? Most experts say the problem is America’s corporate tax rate, which is 35% on most corporate income. That’s the highest rate among developed economies.
Companies typically reveal how much cash they’re holding abroad in annual regulatory filings, but unlike Microsoft, don’t often say how much in U.S. taxes they haven’t paid yet.
Here are just seven companies that are keeping more than $50 billion offshore as of their most recent filings:
Apple (Tech30): $111.3 billion ,
General Electric (: $110 billion )
Microsoft (Tech30): $92.9 billion ,
Pfizer (: $69 billion )
Merck (: $57.1 billion )
IBM (Tech30): $52.3 billion ,
Johnson Johnson (: $50.9 billion )