Here’s another sign the tax code needs updating: the biggest American companies have expanded their offshore investments 14.4 percent since last year.
That’s an increase of $183 billion by 83 top U.S. companies. Altogether, they currently have $1.46 trillion in profits invested outside the country. If you include all American companies that number probably comes much closer to $2 trillion, according to Bloomberg, which examined the investments and found out who’s pumping the most cash overseas.
While the names of America’s biggest tech companies grab attention, the biggest offshore investor is General Electric, which has $108 billion in foreign holdings. Next is Pfizer with $73 billion. They’re followed by Merck, Johnson & Johnson, and IBM.
In 2011, just three companies had at least $40 billion in offshore investments. Now it’s 11, including Apple, Cisco, and Citigroup. Apple and Google both declined to comment to Bloomberg for the story.
How much is this costing our tax system? Microsoft says if it brought home all its offshore cash, they’d owe Uncle Sam $19.4 billion. That’s roughly a third of what they have overseas, so you can imagine why they’re in no rush to do so.
The U.S. federal debt is currently at $11.855 trillion. If all American companies’ offshore investments were brought home and taxed at 30 percent, the debt could be lowered 5 percent.