How Tax Bills Would Reward Companies That Moved Money Offshore

NOTE:  President Trump has repeatedly stated that by lowering the corporate tax rate, American corporations will be encouraged to bring funds back into this country. Like so much else in this bill, the opposite appears to be the case. 

The following article by Jesse Drucker was posted on the New York Times website November 29, 2017:

An office on the island of Jersey for Appleby, a law firm specializing in offshore holdings. The Republican tax plans would lower rates on corporate profits held overseas to encourage American companies to bring the money to the United States. Credit Andrew Testa for The New York Times

Over the past few decades, some of the largest companies in the United States made a big bet: By stashing hundreds of billions of dollars of profits offshore, they could slash their taxes and bolster their profits.

It would take a generation to see if the strategy would fully pay off, because the law allowed companies only to defer the taxes on overseas earnings, not to permanently avoid them. Would they ever be able to bring the profits back to the United States without incurring huge tax bills?

Some 20 years after the tax-avoiding technique became widespread, it is poised to pay off in a big way. The Republican tax bills making their way through the House and Senate would allow companies to bring nearly $3 trillion in profits home, at greatly reduced tax rates. Continue reading “How Tax Bills Would Reward Companies That Moved Money Offshore”