"U.S. companies are making record profits. And more of the money is staying offshore, and lightly taxed.
A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year. That shielded more than 40% of their annual profits from U.S. taxes, though it left the money off-limits for paying dividends, buying back shares or making investments in the U.S. The 60 companies were chosen for the analysis because each of them had held at least $5 billion offshore in 2011.
The practice is a result of U.S. tax rules that create incentives for companies to maximize the earnings, and holdings, of foreign subsidiaries. The law generally allows companies to not record or pay taxes on profits earned by overseas subsidiaries if the money isn’t brought back to the U.S.”
Gotta love when the WSJ tries to feign surprise about these “discoveries” when on Sunday, they are the same newspaper editorializing in favor of the policies that maintain this!