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Which 'Patriotic' US Companies 'Invested' The Most Cash Overseas Last Year?

Tyler Durden's picture




 

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. Within the group of 60 companies, WSJ found 10 that parked more earnings offshore last year than they generated for their bottom lines. The trend was most pronounced among the 26 technology and health-care companies. Not all of the earnings parked offshore are in cash. Some of the money is used to build plants and buy equipment overseas. Why? Apple said it held $40.4 billion in untaxed earnings outside the U.S. and estimated that it would owe $13.8 billion in tax if it brought that money back to the U.S. That is a 34% tax rate. Since foreign income taxes are creditable on U.S. taxes, that means Apple has paid less than 5% tax on those earnings to date.

 

Click image for larger version (or here for interactive version)

 

Source: WSJ

 

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Tue, 03/12/2013 - 17:54 | 3323986 kliguy38
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Global parasites.....crushing all competition through the World Bank and IMF etc.

Tue, 03/12/2013 - 18:15 | 3324058 Say What Again
Say What Again's picture

I'm into doing simple "back of the envelope" calculations today.

According to the web site provided;

Total Assets parked overseas: $1,300,000,000,000

Let's assume a tax rate of 35%

That yields a tax burden of $455,000,000,000

The Fed is monetizing the debt to the tune of $45,000,000,000 per month

That means that if these greedy companies paid their taxes, like you and I have to, the Fed could postpone QE for about 10 months!

Tue, 03/12/2013 - 18:55 | 3324155 SeattleBruce
SeattleBruce's picture

"The Fed is monetizing the debt to the tune of $45,000,000,000 per month"

$85B/month, right?  So they could only stop for about 5.5 months.  Plus the political leaches would probably spend it on 'new' stimulus programs...

Tue, 03/12/2013 - 19:17 | 3324226 Say What Again
Say What Again's picture

Looks like you caught a small error in my calculations.

Thank you for the correction. 

On [http://www.newyorkfed.org/markets/tot_operation_schedule.html] ...

they say they're buying $45B in treasuries, but I forgot to include the other crap they're "buying" from the "banks."

Nonetheless...   Just think what would happen to the "market" if there was NO Fed intervention, even for 5 months or so.

Tue, 03/12/2013 - 19:28 | 3324255 JohnG
JohnG's picture

I just heard a toilet flushing....

Tue, 03/12/2013 - 19:38 | 3324284 Say What Again
Say What Again's picture

Well I hope you're feeling better now.

Tue, 03/12/2013 - 21:11 | 3324508 philipat
philipat's picture

Logic and Common sense 1.01:

US Corporations may only claim credits for foreign taxes paid WHEN THE PROFITS ON WHICH SUCH CREDITS APPLY ARE RE-PATRIATED AND US TAXES PAID.

Tue, 03/12/2013 - 17:58 | 3323990 swissaustrian
swissaustrian's picture

Nominally high corporate tax rates are harmful in an offshoring enviroment, they actually lower revenue.

Tue, 03/12/2013 - 20:30 | 3324408 max2205
max2205's picture

Some brave soul needs to put an end to this...anyone....hello?

Tue, 03/12/2013 - 17:57 | 3323996 lolmao500
lolmao500's picture

Stop giving them contracts or better yet, remove their charter till they comply with the tax laws.

Tue, 03/12/2013 - 18:10 | 3324042 Raynja
Raynja's picture

isnt the problem that they are complying with the US's thousands of page long tax code?

 

rewrite the tax codeto be no longer than one page long, reading something like:

 

all people, corporations, individuals, and politicians must pay 20% of their income in taxes, from any source including but not limited to: wages, capital gains, dividends, drug sales, patent extortion, bribes, bernanke bux dropped from a helicopter, and other ill-gotten gains.

there are no exceptions, exemptions. or other loopholes.

no income generated outside of the US is taxable.

Tue, 03/12/2013 - 18:30 | 3324078 lolmao500
lolmao500's picture

That would be an improvement over the 80 000 pages of current tax law... and some friends of my mother that work at the IRS have been trying to tell me they know all the tax laws...that they've read the whole book on tax laws. YEAH SURE YOU DID.

Want to work for the IRS? They should be forced to read the whole thing and then pass a 500 pages exam and see how they like it. Want to fuck people over with your illegal taxes? You've got to put up... or shut the hell up.

Tue, 03/12/2013 - 20:21 | 3324387 nmewn
nmewn's picture

WTF?...twenty percent? Why in the hell should the federal government get a fifth of everyones income?

Wed, 03/13/2013 - 10:23 | 3325754 I did it by Occident
I did it by Occident's picture

Why not just 10%?  If it is good enough for God it should be good enough for the Feds.  And not to mention the savings on opportunity costs of tax compliance.  All these bright minds going into accounting and law could be put to better uses.  Tax compliance industry is just a jobs program equivalent of paying people to dig holes and fill them up again.  It makes GDP look better than it actually is. 

Wed, 03/13/2013 - 10:43 | 3325848 andyupnorth
andyupnorth's picture

He got his up-arrows for his good intentions.  At least this way, the percentage is in plain sight for all the nearly illiterate people to see.

However, this tax reform would have to be coupled with a Constitutional amendment requiring a balanced budget.

Wed, 03/13/2013 - 07:57 | 3325333 Atticus Finch
Atticus Finch's picture

How about ALL income generated outside the US is taxable. More likely to brings jobs back to the US.

Wed, 03/13/2013 - 02:16 | 3325155 archon
archon's picture

It's their own way of "going Galt".  People and corporations have choices, and though the US government cried foul, there's nothing stopping them from writing tax laws the same as the tax havens that everyone flees to.  Want to put all the "tax havens" out of business?  Just do the same thing they're doing, and nobody would have a reason to keep their money overseas.  It's the same argument for legalizing marijuana...  make it legal and the "drug problem" goes away.  Make the US a tax haven, and you end the "problem" of corporations putting all their money in tax havens.

Wed, 03/13/2013 - 10:34 | 3325797 I did it by Occident
I did it by Occident's picture

Yep, the corporations are only doing the rational thing.  Who would pay more taxes if they didn't have to? 

My thinking is that since these corporations are tech-related they can play some overseas R&D arbitrage.  They can pay for development/supporting R&D, manufacturing processes,etc. overseas with that money, but the IP and other intangibles, inside secrets are still owned by the company world-wide.  Much of this  stuff is "information" based thus why would they need to bring the money back?  They can get the info they own back to the US for free.  They benefit from the information/trade secrets, IP, copyrights in the US but they don't need to bring the money back to get the benefit of those overseas investments in the US. 

 

Tue, 03/12/2013 - 17:57 | 3323998 groundedkiwi
groundedkiwi's picture

The military complex will protect those offshore assets down to the last patriot. God bless the military.

Tue, 03/12/2013 - 18:11 | 3324047 newworldorder
newworldorder's picture

The military also protects British, German, French, Swiss, Japanese, Chinese multinationals as well as all the Friendly sovereign wealth funds. You might even say that they protect everybody and their ability to transact world trade.

Wed, 03/13/2013 - 10:36 | 3325811 I did it by Occident
I did it by Occident's picture

the spice must flow, after all.

Tue, 03/12/2013 - 18:07 | 3324024 falak pema
falak pema's picture

the word patriotic is incompatible with maximising return of shareholders equity. Move on, this is the neo liberal mantra cast in stone.

Power to the rich of Caymanista world; the true movers n shakers of this happy few breed.

More fool us for being "straight" and not "crooked".

Tue, 03/12/2013 - 18:43 | 3324132 Strider52
Strider52's picture

I once went to Grand Cayman island. Nothing but beautiful beaches and BANKS. Lots of BANKS.

Tue, 03/12/2013 - 18:06 | 3324035 venturen
venturen's picture

I thought all those tech guys were liberal do gooders? 

Tue, 03/12/2013 - 18:11 | 3324049 McMolotov
McMolotov's picture

I thought Dear Leader won the Nobel Peace Prize.

Tue, 03/12/2013 - 18:14 | 3324063 akak
akak's picture

I think you mean the Bilderburger Door Prize.

Tue, 03/12/2013 - 19:08 | 3324187 derek_vineyard
derek_vineyard's picture

those liberal tech guys will cut your balls off for a dollar

Tue, 03/12/2013 - 18:07 | 3324038 Motorhead
Motorhead's picture

I see Berkshire Hathaway made the list.  I wonder what railroads did that ass hole buy overseas.

Tue, 03/12/2013 - 18:13 | 3324060 yogibear
yogibear's picture

Charlie Munger: "Tough it out Americans!"

Tue, 03/12/2013 - 18:12 | 3324055 yogibear
yogibear's picture

The US Jobs Czar, Jeff Immelt , is doing a good job of avoiding paying taxes and promoting jobs overseas.

He should be renamed Chinese Jobs Czar.

Tue, 03/12/2013 - 18:12 | 3324057 Critical Path
Critical Path's picture

Look at big pharma in the top 10, what is there about 4-5 of them: Pfizer, J&J, Merck, Abbot... making their shit cheaply abroad and then selling it about a few thousand percent (maybe a few ten thousand percent) higher in the US, all with the help of massive amounts of money spent lobbying each year.

Tue, 03/12/2013 - 18:23 | 3324087 Bear
Bear's picture

Top Lobby in DC gets top $$ in USA, tax loopholes abroad, top share prices for their stock, top bonuses for execs and gives the FED something in which to 'invest'. This seems like a real win-win-win-win-win situation with the only loser the sheeple of American.

Tue, 03/12/2013 - 18:17 | 3324069 yogibear
yogibear's picture

Certainly no loyalty to the US.

Why would those in the military feel the need to risk their lives for many of these corporations?

Wed, 03/13/2013 - 10:43 | 3325847 I did it by Occident
I did it by Occident's picture

“I spent 33 years and four months in active military service and during that period I spent most of my time as a high class thug for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”

 General Smedley Butler

Wed, 03/13/2013 - 10:46 | 3325870 I did it by Occident
I did it by Occident's picture

Another good one:

“War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.” – General Smedley Butler

Tue, 03/12/2013 - 18:16 | 3324073 Bear
Bear's picture

 You forgot the Federal Reserve a 'company' that has parked a Trillion offshore in Euro banks ... an no one in the MSM took notice (or cares?) 

Tue, 03/12/2013 - 18:30 | 3324105 DOT
DOT's picture

Heshootshescores !

Tue, 03/12/2013 - 18:24 | 3324089 reTARD
reTARD's picture

This list looks just like my pension fund's portfolio!

Tue, 03/12/2013 - 18:42 | 3324096 Kirk2NCC1701
Kirk2NCC1701's picture

In corporate new-speak, they are "increasing their global footprint" to... increase operations and opportunities, and to "increase shareholder value".

Translation:  After our US employees have turned things into turnkey operations that trained monkeys can operate, after we have moved these ops overseas and they've taught these 3rd world people everything they need to know, we're putting the proverbial Monty-Python footprint on our US employees.  That way, when we've cut out the US workers, and we've realized all the customized tax looholes and benefits, we can keep giving our execs and board members all those stock options, bonuses and perks.  We are increasing the value of our shares.  After all, laying off or off-shoring more people and crafting custom-legislation can be risky business, and risk-takers should be rewarded.  /sarc

BTW, this is almost verbatim what one exec said in a board room meeting I attended.  It elicited a good, hearty laugh.  Until the PR gal chimed in and got everyone back on the PC and PR-correct lines of corporate mantra that are palatable to politicians, MSM and the... sheep.

Clean-cut con-artists, crooks and scumbags, with MBA's and Armani suits!  Yet church-going, family men to a T.

Tue, 03/12/2013 - 18:31 | 3324107 Timmay
Timmay's picture

PLEASE PLEASE someone find the top 10 donors to the Obama campaign this past year and compare it to this list.

Tue, 03/12/2013 - 18:52 | 3324151 Shizzmoney
Shizzmoney's picture

They prob donated to the other side too...its just a "hedge" for them.

Tue, 03/12/2013 - 18:31 | 3324110 rhinoblitzing
rhinoblitzing's picture

Looks like a good list.....

Tue, 03/12/2013 - 19:02 | 3324175 notquantumdum
notquantumdum's picture

Do we blame the companies for outsourcing or the policy-changing politicians for making it less competative to create the jobs in the US?

Tue, 03/12/2013 - 19:43 | 3324294 Trimmed Hedge
Trimmed Hedge's picture

If people stopped buying junk from these companies, maybe these corps might have a few less bux to play around with...

Wed, 03/13/2013 - 07:48 | 3325316 Atticus Finch
Atticus Finch's picture

Policy-changing politicians provided tax benefits to corporations encouraging moves off-shore. Not following your logic.

Tue, 03/12/2013 - 19:45 | 3324300 azengrcat
azengrcat's picture

Name this CEO:

 

"We are focusing on high growth regions in Chiner and Indier"

Tue, 03/12/2013 - 20:15 | 3324364 akak
akak's picture

LOL!

And the funniest part of it is, the people who do that kind of thing (adding "r"s where they don't belong) NEVER realize that they are doing it --- and will heatedly deny that they do so, even when confronted directly on it.  Like the Brits who will torture the word "drawings" into "drawerings", or who will order a "vodker and tonic".  And the strange thing is, they are EXACTLY the same people who will routinely drop "r"s where they should be pronounced, as for example the Aussies who say the word "MAHHHket" instead of "market".

I have an aunt from Massachusetts who calls my two cousins, Rhea and Kevin, "Rear and Kevin".  We laugh EVERY time she says it, and after many years she STILL does not understand why.

Tue, 03/12/2013 - 19:58 | 3324332 poor fella
poor fella's picture

What is this? 

Some kind of hit-list?

Tue, 03/12/2013 - 20:14 | 3324374 Go Tribe
Go Tribe's picture

Copyright 2013, Madame LaFarge

Tue, 03/12/2013 - 21:11 | 3324506 hooligan2009
hooligan2009's picture

only if you aren't tempted into playing the game of corporate jets to faraway places, zero taxes and 7 figure salary packages

Tue, 03/12/2013 - 20:38 | 3324429 Freewheelin Franklin
Freewheelin Franklin's picture

So, they are not paying corporate taxes. How much are they saving us in price inflation? Are they increasing their margins or passing those savings on to consumers? That's the question that needs to be asked.

Tue, 03/12/2013 - 20:48 | 3324453 Kreditanstalt
Kreditanstalt's picture

Apple has paid less than 5% tax on those earnings to date

Great!  More power to them.  We should all pay such a rate...or less...!

Starve the beast.

Tue, 03/12/2013 - 22:13 | 3324501 hooligan2009
hooligan2009's picture

the result of successive moves to globalize and get a better deal for US consumers or encourage foreigners to buy US goods, which are of course produced offshore anyway.

notice that Boeing and Wal-Mart are missing?

1.3 trillion of cash assets probably is around just one quarter of plant, machinery, offices etc..for a total of 6.5 trillion invested overseas that is not invested in the USA..even today thats 40% of gdp that might yield GDP growth of 2-3%

these companies would rahter bankrupt the USA and throw americans out of work than address america's economic problems.

i know that they are "obligated" to maximize profit, but come on..how many people would the parked 1.3 trillion employ, how much profit would be foregone and how much in taxes would the companies and their employees pay?

the money is parked ffs...it is not even being used..talk about cutting off your nose to spite your face..i bet obama doesn't even know that the business leaders he interviewed prior to the fiscal cliff deal were laughing in his face whilst they asked him to put things right.

Wed, 03/13/2013 - 02:47 | 3325174 John Skookum
John Skookum's picture

Good!  Any legal way to starve the government monster is fine by me.

Wed, 03/13/2013 - 03:05 | 3325182 dunce
dunce's picture

I have often wondered why some of these large international corporations  do not split into a US company and an overseas company and issue current shareholders ADRs for the separate overseas company. They have to pay taxes to the country on the earnings in that country now. Perhaps there were advantages many years ago in having the US Navy protecting your foreign assets, but that is no longer true and they have to suffer false charges of "blood for oil". Some politicians might even pause in their condemnations long enough to say good bye.

Wed, 03/13/2013 - 06:41 | 3325258 shayneals shayneals
shayneals shayneals's picture

kind of reminds me how the aristocrats in england let the empire collaspe while they were building the usa financial system. maybe the oligarchs think they can set up base in china. if they do they are stupid

Wed, 03/13/2013 - 07:42 | 3325309 Atticus Finch
Atticus Finch's picture

So we now have a comprehensive list of the executives and boards of directors who should be placed in front of a firing squad.

Do NOT follow this link or you will be banned from the site!