Companies Are Stashing So Much God Damn Cash Overseas
A new report from Moody’s says that major U.S. companies are sitting on as much as $1.2 trillion in cash held overseas—hey, that’s enough to pay our national credit card bill!
Since multinational corporations don’t care for paying the hefty U.S. tax rate that they would be bound to pay if they bought their fortune back here to the U.S., they just leave it overseas. Sitting there, gleaming and golden. A mere five companies—Apple, Google, Oracle, Microsoft, and Cisco—are holding more than half a trillion dollars in cash between them, the vast majority of it overseas. (Tech companies are prone to this because their valuable intellectual property can easily technically reside in say, Ireland, whereas a McDonald’s restaurant is just located wherever the hell it is.)
The effects of this depend on your perspective. For investors, that huge cash pile is a cushion against a business downturn: if Apple, for example, stops selling enough iPhones to push its stock price higher, investors will just demand payoffs out of the cash pile to make up for it. For the general public in America, these cash piles sitting overseas represent an enormous loss of potential tax revenue that could be used to, you know, make all of our lives better somehow. For the companies themselves, it’s a stalemate: they hint that maybe they would be tempted to bring some of this cash on home if the government would offer them a sweet tax break in order to do so. Obama, in fact, tried to strike a one-time deal in order to bring that money home, but it didn’t get through Congress. So the money just keeps piling and piling and piling up, somewhere else, in a huge vault across the sea.
Let’s just... start seizing the homes of CEOs and Republican Congressmen, until they work it out.