Tags: Companies | Cash | Overseas | Apple

CNBC: Companies Holding $2.6 Trillion Pile of Cash Overseas

CNBC: Companies Holding $2.6 Trillion Pile of Cash Overseas
(Dollar Photo Club)

Monday, 01 May 2017 12:10 PM

American companies looking to avoid paying domestic tax rates reportedly are holding about $2.6 trillion in overseas earnings.

That number has been rising steadily for years, according to new research from Capital Economics.

The top companies of overseas holdings are Apple, Pfizer and Microsoft, according to a report from the Institute on Taxation and Economic Policy. General Electric and IBM round out the top five, CNBC reported.

Apple's stockpile of cash reportedly has topped a quarter of a trillion dollars, an unrivaled hoard that is greater than the market value of either Wal-Mart Stores Inc. or Procter & Gamble Co. and exceeds the foreign-currency reserves held by the U.K. and Canada combined, The Wall Street Journal reported.

Apple's money, more than 90% of which is stockpiled outside of the U.S., has drawn fresh attention as President Donald Trump has proposed slashing business taxes and granting a one-time tax holiday on corporate cash brought home, WSJ.com reported.

"Those policies could ratchet up pressure on the tech giant to dole out more money to shareholders or make splashy acquisitions," the WSJ explained.

Meanwhile, CNBC reported that at 35 percent, the U.S. corporate tax rate is the highest in the world. That's caused many multinationals to keep their overseas earnings abroad in tax shelter countries like Ireland and Luxembourg.

However, approval of the broader plan that entails the tax holiday is unlikely, according to Andrew Hunter, U.S. economist for Capital Economics.

"With the deep cuts to individual income and corporate tax rates estimated to increase the federal budget deficit by $7 trillion over a decade," he wrote, CNBC reported, "there is next to no chance of the plan ever being approved by Congress in its current form."

The main obstacles for the Trump tax plan are Senate rules. While reconciliation bills need only a majority in the Senate, they cannot increase the deficit beyond a 10-year horizon, which the tax plan is estimated to do. The alternative is to garner 60 votes in the Senate and be signed into permanent law.

"The chances of the latter happening are close to zero," Hunter wrote.

Meanwhile, many other respected economic voices are predicting robust growth and additional stock-market gains amid Trump's blueprint to truly "Make America Great Again."

David Horowitz, author of the best-selling book "Big Agenda: President Trump's Plan to Save America," told Newsmax TV that the market rally since Republican Donald Trump won the election has more room for gains as the president pushes his pro-business agenda.

“There's more upside. Starting from when he was president-elect he started this stock market boom,” he told Newsmax TV's “The Income Generation Show.”

“There will be corrections. There are going to be setbacks along the way like the healthcare which they hurried too fast. If you're looking over the long term of this administration I think the stock market is going to love Trump,” Horowitz said.

Other respected economic gurus agree.

Trump has a victory coming, "a home run," with his tax-reform plan announced this week, but expect some "back and forth" debate as with healthcare, economic pundit and Trump campaign adviser Larry Kudlow said Sunday, per The Hill.

"I can't think of anything better for business, better for wage earners, better for economic growth than Trump's 15 percent tax cut plan," Kudlow told "The Cats Roundtable" on 970 AM-N.Y.

"I think it's a home run."

Kudlow acknowledges there will be still be considerable debate, perhaps even a "struggle," in getting the game-changing reform passed in a stalemated Congress that has blocked everything President Trump has tried to do to date.

"Big Agenda: President Trump's Plan to Save America" is available at bookstores everywhere – or get your copy on Amazon – Click Here Now

(Newsmax wire services, Reuters and Bloomberg news contributed to this report).

© 2019 Newsmax Finance. All rights reserved.

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American companies looking to avoid paying domestic tax rates reportedly are holding about $2.6 trillion in overseas earnings.
Companies, Cash, Overseas, Apple
Monday, 01 May 2017 12:10 PM
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