A recent report by Citizens for Tax Justice (CTJ) shows how offshore cash holdings by American companies is becoming an even bigger issue than it was just one year ago.
Ten major American corporations, primarily in the technology and pharmaceutical sectors, have increased their offshore profit holdings by $5 billion or more in the last year alone as shown on this list:
In total, these ten corporations have added $106.6 billion to their offshore holdings. Most of these profits were earned in the United States but have been shifted to offshore tax havens to keep their American corporate tax burden to a minimum.
Not only have these ten companies added over $100 billion to their offshore holdings, an additional 92 of the Fortune 500 companies have increased their offshore profit holdings by at least $500 million each for an additional total of $229 billion. Over the past four years, 48 American corporations have added at least $3 billion to each of their offshore cash piles for a grand total of $518 billion.
Current laws prevent the U.S. government from taxing these so-called foreign profits and it is estimated that this "oversight" will cost the federal government an estimated $600 billion over the next decade as shown in this Joint Committee Report from the Staff of the Joint Committee on Taxation.
From CTJ, here is a listing of the unrepatriated foreign profits from 20 of the top Fortune 500 corporations between 2009 and 2011:
That's pretty much a "who's who" of the American corporate world, isn't it?
Note that the top 20 companies hold a total of $793.6 billion in offshore profits and the remaining 300 of the Fortune 500 companies that disclose holding at least some profits overseas hold an additional total of $794.3 billion for a grand total of $1.588 trillion. What's interesting to see is that General Electric heads the list; its CEO, Jeffery R. Immelt, just happens to be the head of Barack Obama's President's Council on Jobs and Competitiveness whose responsibilities included the following:
1. Solicit ideas from across the country about how to bolster the economy and the prosperity of the American people that can inform the decision making of the President;
2. Report directly to the President on the design, implementation, and evaluation of policies to promote the growth of the American economy, enhance the skills and education of Americans, maintain a stable and sound financial and banking system, create stable jobs for American workers, and improve the long term prosperity and competitiveness of the American people; and
3. Provide analysis and information with respect to the operation, regulation, and healthy functioning of the economy and other factors that may contribute to the sustainable growth and competitiveness of American industry and the American labor force.
So, how's that working out for Main Street America?
In an odd twist of fate, in mid-February 2013, GE announced "furloughs" for roughly 500 factory workers at its much ballyhooed Appliance Park facility in Louisville, citing sluggish appliance sales.