Here’s What Could Be Fixed by the Taxes on Apple’s Offshored Profits

These 26 big companies are sitting on billions that could go to schools, parks, and roads.


American companies have around $2.1 trillion in untaxed profits stashed overseas, according to a new report by the Center for Effective Government and the Institute for Policy Studies. About half of that amount is held by 26 large companies like Apple, General Electric, and Microsoft. If these companies paid federal taxes on their offshored profits from 2014—and got refunds for taxes they’ve already paid to other countries—they would owe an estimated $364 billion.

Here’s what could be done with that money:

The report also estimates the amount of taxes that the largest stockpilers would owe if their 2014 profits stored abroad were taxed:

The reason American companies can avoid the IRS by keeping earnings has its roots in a 1986 tax bill that lets firms postpone paying taxes on profits stored abroad until they are “repatriated,” or brought back to the United States. Since then, stashing profits abroad has become one of a number of loopholes used by corporations to avoid taxes. (Another common one is tax inversion, or moving corporate headquarters abroad, if only on paper.) In 2004, Congress passed a one-time “tax holiday” as part of the American Jobs Creation Act, enabling companies to repatriate profits at a 5.25 percent tax rate instead of the usual 35 percent corporate tax rate.

Evidence shows that this economic experiment didn’t work so well. According to a Center on Budget and Policy Priorities report from 2011:

Firms mostly used the repatriated earnings not to invest in U.S. jobs or growth but for purposes that Congress sought to prohibit, such as repurchasing their own stock and paying bigger dividends to their shareholders. Moreover, many firms actually laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders.

Though the 2004 tax holiday was billed as a one-time event, Congress is considering another one as part of a the Invest in Transportation Act of 2015, cosponsored by Sen. Barbara boxer (D-Calif.) and Sen. Rand Paul (R-Ky.). Boxer has called it a “win-win for our economy and our country.” The Center for Effective Government and the Institute for Policy Studies see it otherwise: “The proposed ‘tax holidays’ would generate a relatively small, one-time revenue bump while allowing large corporations to avoid much larger amounts of tax owed over the longer term.”

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WE'LL BE BLUNT.

We have a considerable $390,000 gap in our online fundraising budget that we have to close by June 30. There is no wiggle room, we've already cut everything we can, and we urgently need more readers to pitch in—especially from this specific blurb you're reading right now.

We'll also be quite transparent and level-headed with you about this.

In "News Never Pays," our fearless CEO, Monika Bauerlein, connects the dots on several concerning media trends that, taken together, expose the fallacy behind the tragic state of journalism right now: That the marketplace will take care of providing the free and independent press citizens in a democracy need, and the Next New Thing to invest millions in will fix the problem. Bottom line: Journalism that serves the people needs the support of the people. That's the Next New Thing.

And it's what MoJo and our community of readers have been doing for 47 years now.

But staying afloat is harder than ever.

In "This Is Not a Crisis. It's The New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, why this moment is particularly urgent, and how we can best communicate that without screaming OMG PLEASE HELP over and over. We also touch on our history and how our nonprofit model makes Mother Jones different than most of the news out there: Letting us go deep, focus on underreported beats, and bring unique perspectives to the day's news.

You're here for reporting like that, not fundraising, but one cannot exist without the other, and it's vitally important that we hit our intimidating $390,000 number in online donations by June 30.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. It's going to be a nail-biter, and we really need to see donations from this specific ask coming in strong if we're going to get there.

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