CAP en Español
Small CAP Banner

Idea of the Day: Taxing Offshore Corporate Profits

  • print icon
  • SHARE:
  • Facebook icon
  • Twitter icon
  • Share on Google+
  • Email icon

idea light bulb

Recent investigations have revealed that multinational corporations are stockpiling trillions of dollars in “offshore” income, purportedly trapped overseas because of U.S. corporate taxes. This has created the illusion that there is a large stock of cash somewhere offshore, just waiting to be invested in our struggling economy, if only we could somehow unlock it. For example, House Majority Leader Eric Cantor (R-VA) asserted that “encouraging businesses to bring overseas earnings back home to America will spur investment, economic growth and job creation,” while Cisco Chairman and CEO John Chambers and Oracle President and CFO Safra Catz wrote that “by permitting companies to repatriate foreign earnings at a low tax rate—say, 5%—Congress and the president could create a privately funded stimulus of up to a trillion dollars.”

These arguments are wrong. They are based on a faulty premise; these “trapped overseas” profits are neither overseas nor trapped. It is true that for accounting purposes, multinational corporations keep these dollars off of their U.S. books. But in the real world, the money is often deposited in U.S. banks, circulating in the U.S. economy, and available for a wide variety of domestic investments. For nearly all practical purposes, that money is already here, being put to work in the U.S. economy.

For more on this topic, please see:

To speak with our experts on this topic, please contact:

Print: Liz Bartolomeo (poverty, health care)
202.481.8151 or

Print: Tom Caiazza (foreign policy, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or

Print: Allison Preiss (economy, education)
202.478.6331 or

Print: Tanya Arditi (immigration, Progress 2050, race issues, demographics, criminal justice, Legal Progress)
202.741.6258 or

Print: Chelsea Kiene (women's issues,, faith)
202.478.5328 or

Print: Benton Strong (Center for American Progress Action Fund)
202.481.8142 or

Spanish-language and ethnic media: Jennifer Molina
202.796.9706 or

TV: Rachel Rosen
202.483.2675 or

Radio: Chelsea Kiene
202.478.5328 or


This is part of a regular column: Idea of the Day

For more from the same column, click here