In today’s Wall Street Journal, John Chambers, chairman and chief executive officer of Cisco Systems and Safra Catz, the president of Oracle Corporation, lay out a strong case for lowering the tax U.S. companies pay when they bring back overseas earnings. Under current tax policy, U.S. companies could pay almost 40 cents in taxes for every dollar of overseas earnings they decide to “repatriate” back home. That’s a clear disincentive.
And as Chambers and Catz point out, “… with corporate bond rates falling below 4%, it’s hard to imagine any responsible corporation repatriating foreign earnings at a combined federal and state tax rate approaching 40%.” In contrast, lowering the “toll charge” to roughly five percent would unleash as much as one trillion in to the U.S. economy, a private stimulus that could be used for job retention and creation, as well as other types of much-needed “homeland investment.”
Their op-ed is, “The Overseas Profits Elephant in the Room,” with the sub-headline, “There’s a trillion dollars waiting to be repatriated if tax policy is right.”
Dorothy Coleman is the National Association of Manufacturers’ vice president for tax and domestic economic policy.