Corporate Cash Being Kept Overseas

American corporations are stashing cash overseas instead of bringing it back home. This isn't new to the government as they had to give a special tax holiday to corporations in 2004 to bring income back to the US. The tax rate was set at 5.25% and the cash had to be used toward investments. Corporations are making sure they keep money where it is made until another tax holiday comes around. The current repatriation tax can reach 35%.

A lot of cash is kept overseas because of currency exchange rates. Many companies would like to see currency rates become a little more favorable before trying to convert to dollars. It might be wise for some to go ahead and convert with the problems in the Euro zone. Some cash is kept in the local currency to be reinvested. This is especially prevalent in emerging markets.

Apple has $82B in cash with $54B overseas. Cisco has $44B with $40B overseas. These are two examples of companies with loads of cash that should be spent on dividends or share buybacks or even acquisitions. Instead, our extremely high tax rate is keeping this cash overseas. Another tax holiday is sorely needed to jumpstart this economy.