Anyone remember the period in the 80s when there was a big focus on US personnel reported MIA (missing in action) in the Vietnam war? There was a whole campaign based around the belief many of them were still in Vietnam, probably being held as prisoners of war, and there were accusations of a conspiracy by the US and Vietnamese governments to hide their existence. Several movies were made based on this premise, most famously Sylvester Stallone’s Rambo II, as well as Missing In Action by Chuck Norris.
While the Vietnamese war provided its own particular story with the MIA theme, one thing common to the denouement of any war is the call to “bring our boys back home”. All nations, victors or vanquished, seek to bring everyone back and the tales of the trials and tribulations some of them endure in their homecoming can be positively Homeric.
It’s not just confined to military personnel, however. The IT industry in the US is currently suffering from its own difficulties in bringing something back from overseas against a government that, to them, is making it as difficult as possible to do so. The something they’re trying to bring back from overseas isn’t MIA because everyone knows it’s there, but it’s trapped, stranded.
What is this something? Cash. Sadly, many IT companies have mountains of cash stranded overseas and feel themselves unable to “bring the cash back home”. The most recent very public instance of this tragic situation came in Apple’s results when it announced plans for a $60bn share buy-back and an increase in dividends to be paid for with borrowed money. Why would a company sitting on a cash pile of around $147bn borrow money, you might ask? Not because it can’t use its own money but because it doesn’t want to pay the tax required to bring back the money it has built up overseas to use to pay for it.
So while the impasse remains, the cash must stay stranded on a foreign shore (well, a foreign bank account). There’s probably a compromise to be made somewhere but it’s worth pointing out that the last time the US government tried it, with an amnesty on overseas profits in 2004, most of the money brought back went on dividends to shareholders rather than into investment and job creation.
So yes, it’s a bit of a mad situation, but you can hardly blame the government for wanting to have an undertaking that the cash will be put to good use before it lets the companies bring it back. Otherwise, it’s a bit like preparing a massive ticker tape parade for thousands of returning servicemen and servicewomen in New York only to have two or three stragglers turn up. And one of them would probably be Rambo.
This was first published in April 2013