An interesting story which originally appeared in Forbes, has revealed that a consortium of companies - Cisco, Oracle, Apple and Pfizer among them - are lobbying the US government for a tax holiday to repatriate as much as $1trillion banked in overseas accounts.
The companies don't want to pay the usual 35% tax on profits generated outside the country, which is why they have so much of it stashed overseas in the first place. Instead, they want to pay a mere 5% in return for investing in research, jobs and domestic spending to boost the economy.
The problem is that US Inc has form in this regard. US companies got an equivalent tax holiday in 2004, but the promised bonanza in investment in the US did not materialise and the cash was used for stock buy-backs and dividends instead.
While this was good for the companies (they dodged their taxes) and their shareholders (they got paid more money), the US didn't really do that well out of the deal. Nowhere near as well as if the government had just told the companies to shut up and pay their taxes. It will be interesting to see whether the government fronts up this time or whether, anxious to grasp any job creating straw, it caves in again.
This was first published in February 2011