Editor: Paul L. CaronPepperdine University School of Law
Thursday, May 2, 2013
By Paul Caron
(Hat Tip: Ann Murphy.)
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Its a common misunderstanding to think that the cash that US multinationals such as Apple is "offshore". The cash is offshore in the sense that it is owned by Apple in the name of a foreign subsidiary of Apple. However, most of that cash is on deposit with a US banking institution. That US banking institution uses that cash to fund small business loans, car loans, mortgages and other lending here in the US. The idea that if you repeated the repatriation provision enacted in 2005 (section 965 of the American Jobs Creation Act of 2004) that hundreds of billions of dollars would flood into the United States to fund job creation and the like is misguided. That cash is already here and at work. The reason companies like GE et al push for such a provision is so that they can get that cash back to the US to return to shareholders more often than not.
Posted by: Septhaka | May 3, 2013 4:45:43 AM
Is more cash in the hands of their shareholders, most of whom are American or American institutions, more or less money in the U.S.?
Posted by: the real anon | May 6, 2013 5:58:14 AM
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