U.S. businesses have amassed an overseas cash hoard of $2.4 trillion because they aren’t paying their fair share of taxes, according to two think tanks. But that view is at odds with how Republican Presidential nominee Donald Trump and fiscal conservatives see it. They say the U.S. corporate tax rate is too high.
The Economic Policy Institute (EPI) and Americans for Tax Fairness argue that U.S. corporate profits are at record highs while business tax revenue as a share of GDP is at record lows. Businesses can take advantage of loopholes to lower their bills to Uncle Sam, including one that enables them to indefinitely postpone the payment of taxes on profits earned overseas. The think tanks estimate that this strategy costs the U.S. Treasury about $126 billion a year in lost revenue.