American companies continue increasing their offshore holdings despite mounting public disapproval. According to an analysis by Bloomberg News, American companies now hold $2.10 trillion in profits overseas, avoiding US taxes.
Technology companies, which enjoy a wide discretion in where they declare profits, mark the largest portion of overseas holdings. Making up more than a fifth, technology companies – including Microsoft, Apple, and Google – have continued to grow their offshore holdings. According to Bloomberg, these companies increased their holdings by more than 20 percent over last year and, along with others in the technology industry, accounted for 45 percent of the net growth in overseas funds.
Other notable companies increasing their offshore holdings are Duke Energy Corp. and Stryker Corp..
Duke Energy became the focus of national scrutiny after its plant on the Dan River in North Carolina spilled between 50,000 and 82,000 tons of coal ash into the river. Stryker Corp. has been under scrutiny for its involvement in a number of lawsuits for defective medical devices.
Companies holding money offshore maintain that American tax law provides a disincentive to repatriate offshore holdings or to reinvest the funds. Technology and pharmaceutical companies derive a majority of their profits from intellectual property than can be exchanged between nations with comparative ease.
President Obama has eyed the offshore funds for special taxing and hopes to use the projected $268 billion generated over six years for infrastructure projects. Unfortunately, Republican opposition has kept plans from taxing the ever-increasing offshore tax havens on hold.