Democrat Obama Proposes 14% Snatch-and-Grab Tax on Overseas Cash Piles
Barack Obama’s proposed budget includes a 14% Snatch-and-Grab tax on corporate overseas cash piles.
So he can blow more money here at home.
CNN Money reported:
A slew of big companies, including Apple, GE and Microsoft, are at risk of being slapped with billions in tax bills if President Obama follows through on his plan to tax their overseas cash piles.
Obama’s 2016 budget outlines plans to raise $238 billion by imposing a one-off, 14% tax on about $2 trillion in earnings that U.S. companies have accumulated in foreign countries.
Many companies that earn money overseas prefer to keep the cash offshore and avoid bringing it back to the U.S. to avoid high American tax rates, which stand at about 35%.
Apple (AAPL, Tech30) is expected to be a key target for the proposed tax, since the company now has $157.8 billion in cash sitting overseas, after reporting the biggest quarterly profit in corporate history this month.
General Electric (GE) also confirmed it has about $110 billion offshore, while Microsoft (MSFT, Tech30) holds about $82.1 billion overseas.
Other companies known to keep money offshore include tech and pharmaceutical giants such as Pfizer (PFE), Merck (MRK), Johnson & Johnson (JNJ), Google (GOOG) and IBM (IBM, Tech30).
But Obama’s one-time tax, and his plan to impose a 19% tax on future overseas earnings, is facing criticism from all sides. First and foremost, experts don’t think they’ll be implemented.