And that disparity is entirely unjustified, because far more untaxed American profit hides out in the Netherlands than in Bermuda. Since 2005, nearly half a trillion (!) dollars in American profit has been safely stored in the Netherlands by companies such as Nike, General Electric, Heinz, Caterpillar, Time Warner, Foot Locker – the list goes on and on. Half a trillion dollars: it’s an unfathomable amount of money, nearly twice the country’s entire budget.
Psst–and to bring it back home:
If history is any guide, the US government will eventually swing legislation back in your company’s favor.
In 2005, for example, Congress passed a law that allowed American multinationals to bring home their foreign profits at a temporarily low rate of 5.25% – a mere one-sixth of the regular tax rate. Some $362 billion flowed back into the US as a result. A quarter of that – a whopping $90 billion – had been cached in the Netherlands.
The promise was that the law would create American jobs. But it didn’t, revealed an analysis conducted by the nonpartisan Congressional Research Service. Nonetheless, another profit repatriation tax break will probably take effect soon. Trump’s proposed tax plan includes a temporarily reduced rate of 10% on overseas earnings that are returned to American soil.
And so Trump, for all his MAGA rhetoric, reinforces American companies’ biggest lesson: earn your money in other countries and you’ll pay less tax.