10 Companies That Might Happily Pay Billions in New Taxes

Lots of companies haven't brought their overseas profits back to the U.S., but there's a chance they will soon!

Jun 28, 2014 at 1:14PM

It is no secret that many companies keep profits stashed overseas in order to avoid or delay paying taxes to bring the money home to the U.S.

Apple (NASDAQ:AAPL) is perhaps the most famous example, with more than $50 billion of accumulated profits held outside of the U.S. according to data from Bloomberg. However, you may be surprised to learn that Apple's stockpile of cash isn't the largest held outside of the U.S. In fact, General Electric (NYSE:GE) has more than double Apple's amount with $110 billion in foreign countries.

In fact, there are four other companies with more assets stashed overseas. In all, the S&P 500 companies combine for nearly $2 trillion stashed outside of the U.S.

Will the money ever come home?
So, when might the U.S. see some of this money come back ashore? Perhaps soon, if certain U.S. Senators get their way.

There is talk of a "repatriation tax holiday" for corporate profits, which would give these companies a one-time opportunity to bring their profits to the U.S. for a greatly reduced tax rate. Most overseas profits are taxed at 35%, and while there is no definite number for a "holiday" yet, last time a similar offer was expended to corporations, they were allowed to bring cash in by paying just a 5.25% tax rate.

This has the double benefit of saving these corporations (and their shareholders) billions of dollars, and could also provide a nice windfall to the U.S. government. Even if half of the cash overseas was to be repatriated at a low rate, it could still mean more than $50 billion in additional tax revenue for the U.S. The whole amount coming back home would mean more than $100 billion, and this only includes cash held by the S&P 500 companies.

Here are the ten companies holding the most cash overseas, and who stand to benefit the most from a repatriation tax holiday.

Are these cash-hoarders the best stocks for income?
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Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends Apple, Cisco Systems, and Johnson & Johnson. The Motley Fool owns shares of Apple, Citigroup, General Electric Company, International Business Machines, Johnson & Johnson, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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