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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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