Companies quietly push for tax break on foreign profits in ‘fiscal cliff’ debate
By Jia Lynn Yang and Suzy Khimm, WashPost, Published: November 29 | Updated: Saturday, December 1, 5:32 PM
Amid the tumult over looming tax hikes and spending cuts, a massive change to the corporate tax code is quietly gathering steam.
U.S. multinationals have spent years pushing for a change to the tax code that would eliminate taxes on business profits overseas, just as these firms are banking their futures on growth abroad.
Now, with the debate over the country’s fiscal future in the spotlight, executives, lobbyists and some on Capitol Hill are latching onto the “fiscal cliff” as a potential springboard for their cause.
To the companies, no other tax issue matters more.
They say U.S. multinationals face a disadvantage against overseas competitors because, unlike practices in many other developed countries, the Internal Revenue Service collects taxes on foreign income when it is brought back into the United States. These companies argue that if the tax were eliminated, they would be more likely to bring their overseas earnings back to the United States. It is estimated that U.S. multinationals are holding $1.7 trillion in earnings abroad, largely to avoid being taxed at a 35 percent rate.