New Estimate of Stranded Earnings Demonstrates Need for Tax ReformSeptember 30, 2016
WASHINGTON, DC – Newly released numbers from the Joint Committee on Taxation estimate that as much as $2.6 trillion in earnings of American companies are currently being held offshore. This is up from $2.3 trillion in 2012. This ever-growing amount of earnings is being stranded overseas because of the United States’ outdated approach to corporate taxation.
“The combination of America’s burdensome and outdated tax code coupled with pressures from foreign governments is leaving trillions of dollars overseas that could be invested into American jobs. To protect American jobs, investments, and R&D, the United States must enact tax reform that includes an IP Box policy,” said Jim Morrell, spokesman for American Innovation Matters.
An IP Box provides a lower rate of taxation, typically between 5 to 15 percent, on income derived from a company’s intellectual property. IP Boxes are becoming increasingly popular overseas with fifteen countries, mostly in the European Union, having adopted them. An IP Box is a response to the fact that intellectual property and the income it generates are highly mobile. Other countries are using IP Boxes to capture these valuable commodities, and attract valuable R&D, jobs and earnings that are often stunted by traditionally higher corporate rates.
More information about the IP Box can be found at www.ipbox4jobs.com.
AIM’s membership includes Cisco, Boeing, S&P Global, Biogen, Apple, Intel, Adobe, Oracle, Facebook and other companies whose strong investments in R&D and innovation help create new jobs and spur economic growth.