Should the US government give a repatriation tax break?

As part of their aptly named series Nobody Pays That, the New York Times has a piece on how US companies are pushing for a tax break to repatriate profits to the US (see the article here). According to the piece

Apple has $12 billion waiting offshore, Google has $17 billion and Microsoft, $29 billion.

If a one off tax break were given, taking the effective tax rate on such repatriation from 35% to just over 5%, the US government would hope to see a large pay day. However the NBER studied the last time such a break happened and companies used the repatriated profits to pay dividends and used other routes greatly reducing the return to the government.

As part of the piece there is a great video entitled Inside the Accountant's Playbook which gives a quick overview on how global companies can greatly reduce their tax liability in the US. All legal just for some very frustrating.

It's unclear whether a small return to the public purse and the hope of investment in R&D and jobs is enough to tilt the argument towards giving the tax break. However, given the state of public finances something may be better than nothing.

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