According to Standard & Poors, total cash and equivalents held by the 500 largest US companies at the end of the first quarter 2011 was $963 billion, up from $837 billion year ago. According to Moody's Investors Service, most of that cash is overseas. Companies don't want to bring it home due to a 35% tax rate and are pushing for a tax holiday like that in 2005, when the rate dropped to 5%. That one-time holiday didn't produce much economic stimulus, so the odds of a tax holiday are limited.
In 2007, about 57% of company cash was overseas. By 2011, it rose to about 70%. By 2013, Moody's predicted, it will increase to 79%. A JP Morgan report in May found that 519 companies held a combined $1.375 trillion abroad.
The good news: the US created the President’s Council on Jobs and Competitiveness to address the issue of jobs and recruited top corporate America executives to fill its 26 seats. The better news: the companies represented on the council reported $197 billion of what are known as 'permanently reinvested earnings' as of 2010, up from $103 billion in 2006. The bad news: multinational companies with current or former chief executive officers on the Council have, over the past four years, almost doubled the cumulative amounts they’ve reinvested overseas, according to data compiled by Bloomberg.
If US companies representing US job growth initiatives do little more than toss a few billion each into the US economy and continue to invest massive amounts in emerging countries, that 9.2% unemployment rate is starting to look optimistic.
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