CNBC’s own Dennis Kneale wrote a highly thought provoking piece last Friday about John Chambers’ new proposal to slash tax rates on the revenue U.S. corporations earn overseas.
Under the existing code, overseas corporate income is currently taxed at 35%. Because tax is collected only after profits are repatriated to the U.S., those funds often remain parked offshore, outside of the United States. Chambers overseas rate cut proposal would lower that tax rate from 35% to 5% — which has the potential to bring hundreds of billions of dollars back into the U.S. economy.
The numbers involved are impressively large: It is estimated that there are currently $1.2 trillion in funds parked by U.S. companies overseas, and 1 trillion of those dollars are believed to be concentrated among 75 of the largest corporations in America.