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Non-Tech : Kirk's Market Thoughts
COHR 198.51+0.4%Dec 11 3:59 PM EST
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To: Jerome who wrote (1286)5/20/2014 7:59:15 AM
From: Jerome  Read Replies (1) of 26763
 
Kirk,....here is one big reason that companies park cash overseas.

Consider that a company has a tax liability of a billion dollars if all their cash stayed in the US. And their taxes would be decreased by a billion dollars if they moved as much cash as possible overseas.

Now if the cash were kept in the US it would generate income (fron interest) and that would also be taxable.

So instead they move lots cash offshore the result being that no taxes are due.

And the corporate balance sheet looks healthier. (because there is an extra billion dollars on the balance sheet).

This is an accounting gimick, the CEO's like because it makes them look better.

This is not a whole lot different than individuals try to hide cash from the IRS in foreign tax havens to avoid taxes.
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