The annual report from Audit Analytics shows that US corporations are continuing to amass large sums which they are unwilling to import to the US for tax reasons.
This gives them a war-chest with which to buy European businesses. The total sum for the largest 1,000 companies of all types is over $2 trillion. In its top ten with earnings held overseas IT figures strongly, with IBM, Cisco, Microsoft and Apple all included. The total is up by 12%.
Although the firms, especially Cisco, have lobbied the US government about this money, which they would prefer to use for US investment and dividends, there appears to be no movement.
Over the last few years these foreign earnings of companies, especially those retained overseas as indefinitely reinvested earnings (IRE), have been increasingly in the news.
Last year Apple caused a stir by choosing to raise $17bn through a sale of bonds instead of repatriating earnings held offshore, which had the US Congress asking questions. Before that, decisions by Microsoft and Hewlett-Packard were scrutinised for similar reasons.
Many companies will soon have most of their assets held outside the US, at this rate of growth. Microsoft is already there, with some 53% held in this IRE. Cisco is just under at 47%, IBM has 41%.