Break on Foreign-Profit Tax Means Billions to U.S. Firms

By Jonathan Weisman, Washington Post

Prompted by a one-time tax holiday on profits earned abroad, pharmaceutical giant Eli Lilly and Co. announced early this year that it would bring home $8 billion to boost research and development spending, capital investments and other job-creating ventures.


Six months into the year, Lilly’s R&D spending had increased by 10 percent. But that $134 million is only a small fraction of the $8 billion that is boosting the company’s coffers.

For proponents of the tax holiday, including the corporations that lobbied for it, Lilly proves that the tax provision is working. For skeptics, it means the opposite: A measure designed to create jobs is instead rewarding the companies that are most adept at stashing overseas profits in tax havens, allowing them to bring money home at a severely discounted tax rate. Once here, that money is simply freeing up domestic profits that would have been spent on job creation and investment anyway.

For this complete story, please visit Break on Foreign-Profit Tax Means Billions to U.S. Firms.