WHERE THE MONEY IS & HOW TO GET SOME OF IT

David Cay Johnston has provided great analyses of the American economy and in the process has uncovered many "little know facts." In a recent column, he discussed the amount of cash US companies have been hoarding:

But newly released IRS figures show that in 2009 these companies held $4.8 trillion in liquid assets, which equals $5.1 trillion in today’s dollars, triple the Fed figure. ... The IRS reports the worldwide holdings of U.S. companies, which I think is the more revealing measure.

This isn't because corporations are trying to get through hard times:

Given the enduring hard times, you might think that corporations have used up their cash since 2009. But real pretax corporate profits have soared, from less than $1.5 trillion in 2009 to $1.9 trillion in 2010 and almost $2 trillion in 2011, data from the federal Bureau of Economic Analysis shows.

What to do? The corporations want to be given a HUGE (85%) tax cut on the profits they repatriate, falsely claiming that this will help the economy. Johnston has found another way:

A business holding more cash than its operations reasonably require can be hit with a 15 percent levy under Section 531 of the Internal Revenue Code, on top of the 35 percent corporate income tax. The Tax Court even devised a mechanical test in 1965 for how much is too much.

Historically the IRS has levied only privately owned firms or publicly traded companies with few shareholders. But Internal Revenue Code Section 531 applies to all corporations. President Ronald Reagan signed Section 532 (c), which made that explicit, though with an exception for untaxed offshore profits.

After reviewing decades of literature on these code sections, I cannot fathom any rational basis for giving multinational companies an exception to the cash hoarding rules, which discriminates against purely domestic firms.

Call 1-202-224-3121 and tell your senator or representative you want Section 531 vigorously enforced – now – and the offshore loophole closed immediately.