Jul 21, 2017 07:59 AM EDT
The top three tech giants Apple, Google, and Microsoft are among the leaders in cash hoarding in order to avoid corporate taxation from the government. These conglomerates contribute their combined stashed money to a total of $464 billion in non-financial entity category.
Total Hoarded Cash Away From Tax Collectors: $1.84 trillion at the end of 2016
Cisco and Oracle follow Apple, Google, and Microsoft in that order. These top five non-financial entities lead the hoarders of cash. The total money idly kept by these companies sum up to $594 billion far from the taxmen. Apple alone has $246 billion (13.2 percent from the total cash pile) up by 12.8 percent from $216 billion last 2015.
Cash stashed overseas reaches up to $1.3 trillion, that is 70 percent of the total hoard. Business sectors with the richest cash pile are Tech, Health care, consumer products, and energy. The tech sector has a total of $871 billion kept away from government taxation. According to Moody's report, the figures will continuously grow without tax reform, reports Market Watch.
President Donald Trump encourages businesses to bring the money home
The Trump Administration wants the cash pile to come home so it can circulate in America's economy. The government proposes a one-time tax holiday to encourage business to invest their hoarded cash. Secretary of the Treasury Steven Mnuchin said that the fact that Apple has all this cash stashed away in a foreign bank is an indication of a high corporate tax scheme compared to foreign taxation. There would be no reason to bring back the money only to pay excessive amounts for it, he adds.
Apple, Google, Microsoft, Cisco, Oracle, and the rest of the hoard grew richer since the recession period with the money piled elsewhere. The hold-on situation hinders the longed for economic recovery as corporations are waiting for the right timing for their investments. With the investments put on hold, job creation is delayed and factories that should have been erected with the wad of cash in circulation, reports CNN Money.
Wall Street hopes that Congress will support the Trump Administration for a tax break so the money can flow back to the States for a better economy. A long struggle for tax reform is due and without Congress' support, cash hoarding will continue to pile up.
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