The Trillion-Dollar Homecoming

Giving U.S. companies a tax break on overseas profits won't help the economy

Illustration by Harry Campbell for TIME

Ever hear of a double irish? how about a Dutch Sandwich? These aren't cocktails or bar snacks but rather complex financial strategies used by many American companies to transfer profits they earn abroad to countries with the lowest tax rates. Despite the goofy nicknames, these techniques have a serious purpose: to keep money away from the U.S. whenever possible to avoid paying the higher tax rates in effect at home. Ireland, for instance, taxes corporate earnings at 12.5%, compared with the U.S. rate of 35%.

Big companies like GE and Apple have gotten very good at this game. By some estimates,...

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