The cash is offshore on an accounting ledger but the company's cash is here in America, without cost, if they choose it to be.
It's entirely fictional and provided my brother-in-law an accounting job at Dole. Tuna fishing companies which had actually closed long ago were now shell companies which lent Dole it's own money earned overseas.
The interest they pay themselves is deductible for US taxes, bringing down their effective income tax rate.
But for profit reporting to shareholders all global activities are combined so there's a Dollar of interest income offsetting each Dollar of interest expense.
What Congress needs to do is make this illegal for companies, require consolidation of shell company earnings, like they made it illegal for individuals.
Most of these shell companies would be closed within days.
But Congress members need donations from these companies to feed their election costs, and keeping this potential change in tax law hanging over their heads keeps to donations flowing.
The companies involved see the campaign contributions as merely another small cost in running their shell company scheme.
We've run out of other people's Social Security taxes needed to subsidize our low income tax rates.
