Nomenclature Matters

What you call it can determine how it is regulated. Businesses are lobbying hard to be allowed to repatriate “$2 trillion in untaxed profits outside the United States”. Seems to me they practically have won the war by labeling this money “stranded cash” when in fact it should be called “sheltered cash”.

Thus we get stuff like this:

But this much is clear: There is a growing political consensus that the time has come for change in the tax rules to encourage repatriation of the vast troves of corporate earnings held outside the country. Companies, ordinary American taxpayers and thousands of investors have substantial and sometimes conflicting stakes in the outcome.

“Everyone agrees that something is going to be done about this,” said Edward D. Kleinbard, the former chief of staff of the congressional Joint Committee on Taxation, and now a law professor at the University of Southern California. “The question, of course, is exactly what.”

Well, I don’t agree. Let’s just close the loophole going forward as a first step, so as not to make foreign investment more profitable than domestic. Then maybe we can talk about wealth taxes?

Meanwhile, please can we call this $2 trillion what it is: tax-sheltered cash stored in offshore bank accounts.

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