Issue Position: Act to Welcome Statewide Economic Investment

Issue Position

"Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home.

Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations.

The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles" (Bloomberg, 2015)
As of 2015, it was estimated that American corporations were holding $2.1 trillion dollars in overseas banks. Although much of this income was derived from foreign business, the number one reason was to avoid paying US corporate taxes if the capital was brought back into the US. The taxes are referred to as a repatriation tax and amounts to 35% of the income. Although many in congress recognize the issue, Washington has been slow to find a solution.

But we can offer a partial solution to attract that foreign held capital to Maine. We offer a broad range of incentives to balance or reduce the amount of the repatriation taxes. For instance, Company X brings $10,000,0000 of corporate profits into Maine which previously was held in a foreign bank. The corporation will pay $3.5 Million to the federal government. Maine will offer $2.5 Million in employer tax refunds assuming the jobs created are new jobs.

The State can also offer reduced property taxes for a limited period of time. The time period for both incentives should be limited to the amount of time needed to re-capture the majority of the repatriation tax thereby reducing the effective tax rate from 35% to 10%.

The resulting incentives could create thousands of new high paying jobs without any cost to the state. The net fiscal impact to the state budget would be ZERO.

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