U.S. Firms Keep Billions Overseas

[pinto]

By Jonathan Weisman, Washington Post Staff Writer

With sales up 5 percent last year, Merck & Co. was not satisfied: To hold down costs, the pharmaceutical giant shed 3,200 jobs as 2003 drew to a close, and announced that an additional 1,200 positions would go this year.

But Merck's picture abroad was quite different. It made 1,300 new hires in 2003 outside the United States, on top of the 900 brought on the year before. Company documents indicate that Merck had a cumulative $18 billion in foreign earnings untaxed by the end of last year, $3 billion more than in 2002. And the company said it had no intention of ever paying U.S. taxes on that burgeoning sum.

"Foreign earnings of $18.0 billion . . . have been retained indefinitely by subsidiary companies for reinvestment," Merck's annual filing with the Securities and Exchange Commission (news - web sites) said. "No provision is made for income taxes that would be payable upon distribution of such earning."

Last week, Sen. John F. Kerry (Mass.), the likely Democratic nominee for president, made such lucrative income-tax deferrals a focal point of his campaign, asserting that they are driving companies to expand abroad. Merck's numbers appear to back that up, and so do those of several other big U.S. companies.

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[libbygurl]

1. There was a piece on this several months ago...

...on Bill Moyers' NOW program on PBS. Many major household names are among the notorious offshore companies, and I think the number was something like

$40 BILLION in unpaid taxes

owed by these companies if they were HQ'ed in the US. Wondering if anything will be done about this by anyone.