“Republican tax negotiators, aiming to finalize their nearly $1.5 trillion in tax cuts on Friday, are planning another raid on the overseas piggy banks of Apple, Microsoft and Google-parent Alphabet,” Jed Graham reports for Investor’s Business Daily. “Already, the Senate version of the bill would impose a 14.5% tax on cash held overseas by those tech titans and other companies to avoid being taxed at the current 35% corporate rate, along with a 7.5% tax on illiquid assets such as real estate, raising $298 billion.”

“Now there’s talk of bumping up those rates to 15% on cash and 8% on illiquid assets, up from the 10% and 5% tax rates initially targeted, and there’s a chance it could go higher still,” Graham reports. “Apple has $252 billion parked overseas, while Microsoft holds $128 billion and Alphabet $52 billion.”

“No major hurdles appear to stand in the way of passage, but Republicans need to free up extra cash after changes that have made the bill more expensive than the Senate version, on which the final bill is largely based. The changes include a 21% corporate tax rate, instead of 20%, but a start date of 2018, not 2019. The GOP deal also allows individuals to deduct $10,000 in state and local taxes of any kind, not just property taxes, as in the original version, to mollify California Republicans.,” Graham reports. “In addition to the corporate tax cut, the vast majority of businesses whose profits are taxed via individual tax returns also get tax cuts.”

Read more in the full article here.

MacDailyNews Take: It’ll be interesting to see how the final bill shakes out, but we’d bet large multinationals would take a bit of a hit on repatriation in exchange for finally moving to a territorial system.

As we’ve been saying for many years now, the U.S. corporate tax rate is obviously way too high and exceedingly anachronistic.

Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth.Apple CEO Tim Cook, May 21, 2013

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