, Columnist
Why Don't Multinationals Bring More Profits Home?
Why don't U.S. companies bring more overseas profits home? Accounting rules are partly to blame.
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The big surprise from eBay Inc. this week is that it's taking a $3 billion charge to earnings after deciding that it might repatriate $9 billion in profits held by foreign subsidiaries. So why don't more U.S. companies bring home more of their profits?
The usual reasons cited are that U.S. tax laws are too convoluted and the 35 percent marginal corporate tax rate is too high. And that may be true. Yet there's another big disincentive that usually doesn't get much attention: U.S. accounting rules.