Saturday, May 21, 2016

One-third of all cash holdings in the United States belong to just five companies

Just a handful of US companies hold a majority of the cash in the United States by a large margin. According to USA Today, five US companies, Apple, Alphabet (Google holding company), Cisco, Microsoft, and Oracle made up 504 billion of the total 1.7 trillion dollars in cash and cash equivalents in 2015. This is about 30 percent of the US's total cash and cash holdings. This is an increase in comparison to 2014 (27%), and 2012 (25%). Additionally, the use of offshore accounts to avoid US taxes is increasing as well. USA Today states, "unfortunately for U.S. investors, 72% of total cash held by all non-financial U.S. companies is stockpiled outside the U.S., up from 64% in 2014 and 58% in 2013."
Questions:
- How do you think that the holding of so much wealth by so few corporations affects the economy, as the majority is held offshore?
- Does this much cash ought to be taxed more heavily than now, in the case of it being brought back to the United States?
- Should there be more regulation of industries in this sector as we see the increase in wealth and increasing disparity of wealth in the US? Sources:
USA Today
Win Beta
International Business Times

2 comments:

Jong Lim said...

I think the offshoring of this amount of money by a tiny few of companies is exactly the same as it is just now. However, if the money was injected back into the economy, I would definitely see a positive increase in the economy. Taxes or using wealth, both of them are ways for the money to circulate. Essentially offshore money is dead money, as it isn't being used to stimulate the economy. As offshoring is perfectly legal, I doubt any regulation would come out, since offshore accounts has been known for a while, it is primarily brought up a lot more than it used to due to the Panama Papers.

Christopher Duan said...

Thanks Jason for your comment. I didn't quite understand what you meant by "I think the offshoring of this amount of money by a tiny few of companies is exactly the same as it is just now.", however your point that offshore money being dead money sems a bit contradictory, since the holders of that wealth will have to bring the money back to the US sometime, somehow. The only problem is HOW. In response to your comment that "(you) doubt any regulation would come out, since offshore accounts has been known for a while", I think that the increased awareness of these problems will lead to more regulation. What do you think? I find it hard to imagine further inaction as attention to this increases.