04/09/2013 05:10 pm ET Updated Jun 09, 2013

Repatriation of Corporate Cash Abroad

United States global companies have accumulated vast amounts of cash abroad in recent years for various reasons, mainly to do with tax minimization in the U.S. Best estimates place the total at an excess of $1 trillion.

The subject of what to do about that seemingly wasteful situation keeps going around and around. A few years ago there was a brief moratorium which allowed repatriation free of taxes and penalties. Today a lot of companies sit back and wait for a repeat of that opportunity. In the meantime, the money remains pretty much sterilized and does little to benefit either American workers or investors.

At the same time those very large corporations that own those large amounts of foreign cash do not appear to be seriously in need of that money so they do little to try to put it to use. And, when they did get the moratorium, they did little of a constructive nature to utilize the money. Some bought back common shares to buoy the stock prices and shrink outstanding shares; others simply reduced their bank borrowing. Not much was invested in R&D or new plant and equipment etc. Consequently, Congress, economists and other policy makers have not been much interested in finding ways to induce those companies to bring the cash back without tax breaks.

In the meanwhile other industrialized countries have had similar experiences, yet they have managed to induce their companies to largely repatriate those sums by a combination of moratoria and other inducements to make productive investments at home.

A newish idea has begun to circulate and deserves more attention as well study and consideration. It is pretty simple.

In its simplest form the idea says that any company that repatriates the foreign cash and dividends it out to its shareholders within four months would pay no taxes or penalties. The result would be that the states and the federal government would immediately be able to tax those dividends accordingly (thus a nice bump in tax collections, etc.). And the recipients -- the shareholders -- would be flush and buy more things (leading to more jobs to make more things) and/or invest in various things including new businesses and ventures (also leading to more jobs).

That scheme might be refined a bit to allow some retention of the total amount if the uses met certain tests of social utility not just more one time corporate earnings.

The idea could be of some help to our overall fiscal issues as well as stimulate both investment and consumption without requiring any government expenditures.

It would be interesting to see this idea surface more and get a healthy discussion. We rarely see freebies like this which might take the sterile wrap off such a large buried treasure which could help the country.