This arrangement is good for no one: The companies themselves aren't reinvesting the money in the U.S., where they clearly want to invest it (if they wanted to invest it where it is, they'd have done so by now). Jobs aren't being created as long as the capital isn't flowing here. The government isn't able to do anything with the revenue that isn't being generated. Cook made this point earlier in the interview:
"What I've always felt should happen is that every dollar should be taxed immediately with no deferral. But as a consequence of doing that, you should have free flow of capital. What would happen is if a system like that were put in place, it should have more investment going into the United States. We're the only major country in the world that has a (taxation) system like this. It's not good for the U.S., it's not good for the economy, it's not good for jobs, it's not good for investments."
Cook went on to say that he is "optimistic" about the chances of corporate tax reform next year because "there's wide agreement to that in both parties." But we could have had corporate tax reform by now if that "wide" agreement were enough. President Obama -- who famously once said he'd keep capital gains tax rates high, even if it meant less revenue,
for "purposes of fairness"
lowering the rate. But to only 28 percent, with a one-time tax "break" of 14 percent for previously untaxed foreign earnings. Neither rate is be low enough to induce companies to bring that money back voluntarily. Nor are those rates low enough to justify as "fair" his other proposal to end the deferral of taxes on foreign earnings. There is nothing "fair" -- or smart -- about the U.S. being
one of the few industrialized countries
to tax foreign earnings and maintaining a tax rate that, even at 28 percent (plus state taxes), would be among the world's highest.
Count me as less optimistic than Cook, if Hillary has anything to say about what happens next year.