CUT TAXES, CREATE JOBS:

Tax cut spurs firms to shift overseas cash home (MARY DALRYMPLE, February 20, 2005, Chicago Sun-Times)

Led by drug makers, American companies have started announcing their plans to use a temporary tax break and shift back to the United States billions of dollars in profits that have been stashed abroad.

An incentive to invest in the U.S. economy -- that's how lawmakers promoted the short-term relief that lets companies avoid as much as 85 percent of the taxes they might otherwise pay on earnings abroad. [...]

The announcements stem from a law passed in October that allows companies, for one year, to pay a reduced 5.25 percent tax on overseas earnings returned to the United States. The profits otherwise face tax rates as high as 35 percent.

Private estimates suggest that companies could bring more than $300 billion in overseas earnings back here. Few companies have said how they will use the money.

Allen Sinai, president and chief economist at Decision Economics, estimated that companies might be on track to announce a combined $100 billion repatriation during the first quarter of the year.

He estimated the influx of cash could generate 400,000 to 600,000 jobs in the next few years and boost economic growth this year.

''We're on the way to quite a bit of money coming back from overseas,'' Sinai said.