Overseas profits are not really overseas at all

If you read this:

Moody’s Investors Service’s Richard Lane today writes in a note to clients that the “surging” pile of cash of U.S. tech companies that is parked overseas reached $227.5 billion out of a total $457 billion at the end of the March quarter, just counting the holdings of the companies that have $2 billion or more in cash and liquid investments combined.

... you would be very tempted to think that U.S. companies with large overseas cash holdings are depriving the U.S. economy of much needed cash and investable funds. But you would be wrong.

When a U.S. corporation refrains from repatriating profits it has earned overseas, this does not necessary deprive the U.S. economy of those funds. That's because the decision to hold cash in overseas accounts is mainly an accounting and taxation issue, not a decision about where the cash should be invested. A great deal—most likely the vast majority—of the overseas-held profits of U.S. corporations is actually invested in U.S. banks, bonds, and equities. Apple and many other companies have investment shops in Nevada, among other places, where their overseas profits are managed. That cash is held in the name of a foreign company in order to avoid being double-taxed—first at the foreign location, then in the U.S. if the funds are repatriated. It is invested in much the same way that domestically-sourced profits are invested. If there is any "culprit" here it is the U.S. tax code, which insists on the double-taxation of foreign profits. Companies with foreign-sourced profits are quite sensibly trying to avoid that onerous taxation burden by leaving the money in their offshore entities. The only one being "deprived" of these foreign profits is the IRS, not the U.S. economy.